By Atom Markarian
President Robert Kocharian said on Wednesday that this year will see a sizable increase in foreign investments in the Armenian economy.
He said the government’s stated efforts to improve the business environment will soon bear fruit by making the country more attractive to foreign companies.
The total amount foreign direct investments (FDI) slumped to just under $100 million last year, down from the $190 million level registered in 2000. Government officials have played down the drop, saying that two foreign companies, the Hellenic Telecommunications Organization (OTE) and Russia’s Gazprom gas monopoly, accounted for a large share of the 2000 figure.
Kocharian would not predict what the FDI figures for this year is likely to be, saying only that the authorities are committed to fighting corruption and improving the regulatory framework for businesses. “We will have a quite serious economic growth in 2002. All forecasts show that Armenia has potential for that,” he said.
Armenia’s Gross Domestic Product grew at a record-high rate of 9.6 percent in 2001. But Western donors say the growth could have been even faster if the authorities had taken real steps to improve the investment climate which still leaves to be much desired.
Kocharian was speaking to reporters after meeting senior officials from the Armenian Development Agency (ADA). The agency was set up in 1998 with the aim of promoting foreign investment and helping domestic manufacturers find export markets. Its director, Vahagn Movsisian, told the president that the ADA’s activities last year were a success despite the sharp fall in FDI. He offered a bright FDI outlook for this year, saying the agency has dealt with more than 300 foreign firms interested in doing business in Armenia.
However, the business community seems less enthusiastic about the ADA’s peformance. One Yerevan-based Western businessman told RFE/RL that with an annual budget of just $100,000 the ADA faces a “mission impossible” in its drive to attract substantial foreign capital.
The World Bank has recently approved a $1.3 million loan designed to bolster its operations.