by David Zenian
SHARJAH, United Arab Emirates — The airports at Sharjah and neighboring Dubai and Ras el Khaymah at times look more like Moscow’s Sheremetyevo than the desert airfields of the oil rich United Arab Emirates. And if traffic to and from the republics of the former Soviet Union is on the increase, Yerevan flights proportionately have the lion’s share both in frequency and the dollar value of goods they carry.
One such flight last December brought in a group of Armenian factory managers and representatives to a trade fair in the Emirate of Sharjah seeking markets for a variety of products ranging from heavy drilling equipment, water pumps, space heaters, electrical wiring, aluminum foil, tires, forklifts, to neon lights and digital clocks.
Thanks to the tireless efforts of area Armenians like bank manager Varoujan Narguizian, the group was given the best location on the fair grounds to exhibit their products and the Armenian tricolor was hoisted prominently next to the flags of the United States and Great Britain.
For three days, the Armenian exhibitors answered questions from not only the curious public, but also “serious” executives from a number of international electronics companies, including a purchasing manager from a Canadian firm who had a special interest in several high-tech products made in Armenia. While no sale orders were taken, the exhibit gave Armenia a chance to reach out to potential markets outside the former Soviet Union. It also provided the participants with valuable practical experience in the mechanics and art of international trade. “We have learned a lot from this experience. We will plan things better next time,” a participant said.
First, the plane carrying the exhibits and the Armenian team was delayed by more than 24 hours. This meant the Armenian pavilion was not ready for the opening ceremony. Then, there were not enough English speakers in the group to handle all the questions from the visiting public or English-language brochures to promote the exhibited goods.
Few, if any, of the Armenian factory representatives were salesmen. Others had problems answering questions regarding ways of getting the Armenian products to the potential customers in the United Arab Emirates. “We must admit that we could have been better prepared for this, but then again, we lack the experience of doing business outside the former Soviet Union,” an Armenian factory “executive” said. “We are good at barter trade, but we are a long way from learning the tools of real business.”
While officialdom tackles the mechanics of how to open a letter of credit or fill out major orders from foreign merchants, individual Armenians are already busy trading in less complicated ways. At least five flights from Yerevan land in Dubai and Sharjah every week. The planes come in empty except for the dozen or so “businessmen” passengers, but fly back full of goods for sale in Armenia and elsewhere.
“Armenian entrepreneurs were the first to discover the practical value of trade with the United Arab Emirates. I am not considered a frequent traveler, and I make at least four or five trips to Dubai every year. Others are here at least once a month,” Yerevan resident and tour organizer Arthur Minassian said during one of his recent trips. “Dubai and Sharjah are very important windows of opportunity for Armenia. It ‘s less than a three-hour flight from Yerevan. Business is lucrative, and hundreds of people are making an honest living from trade.”
Dubai and Sharjah are especially useful because of their proximity to Yerevan, their near tax free status and the support visiting Yerevan businessmen get from the local Armenian community.
But how does all this work? Is it legal? What kind of people are involved? and what do they trade in? Minassian, for example, sells “not so valuable Armenian art work” in the United Arab Emirates and uses the generated cash to purchase goods from the local market for sale in Yerevan. Others, often called “suitcase merchants,” come in with dollars to purchase goods to take back not only to Armenia but also to other former Soviet Republics and Communist states of Eastern Europe.
Last December, Minassian accompanied a group of budding Armenian painters to Dubai for an art show supported by some members of the local Armenian community. Hundreds of oil paintings and watercolors were exhibited during an Armenian picnic with scores sold for prices ranging from fifty to a few hundred dollars.
“Everyone was happy,” Minassian said. “We are not selling works of art by giants like Martiros Saryan but rather new artists who need the money not only to keep painting, but also to feed their families this winter. The artists made some money, the local community had the moral satisfaction of helping the artists and the joy of owning a piece of authentic Armenian art, and yes, all this was good business for me too,” Minassian said.
But if Minassian and a handful of artists are making a few hundred dollars selling oil and water colors, thousands of dollars are changing hands in the busy Souks of the United Arab Emirates.
“Goods are very cheap here because there are practically no taxes on imports and exports. The right commodities are very profitable, especially if sold in the Baltic States or even Poland. If I make money, I spend it in Armenia and that creates movement of cash which is a healthy development,” one young Armenian entrepreneur said. “Look at Armenians around the world, they are all good businessmen. They all have started with little and climbed to the top.” Like others in his group “shopping” in Dubai, he too declined to be identified. “There is a mistaken perception in Armenia about us. There is nothing wrong or illegal about doing this kind of business,” he said.
In the lobby of downtown Dubai’s Al Diwan Hotel, better known by Armenians as the Dvin after a hotel by that name in Yerevan, “businessmen” are busy sorting and packing merchandise for the next flight out to Armenia. “We handle 10 to 20 tons of goods every week,” said Anahid, the representative of Jasmin-Globe Trotters, one of several shipping and travel agencies jointly owned and operated by Armenian entrepreneurs in Armenia and the United Arab Emirates.
“What we do is not only legal both in Armenia and the United Arab Emirates, but also very simple,” Anahid explains. “We organize one-week trips for Armenians on charter planes from Yerevan which carry a dozen or so passengers and a lot of cargo room. The cost is 520 dollars which covers air fare, the cost of the hotel room, breakfast and one other meal a day, plus 50 kilograms of free cargo for each passenger on the return flight to Yerevan from Dubai or Sharjah. Extra cargo, which all passengers have a lot of, costs one dollar per kilo,” she said.
One such load being packed for a recent flight to Yerevan included dozens of kerosene space heaters, canned meat, computer parts, VCRs, a couple of refrigerators and other kitchen appliances. “The electrical appliances are normally sold to the growing foreign community in Yerevan who have both the money and the electricity,” Anahid added.
And what is the volume of trade between the United Arab Emirates and Armenia? “A lot,” says Anahid. “At least fifty to sixty Armenian businessmen come here every week and each of them buys not less than 5,000 dollars worth of various goods ... that’s 300,000 dollars per week or more than 15 million dollars a year. Business creates a ripple effect. Every one from the charter organizers to the kiosk owners on the streets of Yerevan make a few dollars. No one is going to get rich, but a little business is better than no business at all,” she said with a shrug.
So the flights from Yerevan keep coming to the United Arab Emirates.
