By Atom Markarian
The total amount of foreign direct investments in the Armenian economy shrunk by almost half last year to just under $100 million, figures from the ministry of trade and industry show.
The foreign investments stood at $190 million in 2000, according to official data.
But ministry officials 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. Their Armenian subsidiaries did not need substantial capital investments in 2001 and officials argued that the fall in foreign investments is not significant if one excludes OTE and Gazprom from the overall statistics.
The deputy minister of trade and industry, Tigran Davtian, said that last year’s modest figures also stemmed from the global economic impact of the September 11 terrorist attacks in the United States. He said that was a key reason why the government did not secure any multimillion-dollar privatization deals with foreign investors.
In October, the Swiss company Holcim, one of the world’s largest cement producers, blamed the bleak economic outlook for its unexpected decision not to go ahead with a $30 million of a cement factory in southern Armenia. Analysts believe that the worldwide economic downturn also played a role in the government’s failure to attract any bids for Armenia’s power distribution companies.
Despite the drop in foreign investment the Armenian economy grew at a record-high rate of nine percent last year. Davtian attributed that to a substantial increase in domestic investments.