Foreign investments in the Armenian economy have decreased further this year after a sharp drop registered during last year’s global recession, according to official statistics.
The latest data from the National Statistical Service (NSS) shows that Armenia attracted almost $349 million in foreign direct investments (FDI) in the first nine months of 2010, down by 9.5 percent year on year.
Full-year FDI inflows into the country tumbled by 33.5 percent to $732 million in 2009, reflecting adverse economic conditions around the world.
The Armenian telecommunications sector dominated by foreign investors accounted for most of the continued fall. Even so, it remained the single largest beneficiary of foreign investment, generating 42 percent of the FDI total in January-September 2010.
According to the NSS, the French telecom giant Orange, which launched Armenia’s third mobile phone network in late 2008, invested almost $102 million in the nine-month period. Another $39 million was invested by its Russian competitors owning the two other Armenian wireless networks.
With a net FDI contribution of $148 million registered in January-September, Russia remains Armenia’s leading foreign investor. Most of this sum was channeled into the local energy sector dominated by the Russian energy conglomerates Gazprom and RAO Unified Energy Systems.
These figures were discussed on Tuesday at a conference in Yerevan attended by senior government officials and businesspeople. Economy Minister Nerses Yeritsian told participants that boosting the volume of foreign investments is a key economic priority of the Armenian government. He said the government’s FDI strategy puts the emphasis on improving the country’s business environment criticized by local and foreign entrepreneurs.
Yeritsian acknowledged that the government has still a long way to go in completing relevant “structural reforms.” “If we compare the process to a marathon track stretching for several miles, I would say that we have crossed only the first mile,” he said.
Ara Nranian, a parliament deputy from the opposition Armenian Revolutionary Federation, dismissed the government pledges to make the domestic business climate more attractive to foreign investors.
“On paper, their programs seem to be a success,” Nranian told RFE/RL’s Armenian service. “But in reality, a businessman sitting somewhere in Europe and looking for investment opportunities, still prefers Turkey, Georgia or Asian states.”