Strategy

Armenia is a small landlocked country with exceptional geopolitical and logistical obstacles to trade. Upon independence in 1991, there was a painful collapse of some prominent industries, as their assured markets were lost, but a traditional strength in science and technology survived. Now, nearly 30 years later, there is a sense that Armenia is truly an “economy in transition” with growth in areas of traditional strength and an emerging revival in dormant sectors of the economy. Nontraditional exports are growing, though from a small base, and hightech activities are booming, fuelled by local skills and the diaspora. Looking to the future, this report is tasked to assess the prospects for export and efficiency-seeking investment, with particular reference to the role that FDI could play in developing traditional sectors (e.g. textiles, agribusiness, wine or tourism) as well as new sectors (such as artificial intelligence and deep technology, pharmaceuticals and several regional services) and contributing to sustainable development and inclusive growth. The chapter begins with the strategic context: what are Armenia’s export markets, does it offer the efficiencies that investors seek and how much of a resource is the diaspora? This part is not prescriptive. The current market arrangements and the efficiency profile are taken as given to identify the investment prospects for export and efficiency-seeking investors. The second part selects the most likely winners and assesses their prospects for FDI attraction. Where needed, new policy measures are proposed to complete the reforms recommended in chapter I. A review of key outcomes needed in the current re-engineering of investment promotion closes the chapter.

Sustainable Development Goals:

No Poverty

Zero Hunger

Decent Work and Economic Growth