The Problems of Landlocked Countries' International Competitiveness (The Armenian case)
The development of the national economy is greatly conditioned by the globalization of the present day world economy. Consequently, the country’s equitable and harmonious integration into the global economy is only possible when there is equivalent competitiveness. Strengthening of the economic relations between countries, openness of the national economies, and their complementing and integration influence Armenia’s strategic orientation to access the global economy, not as a raw materials “attachment”, but as a country with a high level of technological development, strong financial institutions, and advanced infrastructure and information base. Based on the research results, a manifestation of extremely important process features has been specified, such as the high level of the transportation costs for landlocked countries, and the resulting weakening of international competitiveness positions. In this context, our research addresses the problems of increasing our country’s competitiveness and presenting the most practical approaches to solve those problems.
Landlocked countries are characterized by the following main problems: isolation from the main markets, dependence on transit through neighboring countries, political conflicts with the coastal country adjacent to the landlocked country, transit country’s administrative restrictions, the complexity of customs procedures, and underdevelopment of the internal transport systems.
This research aims to elaborate integrated approaches and proposals by revealing the internal and external challenges of competitiveness, analyzing the competitive advantages, and identifying which practical implementation will contribute to the potential realization of Armenia’s competitiveness in the region.
For realization of these objectives, the solutions for the following problems are to be highlighted:
• list and analyze the methodological approaches of the country's competitiveness assessment in the global economy.
• research and evaluate the most significant factors affecting the competitiveness of the country and identify the role of these factors to increase Armenia’s international competitiveness.
• Reveal the specific problems of landlocked countries, and in that context the main priorities of Armenia’s export promotion.
• Substantiate the main approaches to increase Armenia’s domestic and regional competitiveness.
To accomplish the objectives and tasks proposed in the scope of the research, our group studied the methodological foundations of international competitiveness calculation and evaluation based on which, the internal and external challenges of landlocked countries, and especially Armenia’s were revealed. During the research the negative impact of landlockness on Armenia’s, as well as other countries, economic growth, socio-economic development, export earnings, private capital inflows, and the concentration of domestic resources, has been substantiated.
The main feature of those identified issues is that even after successful reforms directed to general improvement of business climate, the considered countries can’t independently overcome the current challenges. Therefore, in this context the international conventions aimed at protecting the country’s rights, which in practice are still rarely used, were also studied. Armenia should take active steps to employ the conventions, which are aimed to solve the problems of intercontinental countries, for its economic development.