Foreign investments drastically fell

Yesterday the National Statistics Service released macroeconomic data, which speak of the pathetic plight of the Armenian economy

First, in the second quarter the economy of the country had almost had a 0% growth – only 0,6%. But there is another index, which is even not close to zero. There is only a slump, which is measured not by percentage but by times. We are talking about foreign investments. In the first quarter of this year the foreign investments in Armenia reduced by 34,7% and the direct foreign investments fell by 64,2% – about 3 times. According to the data of the NSS in January-June of the current year the foreign investment in Armenia amounted to 293 million USD compared to the same period of the previous year – 449 million USD. And the foreign direct investments fell from 330,5 million to 118,1 million USD. It is hard to give a more negative assessment to the efforts of our government to boost business in Armenia. Indeed, some of RPA officials might claim that business investments plummet worldwide.

But we have mentioned that in the past in many countries, including Russia, foreign investments rose. The picture of investments per country is also very interesting to review. Foreign direct investments only grew in the United Kingdom and Argentina. For example, if last year the UK invested only 5 thousand USD in Armenia then this year index grew 100 times reaching 5 million USD. They have invested in mining. As of the Argentinean direct investments then those rose by 67,2%. During the first quarter of this year the Argentinean capital made a 8,2 million USD investment in Armenia by Eduardo Ernekyan. The direct investments in airline development was increased by Ernekyan by 1 million USD – reaching it 4,3%. But the Argentinean-Armenian philanthropist didn’t suffice with just one sector. His Tierras de Armenia company made 3,3 million USD direct investment by doubling the last year’s index. Besides these two countries no other direct investment was recorded.

The investments coming from offshore zones are also noteworthy. This year the record belongs to Virgin Islands. In the first quarter of the current year the companies registered in Armenia made 9,4 million USD investment in Armenia. Last year the volume of investments from Virgin Islands was only 38,4 thousand. It means the index grew 245,3 times.

Let’s mention that most of the investment from these islands was focused on real estate and construction. 8,7 out of 9,2 million was invested in construction. The investments from Seychelles Islands reduced 5 times by reaching 643 thousand USD from 3 million. Instead, the investments from Cyprus rose 14 times. In the first quarter of this year Cyprus invested 35,7 million USD compared to the same period of the previous year – 2,5 million USD.

Let’s mention that the majority amount, 33 million USD, was invested in mining. In general, foreign companies invested approximately 80 million USD in mining. Most of it was invested by Cyprus and the second place goes to Canada. In terms of direct investments communications sector enjoys the majority of investments. In the first quarter of 2013, 40 million USD was invested here. 21 million was invested by France, 16 by Russia, 2 to Lebanon. In the sector of real estate direct investments amounted to 19,6 million.

The statistics doesn’t specify the countries that invested in this sector. Investment in beverage production also enjoys drastic investment records. In the first quarter 8,6 million was invested here – 7,5 million by France. We may assume that this was done through the Brandy Factory of Yerevan. In the end, let us mention that during the period of 1988-2013 Russia’s investment tops the list of countries. The amount of investment from companies of Russia counts 2 billion 355 million USD. France occupies the second place – 290,6 million USD. The latter is followed by Argentina (250 million USD), USD (172,4 million USD) and Germany (165,5 million USD).

By Babken Tunyan