Head of EDB speaks about cooperation between Armenia and CIS countries
Moscow, 12 December 2012. Investment flows to and from Armenia should be diversified, primarily through deeper cooperation with Belarus, Kazakhstan, Ukraine and Georgia. However, a weighted approach to diversification is very important. Igor Finogenov, Chairman of Eurasian Development Bank’s (EDB) Management Board, said this on Tuesday in Yerevan’s Griboedoff discussion club (www.griboedoff.net) — a unique place where the intellectual elites of Russia and Armenia meet for informal talks.
Igor Finogenov focused on the economic realities which should become the foundation of Armenia’s cooperation with the countries in the region. In particular, he pointed out to a «strange imbalance» observed in recent years. Russia accounts for more than a half of all foreign direct investment in Armenia and for the bulk of private money transfers to the country which support its domestic consumption (approximately US $2 billion a year). However, Armenia’s export destinations are primarily non-CIS countries (the EU in particular), whose share grew to 80% this year. The share of third countries in imports is also significantly higher than that of the CIS: in 2011 it reached 71%.
The head of EDB believes that, «an attempt should be made to regain interest of the Kazakh and Ukrainian businesses and analyse the viability of the project to assemble Belarusian equipment in Armenia which was discussed earlier.» «At the same time, the Armenian capital should not be as shy in the CIS countries and Georgia,» he emphasised.
Igor Finogenov believes that Armenia’s economic strengths are engineering, real estate, hotel business, and the food industry. «In these spheres Armenia is at least as competitive as other Commonwealth countries,» said he. «The objective of institutions such as Eurasian Development Bank is to promote projects which help develop the strengths of their member economies.»
Armenia’s investment portfolio in EDB is US $94 million. Loans were provided primarily to local banks in the framework of EDB’s targeted micro-finance and small and medium-sized business finance programmes. In addition, the Bank provided US $30 million for the programme to import wheat, which helped to reduce significantly the adverse effects of the global grain deficit in 2011.
At present EDB is considering a number of new investment projects in Armenia. These include the development of polymetallic deposits for the production of molybdenum and copper concentrate with high gold content. The project needs US $252 million in investment. Another project is the construction of a high-class logistics centre in Yerevan. The Bank is also reviewing applications for financing the breeding of sturgeon in Armenia and the production of black caviar for export, primarily to Russia.
«In other words, we talk about the most competitive industries,» Igor Finogenov summarised. «We should be able to use the existing potential and transform it into a real economic result to ensure the growth and development of our economies.»
After Igor Finogenov concluded his speech, participants in the club, among whom were governmental and public figures, politicians and businesspeople, discussed Armenia’s economic strategy and its development scenarios for the next ten to fifteen years. In particular, statements were made by Vache Gabrielyan, Minister of Finance of Armenia, Rafik Sargsyan, President of Dvin Concern, Karen Kazaryan, General Director of Global Metals, Yuri Gusev, General Director and Chairman of the Board of Directors of VTB Bank (Armenia), and Amayak Ovannisyan, Chairman of the Association of Political Analysts.
Additional Information
Eurasian Development Bank is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth and the expansion of mutual trade and other economic ties in its member states. EDB’s charter capital exceeds US $1.5 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan. Read more at https://www.eabr.org.