The TRIPP initiative has two main components of economic impact — direct and indirect — both of which can significantly influence Armenia’s economy as well as the development of the wider region. At this stage, Armenia places greater emphasis on indirect benefits. This assessment is offered by economist, analyst, and head of the Center for Socio-Economic Development, Gagik Makaryan.
Direct and indirect economic impacts
According to Makaryan, direct economic impact relates to the duties and taxes generated through the transportation of goods via railway and road networks. Indirect impact is broader in scope and is linked to the strengthening of US influence in the region following the unblocking of communications, the formation of certain security guarantees, and the resulting improvement of the investment climate.
“Under such conditions, both domestic and foreign investments may emerge, along with new businesses and projects directly related to servicing the TRIPP route, developing infrastructure along the corridor, and related economic activity,” he notes.
Makaryan emphasizes that Armenia currently prioritizes indirect benefits. This is reflected in the distribution model fixed in the document, under which Armenia holds a 26 percent share, while the United States holds 74 percent.
“I believe the Armenian side has calculated that strong US interest and influence could, in the long run, bring larger and more manageable benefits to Armenia,” Makaryan says.
Framework agreement and legal structure
Makaryan also stresses that the signed document is a framework agreement. It defines the model, mechanisms for primary and secondary checks, “front-desk” and “back-desk” formats, and serves as the basis for establishing a legally registered company.
Although the document does not explicitly specify the place of registration, Makaryan believes its logic implies that the company should be registered in Armenia and operate as an Armenian resident entity listed in the state registry.
He places particular importance on drafting the future company’s charter. According to him, the charter must address the concerns and criticism voiced in the expert community and provide maximum protection for Armenia’s interests.
“The charter must clearly define which issues are considered ‘key matters’ requiring Armenia’s mandatory participation and decisive vote. If these issues are not clearly outlined, future disputes and ambiguous interpretations are inevitable,” Makaryan warns.
He also stresses that TRIPP should not become the sole focus of attention. The charter should include objectives related to Armenia’s comprehensive unblocking — the development of roads, railways, and other infrastructure across different regions of the country.
“One must avoid the risk of concentrating all economic and political attention exclusively on TRIPP, while neglecting Armenia’s participation in other international transport and trade routes,” the economist notes.
Potential trade volumes
Makaryan also presents his empirical estimates. According to his calculations, the combined foreign trade volume of the five Central Asian countries amounts to roughly 350 billion dollars. Taking into account the trade of Turkey and Azerbaijan, as well as Azerbaijan’s trade relations with the EU, at least 5 percent of these flows could potentially pass through the TRIPP route.
“Preliminary estimates suggest that even without China’s participation, trade via TRIPP could reach around 7 billion dollars, which is a solid starting figure,” Makaryan says.
With China’s involvement, the picture could change dramatically. He notes that China’s foreign trade volume is approaching 11 trillion dollars, and even 5 percent of the non-energy segment could amount to approximately 250 billion dollars.
In addition, the EU’s external trade volume stands at around 7 trillion euros. The quality of the route, level of service, and security standards could encourage European countries to use TRIPP either instead of, or alongside, traditional routes.
Makaryan believes that the security component of TRIPP could be significantly strengthened through the involvement of Central Asian countries. Active US engagement with these states, he notes, suggests that they may be incorporated into the project.
“Large trade volumes from Central Asia could serve as a counterbalance to the Azerbaijan–Nakhichevan–Turkey trade corridor, whose volumes are relatively modest,” the economist concludes, emphasizing that Armenian authorities must work consistently toward building these relationships.