UNCTAD: Armenia can aim for billion-dollar export sales over if  properly leveraged through effective investment promotion

ArmInfo. Armenia can aim for billion-dollar export sales over the next 10 to 20 years in several activities that, if properly leveraged through effective investment promotion, could help concretize the economic revolution promised by the country's  authorities. This is among the key conclusions of UNCTAD's investment  policy review (IPR) of the country, available at the following link:  

https://unctad.org/en/PublicationsLibrary/diaepcb2019d3_en.pdf

The IPR of Armenia, launched 12 November at the eleventh session of  UNCTAD's Commission on Investment, Enterprise and Development,  highlights the country's potential across a range of industries,  including the booming high-tech industry, tourism, textile and  garments, wine, agri-business and pharmaceuticals.

It also explores nascent activities for billion-dollar club  candidates - industries with potential but for which it is too early  to set such export targets. These include business process  outsourcing, regional logistics and food safety, aircraft repair and  maintenance, regional financial services and higher education.

Armenia is no exception to the global foreign direct investment (FDI)  trend. Investment flows are struggling to recover from the heights  reached before the financial crisis. A wait-and-see attitude prevails  among investors, who have reacted with caution to the recent  political transition.

Achieving the government's vision of fighting poverty and  unemployment through a structural transformation of the economy will  require investment policy reforms and a more significant investment  promotion effort.

"Our country is ripe for an economic revolution based on high-tech  and innovative activities and we are working to modernize the  business environment," said Armenia's ambassador to the UN in Geneva,  Andranik Hovhannisyan. "Timing for investment in Armenia is now both  right and ripe," added the country's United Nations resident  coordinator, Shombi Sharp.

"The IPR will help us approach the fundamentals of our reform agenda  through the prism of the Sustainable Development Goals and will  provide us with a structured roadmap to engage with our international  partners for development support," said Arman Hovnanyan, deputy  minister of economy.  UNCTAD's director of investment and enterprise,  James Zhan, stressed that the IPR, which was undertaken at the  request of the president of Armenia, takes into account comparative  advantages and constraints. It makes recommendations to develop an  export-led growth through efficiency-seeking FDI.

Deputy minister of economy Avag Avanesyan underlined that "trade,  investment and value addition go hand in hand" and stressed that "the  IPR provides a blueprint on how to move forward in a sustainable and  committed way."

Beyond measures to tap the export potential through investment, the  IPR includes the broader policy objective of promoting inclusive  growth and sustainable development. It underlines specific measures  for spreading benefits to the country's regions, creating employment  and linkages with local suppliers, including by moving to full  package manufacture in the textiles and garments industry, and  extending benefits of tourism to areas outside the capital Yerevan.

The IPR also shows ways to deepen the high-technology sector and make  Armenia a leading hub for innovation, data science and artificial  intelligence. It outlines how to extend research and development  capability in the pharmaceutical industry to transform a small  generics industry into larger-scale manufacturing.

Investment in the target industries can come from a mix of sources,  including domestic, FDI and joint ventures, and the diaspora,  Armenia's key competitive advantage, will continue to play a key  role, the IPR says.

For each target industry, a tailored investment promotion strategy  needs to envision sector-specific policy packages, including but not  limited to tax policy measures and specific actions to improve the  overall investment climate, concludes the IPR.

Over the last 20 years, UNCTAD has supported over 50 developing  countries and countries with economies in transition by conducting  investment policy reviews. It has also provided technical support to  implement the reviews' recommendations. Studies show the reviews have  helped countries attract and benefit more from increased FDI, while  improving their business climate.