Annual economic balance
By Mher Ohanian
Yerkir/arm
January 14, 2005
The economic index of 2004 was almost similar to the previous year. It
was again composed of double digits – 10 (previous – 13). The passed
year also had 3 per cent of inflation and an approximately same size
of investments, which is noteworthy, given that the year 2004 did not
get significant funding from Lincy foundation.
Industry, energy, communications
In a way, the year was unfavorable for industrial development, namely
in jewelry and gold spheres. Nevertheless, the overall export of
Armenia increased by 25 per cent.
An evident success of 2004 was the start of the Iran-Armenia gas pipe
construction. This will on the one hand raise the energetic
independence ofthe country and will create competitive prices on gas
(in competition with Russian gas). In addition, it will also become
possible to import cheap gas from Turkmenistan.
Another milestone of 2004 was the eventual agreement with ArmenTel,
which yielded at least one sphere of monopoly – cell phone
communication.A new operator is expected to enter the market. It is
Kharabagh-originated company called K-Telecom. We shall witness its
activities in the coming six months.
Investment balance
The main progress in this respect was the sale of control package of
shares of the Zangezur factory of copper-molybdenum to the German
Chronimed company.
The overall cost of the deal peaks 132 million dollars. In fact, there
are 4 shareholders of the factory: Chronimed (60% shares), `Clean
iron’ factory of Yerevan (15% shares), `Armenian Molybdenum
Production’ cjsc(12.5% shares) and `Zangezur mining’ cjsc (12.5%
shares). During 5 primaryyears, there will be 150 million dollars
invested in the branch.
Note that the copper-molybdenum factory was sold during the world
crisis of copper and molybdenum, which probably accounts for the high
price of the sale.
In addition, the success of the deal is about the investment prospects
and creation of jobs, which are expected to rise from current 3000 to
4500.
Another successful investment during 2004 was the purchase of 100 per
cent share of the Armenian Leda Systems and Arsed companies by the
famous international Sinopsys company, involved in high-tech. It shows
the big potential of Armenia in this field.
Preliminary estimations show 300 million dollars of total private
investments in Armenia during 2004. However, given the size of shadow
economy, the real number is likely to be way bigger.