Top Ten Economic Events Of 2012 Singled Out By Arka News Agency


1. Armenia’s Success in Doing Business 2012 Rating

In 2012 Armenia reached considerable success in World Bank and
International Finance Corporation’s Doing Business ranking. Armenia
improved its rank by 18 notches here – from the 50th position in the
2011 rating to 32nd in the 2012 rating.

Armenia strengthened protection of investors in 2012 by demanding
shareholders and related entities to present more detailed information
about deals between them in their annual reports and by simplifying
prosecution of high-level managers in cases when such transactions
inflict damage.

Armenia also improved its indicators for a number of categories,
particularly for “Dealing with Construction Permits” (from the 49th
the year before to the 46th now), “Getting Electricity” (from 143rd
to 101st), “Protecting Investors” (from the 98th to the 25th) and
“Paying Taxes” (from 152nd to 108th).

Armenian Prime Minister Tigran Sargsyan instructed the government to
make every effort to see Armenia among top 20 countries in the next
year’s rating.

2. Launch of Free Trade Agreement Negotiation with EU

The 27 EU member countries have unanimously decided on February 29 to
start negotiations on a free trade zone agreement with Armenia. This
agreement will enable Armenia to diversify its exports and to enter
the European market on favorable conditions.

Armenian President Serzh Sargsyan has said Yerevan intends to complete
the negotiations before the Eastern Neighborhood countries’ summit
which will be held in Vilnius in November 2013.

The parties completed the second round of the negotiations in
October after the discussion of the agreement’s ten sections –
trade in goods, competition, technical obstacles to trade, customs,
sustainable development, the intellectual property right, rules
related to goods’ origins, transparency, trade protection methods
and sanitary and phytosanitary measures.

At the third round launched on December 3 in Brussels, all the
mentioned sections were discussed again and four other texts were
discussed as well. Services, government procurement and energy were
among them.

3. North-South Highway

The construction of the North-South Highway was launched in Armenia
in September. Armenia has signed a $500-million loan agreement with
Asian Development Bank to construct this motor road.

The first, $70.4-million tranche of this loan is intended for
reconstruction of a 38-kilometer Yerevan-Ararat section and a
12-kilometer Yerevan-Ashtarak section. Reconstruction of the
Yerevan-Ararat section is under way now.

The second, $179.6-million tranche will be spent on reconstruction
of Yerevan-Talin road.

Japan International Cooperation Agency pledged $50 to 70 million.

The construction of this 556-kilometer transportation link, which will
improve Europe-Caucasus-Asia communication on the Eastern Europe and
Western Asia crossroad, is planned to be completed in 2017.

The goal of the project that has been initiated by Russia and Iran is
to upgrade Armenia’s main corridor road as part of a broader thrust
to improve connectivity, and boost trade, growth and livelihood
opportunities in the Caucasus and Central Asia sub-regions. The
transport corridor will stretch from the southern Armenian town of
Meghri, on the border with Iran, to Bavra in the north on the border
with Georgia. The North-South transport corridor will enable Armenia to
mitigate the effects of the blockade imposed by Azerbaijan and Turkey.

4. New VIP Hall Opens at Zvartnots Airport in Yerevan

A new VIP hall was opened at Zvartnots international airport in
Yerevan in March.

The hall is a part of the new passenger terminal that was opened in
September 2011. The hall that has a separate entrance and car parking
is intended for VIP passengers and members of official delegations.

Marcelo Wende, representative of Corporacion America and CEO of
Armenia – International Airports, said that the new hall can handle
50,000 to 60,000 passengers a year. This is 2% of the total number
of passengers the airport serves every year.

The passenger terminal was opened in September. The opening ceremony
was attended by Armenian President Serzh Sargsyan.

The 34,000 square meter terminal can handle up to 3.5 million
passengers every year instead of 1.6 million before.

The number of tables for passenger check-in, equipped with modern
CUTE technology, has been increased from 21 to 50.

5. Armenian Parliament Ratifies CIS Free Trade Zone Agreement

Armenian National Assembly has ratified the CIS Free Trade Zone
Agreement. Armenian Economy Minister Tigran Davtyan, presenting the
agreement to lawmakers, said the agreement will have positive impacts
on Armenia’s economy and spur GDP growth and exports.

Armenian manufacturers and exporters will not be burdened with
customs duties, and this will contract their expenses and facilitate

Armenia is the fourth country after Russia, Belarus and Ukraine that
has joined this agreement.

The CIS Free Zone Agreement has been signed on October 18, 2011 by
eight countries – Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan,
Moldova, Tajikistan and Ukraine. Azerbaijan, Turkmenistan and
Uzbekistan have expressed wish to think over the matter.

