Wednesday, September 2 2020 19:17

ArmInfo.After the coronavirus crisis, changes in the way the government works and the establishment of institutions, investments in the Armenian economy  will increase. Economist Vahagn Khachatryan stated this on September  2 during a press conference. However, he noted that large investments  should not be expected until peace is established in the region.

"We, as a state, are obliged to restore our relations with neighbors,  this concerns Turkey, Azerbaijan.  Everyone should have a normal  relationship. Why not use the powerful potential of the Turkish  economy? I understand all the reasons. But nevertheless, the issue of  regulating relations with neighbors should not be forgotten on the  agenda. And we must be ready for this," the expert said.

He noted that investors could direct capital to risk areas only when  the level of profitability is high enough.  In this vein, Khachatryan  referred to the experience of Iraq, where oil fields continued to be  exploited during the war, the profitability of which was 150-200%. 

"This is not the case in our case," he said. When comparing the  current situation in terms of investments with the 2000s, Khachatryan  noted that for the most part it was nothing more than money  laundering. "In the overall structure of investments, the lion's  share fell on the mining sector, electricity and telecommunications.   This is where the high unreasonable tariffs for electricity and  telephone communications come from," Khachatryan said, adding that  the funds were also directed to the construction sector, which is  known for its shadow turnover.

For example, now Nikol Pashinyan's government, according to the  expert, cannot encourage investors to invest in the mining industry,  giving them freedom of action and promising not to demand compliance  with environmental standards. He kind of encourages them, reminding  them that we have environmental standards. Yes, we condemn that no  decision has been made on Lydian, but the latter is mired in the same  problem," the economist said.  

To recall, the volume of total foreign investments in the real sector  of the Armenian economy decreased in the Q1 of 2020 by 38.6% y-o-y,  amounting to $ 418 million, while a year earlier, an increase of  12.7% was recorded. In their structure, the volume of FDI showed a  stagnant growth of 1.4%, amounting to $ 143 million, against a  decline of 20.5% a year earlier. As a result, the share of FDI in  total foreign investment in Q1 2020 increased to 34.2%, exceeding the  figure not only a year ago (20.7% in Q1 2019), but also two years  (29.4% in Q1 2018).  

By country, Russia holds the lead in terms of total investment and  FDI - for the first quarter of 2020, $ 158.1 million (with a reversal  of the annual dynamics from 47.9% growth to 48.6% decline), incl. FDI  - $ 120.8 million (with deterioration in y-o-y dynamics from 23.6%  growth to 5.2% decline).  The second position was secured by Germany  - $ 131.5 million (with the release of the y-o-ydynamics from the  20.2% decline to 29.3% growth), of which $ 3.3 million is FDI (with  the exit from the significant decline to no less significant growth  2.5-fold).  

The TOP-3, as before, is closed by offshore Cyprus, from where  investments in the total volume of $ 43.7 million were received in  the Q1 of 2020 (with an exit from the 20.6% decline 3.1-fold growth),  of which FDI amounted to $ 13.7 million ( with a sharp acceleration  in y-o-y growth from 2.1% to 3.5-fold).