Armenian economy scares foreign entrepreneurs

/By Azernews/

By Rashid Shirinov

Recently, another dreadful problem shook Armenia up – the country keeps losing volumes of foreign business investment. This aspect is very important in the prosperity of economy of any country, whilst the state of Armenian economy frightens foreign business people.

The reason of such behavior of entrepreneurs is fairly clear – Armenia is the most monopolized country among the CIS and Eastern Europe countries. This conclusion was drawn by a number of international statistics institutions. The Armenian economy does not seem to have any positive prospects in the near future, so foreign investors do not want to take the risk.

Most of Armenian entrepreneurs themselves do not venture to open a business in the country and prefer foreign countries to do it for them. A lot of Armenian businesses withdraw their capital out of local banks, well showing that even the Armenian business feels bad in the country. Thus, the Armenian industry almost does not develop, and foreign investors just do not want to invest in a pre-failed project.

It is curious that McDonalds, the world's largest fast food chain, abandoned the idea of opening their first restaurant in Armenia. The reason of such decision are worthless business factors of this country, the representative of McDonalds noted. If a foreign company decides that even selling of hamburgers in Armenia is unprofitable, other major production companies have nothing to do there for sure.

Recently, the Armenian National Statistical Service announced that, in 2016, investments by 1.7 billion drams ($3.5 million) instead of 60.1 billion ($126 million) of last year, were detected. That is, most likely, the greatest decline of foreign investments to the country in the history of Armenian government.

In spite of the obvious evidence of Armenian economic problems, the country’s Central Bank’s Chairman, Artur Javadyan, behaves as the most innocent in this situation. He said that he does not know why the foreign investments in Armenia have decreased, and that he doubts the accuracy of statistics published in this regard, despite it is official: “I am not prepared to answer that. I am not sure if they dropped 35 times.”

He also denied the reliable data about $1.8 billion of illegal exports from Armenia.

To cut a long story short, in spite of huge problems in the country, Armenian officials try to prevent panic among the population for as long as possible, but that will not last much. Hence, observing this situation foreign investors does not seem to enter the country in the near future.