YEREVAN, December 16. /ARKA/. Armenia’s accumulated foreign direct investments (FDI) were estimated at $106 million at the end of 2014, according to the findings of the report called ‘Eurasian Economic Union (EEU) and Eurasia: Monitoring and Analysis of Direct Investments’ prepared by the Eurasian Development Bank (EDB) Centre for Integration Studies.
The report says Armenia has no objective prerequisites for the tangible growth of its FDI abroad.
According to the report, there are three main sources of overseas expansion – emergence of subsidiaries of large national, private and transnational corporations, direct or indirect involvement of government in the implementation of FDI through controlled companies and export of capital in the form of direct investment by individuals without having to change their citizenship.
“None of these factors is effective in Armenia. Thus, there are no large national companies with competitive advantages that would allow penetrating the markets outside CIS countries,” it says.
The report notes that Armenia, seeking to accelerate economic development, pursues a policy of creating a positive balance of cross-border capital flows.
“With regard to the investment by individuals, Armenia is a typical country of out-emigration. The wealthy citizens of these countries, when buying overseas property, typically seek also local citizenship,” it says.
According to IMF, at the end of 2013 the most significant accumulated Armenian FDI outside the CIS were recorded in China, standing at only $10 million. Another $2 million of Armenian FDI were found in Thailand and $1 million worth investments in Italy, Lithuania, and Macedonia respectively.
The report says, particularly, that in 2012 a wealthy Armenian businessman Gagik Tsarukyan bought a hotel in Latvia for $60 million. However in 2013-2015 the hotel has been closed for renovation. Additional investments in the repair could be worth $30 million.
The second largest FDI was made in the production of confectionery products in the Czech Republic. It was implemented by G. Avetisyan, who in 2003 established Marlenka International company in the Moravian-Silesian region. In 2009, he completed construction of a new industrial complex, and in 2014 launched the second phase of the factory. Total investments amounted to $20 million.
Armenia is primarily a recipient of FDI. According to the National Statistical Service, in 2014 net FDI in Armenia amounted to 1.836.5 trillion drams, of which 790 billion drams came from Russia. ($ 1 – 483.98 drams). -0-
