ARMENIA ACCOUNTS FOR 1% OF FOREIGN INVESTMENTS IN CIS COUNTRIES

Noyan Tapan News Agency, Armenia
Oct 17 2006

YEREVAN, OCTOBER 17, NOYAN TAPAN. According to the UN annual report on
foreign investments worldwide, the flow of foreign investments into
Armenia is quite small and made about 220 million dollars in 2005,
whereas the total amount of foreign investments in CIS countries
made 27 billion dollars last year. Thus Armenia accounts for only 1%
of these investments.

According to Radio Liberty, the UN report published on October 16
not only observes the latest developments in this sphere but also
indicates the countries which are most attractive for investors.

According to a research, last year foreign businessmen invested about
14 bln USD in Russia, 7 bln USD in Ukaraine and 1.7 bln in Azerbaijan.

"Along with Georgia and Belarus, Armenia is in one of the last
positions on this list," Carman Calutay, one of the research authors,
said.

According to him, foreign investors are attracted first of all by
natural resources, then – by consumer goods and the food sector
of CIS countries. Although Armenia lacks natural resources and a
big consumer market, according to the research authors, it has a
considerable potential for attracting foreign investors.

By another mechanism of calculation which shows how much interest
foreign investors have in the infrastructures, human potential and
educational level of the given country, Armenia is in 77-79 places
among 141 countries. It means that Armenia is in a middle position
in the world in terms of its potential.

The report authors also indicate that last year a considerable decline
was registered in the foreign invsetments in three CIS countries –
Russia, Kazakhstan and Azerbaijan. In 2004, 3.6 billion dollars was
invested in Azerbaijan, while in 2005 this index almost halved.

"The fact is that foreign investments are mainly made in Azerbaijan’s
gas and oil sectors, and as in 2005 the investors made huge profits
in these sectors, there was no need to invest new sums there,"
Vitali Kramarenko, Director of the International Monetary Fund’s
(IMF) Azerbaijani branch, explaines. According to him, this tendency
will continue in the coming years. "These programs will mainly be
completed in 2007. They include the operation of a gas pipeline and
an oil pipeline and extraction of huge resources in this sector. So,
there will mostly be a decline in foreign investments in Azerbaijan
in the next 1-2 years," V. Kramarenko said.