Along with usual for such agreements provisions on exemption of tariffs
on imports, the parties of the agreement are committed to ensure to
ensure national regime and observe international rules of subsidizing.

This agreement differs from similar agreements in the CIS territory –
it specifies rules for settling disputes and mechanisms of forcing
parties to comply with them.

6. Natural Gas Price Negotiations among top issues under discussion
in 2012

The price for natural gas was widely discussed in Armenia this year.

Rumors about possible rise in gas prices emerged in early July.

According to the rumors going around, 1,000 cubic meters of the natural
gas imported from Russia were expected to cost $280 from October and
$320 from Jan 1 instead of the present $180.

Armenian President Serzh Sargsyan said after he met his Russian
counterpart, Vladimir Putin in Moscow on August 7 that they had
reached mutual understanding on the matter. After that, Armenian
government and Russian Gazprom started negotiating. The results of
these negotiations will be released later this year.

7. Meghri Hydro Power Plant Construction kicks off

A special ground breaking ceremony for the construction of hydropower
plant with a capacity of 130 MW and at a cost of $ 323 million took
place on November 8 in the southern Armenian town of Meghri, on the
border river of Arax separating Armenia and Iran.

According to the agreement, signed back in 2007, the hydroelectric
power plant, which will straddle the border river, will have the
capacity to produce 130 megawatts (MW) of electricity. Construction of
the power plant began simultaneously in Armenia’s Meghri and Iran’s
Qarachilar. Each of these two stations will annually produce 800
million kW / h of electricity. Construction of both stations will
be launched simultaneously to ensure 10-to-15-percent optimization
of expenses.

According to the Iranian minister, the construction will last for
five years.

The generated energy will be shipped to Iran via a 230 KW transmission
line now under construction. After the facility is built it will be
operated for 15 years by the Iranian Farat-Sepasat. The electricity
will be supplied to Iran to pay off the Iranian investment. After 15
years of operation, the hydropower will become the property of Armenia.

Some 2,000 specialists and workers are estimated to be involved in
this construction.

8. Technical Modernization of Sotk Gold Mine Over

GeoProMining, a diversified international mining group, invested $45
million in the technical upgrade of the Sotk gold mine in 2012. This
upgrade will provide for expanded exploration of the Zod field, which
is required as the innovative Albion technology will be launched at
the Ararat gold extraction plant. In 2011-2012 the company purchased
more than 30 units of mining equipment, and built a modernised fuel
and lubricants storage facility and machine maintenance premises.

The new gold extraction line with the innovative Albion technology at
the Ararat plant will help to significantly increase gold extraction
from sulphide-bearing ore from the Sotk mine. The Albion project in
whole is a complex project consisting of several parts: construction
of the new processing line with the advanced technology, efficiency
improvement of the mining operation at the Sotk field and upgrade of
its technical fleet with new equipment.

The newly bought equipment includes excavators to load ore, dump
trucks to transport ore, bulldozers, graders, maintenance trucks, etc.

Most machinery has been purchased from the global producers of mining
equipment Caterpillar and Komatsu this year.

9. Armenian Government Decides to Extend Term of Nuclear Power Plant’s
Operation for 10 Year

Armenian government decided in October to prolong the term Armenian
Nuclear Power Plant’s operation for ten years. Earlier, experts said
the plant may function until 2016.

Energy Minister Armen Movsisyan, grounding on the ministry’s
assessment, said the plant’s life should be prolonged for a decade,
especially taking into account that construction of a new nuclear
unit is estimated to take ten years as well.

Armenia plans to build a new 1,000-megawatt unit. The energy ministry
says the project is estimated to cost $5 billion.

As much as $110 million (own and attracted funds) has been spent on
securing safe operation of the facility.

The Armenian Metsamor nuclear power plant is located some 30 kilometers
west of Yerevan. It started operating in 1976. Only one of its two
units operates now. This 407.5-megawatt unit was commissioned in 1980.

The plant generates approximately 1.2 to 2.5 billion kilowatt/hour
electric power a year (some 45 to 50 percent of Armenia’s electricity).

10. World Bank Marks 20th Anniversary of Its Activity in Armenia

On December 4, the World Bank marked the 20th anniversary of its
activity in Armenia. The WB has invested $1.6 billion in 57 projects
for these two decades.

Now 14 WB-financed projects are being implemented in Armenia now.

In autumn 2012, the World Bank ranked effectiveness of its activity
in Armenia at 7.6 points of 10, the bank’s treatment of clients 8.6
points and personnel’s skills at 8.3 points.

The term of the strategy of partnership with Armenia worked out in
2009 expires in mid-2013.

The WB-allocated funds for supporting the government total $640.6
million (IDA/IBRD).

The strategy of support for Armenia for 2014-2017 will take force on
July 1, 2013. -0-