$1 billion of foreign investments in Armenia: PR ploy or real growth?

May 30 2023
  • JAMnews
  • Yerevan

“For the first time in the history of Armenia, the volume of foreign direct investment amounted to about $1 billion, which is 5.13 percent of our GDP, ” Economy Minister Vahan Kerobyan said, commenting on last year’s figures.

He also talked about the need for multilateral and diversified economic relations with different countries. He said that in the near future Armenia will appoint trade representatives in China, Germany and the United States.

Economist Atom Margaryan regarded the minister’s announcement of direct investment as manipulation, which experts will not take seriously. Talking about the possible appointment of trade representatives, the expert recalled that in the embassies “there were and still are those holding similar positions, so there is nothing new in this.”

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Vahan Kerobyan stated:

“In terms of foreign direct investment-GDP, the government planned to reach 6 percent, and in terms of investment-GDP, 25 percent.”

According to interim data, the second figure is already 21.7%, and since the final data are usually “significantly higher than the intermediate”, the minister believes that the government managed to “get close enough to the target”.

Kerobyan says that if the investment-to-GDP ratio reaches 25 percent, it will mean that the transition from consumption-based economic growth to investment-based growth has been achieved.

According to Kerobyan, the goal of this undertaking is to increase trade with China, Germany and the United States. He said that now Armenia has trade representatives in Iran and the World Trade Organization. The Minister explained the importance of this step by the example of Iran — a trade representative was appointed two years ago, and trade has doubled during this time.

Talking about future plans, he stated that the Armenian government intends to diversify trade and economic areas, work more with the Arab, European and American markets.

Economy Minister Vahan Kerobyan maintains any such activity was an isolated incident

Economist Atom Margaryan says the figures announced by the minister will surprise no one. In contrast, he recalled that the dollar has depreciated, the dram has strengthened, and inflation has recorded an “unprecedented jump”. Margaryan asks how many jobs have been added with a billion investments and in which industries:

“Yes, it is possible that the treasury received money from the mining industry, casinos, offshore companies and Russian capital, escaping in the pockets of deserters from the Russian Federation. But the question arises: which high-tech industries have strengthened, expanded and, most importantly, created added value and increased prosperity?”

According to Margaryan, the announcement is just a PR move.

“It seems to the government that the more the numbers are inflated, the easier it will be for people to forget what is happening at the borders, what is happening in Artsakh. Have them present, in order, what high-yielding jobs have been created and in what area, the entities receiving or making these investments, and what trajectory they have created.”

Margaryan warns that there are investments that could be dangerous for the country and gives the example of the mining industry and the environmental consequences of its activities. “Non-positive” investments also include investments in the gaming business. To solve current problems, he speaks of the need for investment in the military industry.

Margaryan notes that in the case of the declared volumes of investments, the country’s public debt is illogical:

“If so much money came from private sources, then why did our country’s public debt increase by 1 billion every year and today it is about 11 billion? It would be nice if high-ranking officials explained this paradox.”

Commenting on the intention to appoint trade representatives of Armenia in China, Germany and the United States, Margaryan says that the public administration system is already excessively inflated and it is not worth increasing jobs in this way:

“These are also budgetary expenses – several people with families, from young to old, will have a good time in these countries.


Emil Lazarian

“I should like to see any power of the world destroy this race, this small tribe of unimportant people, whose wars have all been fought and lost, whose structures have crumbled, literature is unread, music is unheard, and prayers are no more answered. Go ahead, destroy Armenia . See if you can do it. Send them into the desert without bread or water. Burn their homes and churches. Then see if they will not laugh, sing and pray again. For when two of them meet anywhere in the world, see if they will not create a New Armenia.” - WS