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  • Western Investment Expansion

    WESTERN INVESTMENT EXPANSION

    The National Statistics Service reported a sharp decline of investments
    in Armenia. Total foreign investments in the Armenian economy in
    2012 dropped by 8.6% compared with 2011, reaching 1,587 million. And
    foreign investments in the real sector of the Armenian economy total
    751.8 million, having decreased by 7.9%.

    No one wanted to invest in Armenia, apparently due to the political
    situation. However, experts say after April 9 when passions will
    calm down, investments will flow to Armenia. This applies to several
    branches which are still monopolized or highly limited: air flights,
    imports of essential goods and mining. These branches are always in
    demand, so investments will be made unlike high-tech which is risky.

    Armavia's bankruptcy may lead to appearance of a major foreign capital
    in Armenia, the press reports, either American or Italian. Sale of
    Yerevan City supermarkets to the French Carrefour may result in the
    dominance of a foreign company in the market of essential goods. And
    the promised investment of over 400 million in the development of
    gold deposits by the British Amulsar company of Armen Sargsyan can
    change the situation of investments in the mining sector.

    Actually, redistribution of property in Armenia may turn into a process
    of transfer of the real economy to the Western capital. Local investors
    who lost political levers, as Ashot Yeghiazaryan says, prefer taking
    their capital out of the country. Actually, they are providing room
    for foreign capital.

    If world giants appear in the tiny market of Armenia, it will be hard
    for local businessmen. The government, along with liberalization of
    economy, should take measures to protect local production. Otherwise,
    the Western capital which will repress local oligarchy will be the
    next monopolist.

    It is noteworthy that the leader of foreign investments in the real
    sector of the 2012 is France with 230.4 million USD, having grown 2.3
    times as compared with 2011. Average Russian investments in the real
    sector of Armenia totaled USD 122.7 million (down by 68.8%). In 2012
    Canada invested approximately USD 106.6 million in Armenia, which is
    3.4 times more than in 2011. Approximately half of the investments
    went to telecommunications.

    Russia is taking out its capital from Armenia to be replaced by Western
    giants. It has already happened in the banking sector where HSBC and
    ACBA-Credit Agricole are leaders in Armenia. Besides, in regard to
    foreign debt, Armenia owns more to Western funds, IMF, WB, and EBRD.

    It is time for other branches.

    Naira Hayrumyan 11:35 02/04/2013 Story from Lragir.am News:
    http://www.lragir.am/index.php/eng/0/economy/view/29479

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