Foreign investors close their wallets to Armenia

/By AzerNews/

By Laman Sadigova

Investments in Armenian economy are incessantly decreasing mainly as a result of the economic stagnation in the country.

In the first half of this year, foreign investment in the Armenian economy decreased three-fold compared to the same period last year – from $180 million to $65 million.

"The investments decreased from almost all countries and touched all spheres of economy," Armenian daily Haykakan Zhamanak reports.

This is happening in the first half of the year, when Armenia has just become a part of the Eurasian Economic Union, and while promises are being made for an increase in foreign investments.

"The most catastrophic numbers are indicated in the fields of energy, mining and agriculture," the report underlined.

Russia, Armenia’s main partner in the EEU that traditionally makes the largest investment in the Armenian economy, has reduced investments by more than 12 times in the first six months of 2015.

While the volume of direct investment from Russia amounted to $88 million last year, it could hardly overcome a bar of $7 million this year.

Now, when the combination of Western sanctions and the plunge in the oil prices are ravaging the Russian economy, Armenia is suffering collateral economic damage.

Armenia, a small weak country without energy resources, isolated from international projects, is likely to be torn apart from the inside. Apart from the fact that Armenia is becoming a plaything in the hands of powerful states from time to time and has no stable and clear political course, the country suffers from its inner problems.

The incompetent Armenian authorities do nothing to improve the state of the country and raise the living standards of the citizens to stop them from running abroad in their attempts to find a better life. The government lacks any comprehensive program or scenario to escape the challenging crisis.

The problem lies in the fact that Armenia does not present a big interest for foreign investment, both economically and politically. Once having the best Railway logistics in the South Caucasus, Armenia has lost its credibility and has brought on blockades due to its aggressive policy. Armenia keeps 20 percent of Azerbaijan's internationally recognized territory under its control and places genocide claims against neighboring Turkey. The world's leading capitals are beginning to understand that Armenia expects support for its aggressive plans against its neighbors in exchange for inter-state partnership.

The Armenian political elite has been repeatedly accused of corruption and various crimes.

According to a World Bank report from last November, the Armenian economy is the most monopolized among all the countries of the former Soviet Union and Eastern Europe. In other words, it is not very wise on the part of foreign investors to fill the pockets of the Armenian authorities.

Nobody wants to invest in Armenia, and society needs to figure out why. Is it that investors do not trust the current Armenian government or do they not see any prospects for the country's future? It is most likely that both reasons are relevant. Obviously, Armenia needs investors, but the sad fact is investors do not need Armenia.