# OCTOBER ECONOMIC HAI-LIGHTS

 

SOURCE:U.S. EMBASSY YEREVAN

DATE OF REPORT:  99/11/17

AUTHOR:  GEVORG ADAMYAN, ECONOMIC ASSISTANT

 

INTERNATIONAL COPYRIGHT, U.S. &FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 1999.  ALL RIGHTS RESERVED OUTSIDE OF THEUNITED STATES.

 

 

FDI in Armenia Was USD 52.1 MillionDuring First Half of 1999

 

Alexander Petrossian, Head of theBalance of Payments and Foreign Trade Department of the Ministry of Statistics,State Register, and Analysis, announced that the volume of foreign directinvestments in Armenia totaled USD 52.1 million for the first half of theyear.  Annual volumes of FDI overthe past three years are indicated in the chart below:

 

Year                      FDI(million U.S. Dollars)

----                         -------------------------

1996                     17.6

1997                     51.9

1998                     232.4

 

The significant increase in FDI in1998 was due to the privatization of large Armenian enterprises, saidPetrossian.  FDI for the first halfof last year was USD 98 million, indicating a year-over-year decline of 47percent.

 

Armimpexbank to Double AuthorizedCapital

 

Bagrat Asatrian, the Chairman of theBoard of Armimpexbank, announced that the board of shareholders of Armimpexbankvoted to double the bank's capital. British-Armenian entrepreneur Vache Manukian, who owns 76.57 percent ofArmimpexbank's shares, will increase his ownership by 1.9

percent.  As of October 1, 1999, the capital of Armimpexbank totaledUSD 2 million, making the bank the second largest in Armenia in terms of volumeof capital.

 

EBRD to Provide USD 10 Million Loanto Develop Armenia's Banking Sector

 

Tigran Sargsian, Chairman of theCentral Bank of Armenia, announced a new program with the European Bank forReconstruction and Development (EBRD) to help develop Armenia's bankingsector.  According to the agreementsigned between the Central Bank and the EBRD, the latter will provide a totalof USD 10 million in credit guarantees to eligible banks.  Armagrobank, Armimpexbank, and theAgricultural Cooperative Bank of Armenia have already been selected to participatein the EBRD program.

 

Armenian Government AbrogatesCustoms Privileges for Foreign Investments

 

The Government of Armenia announcedin a decree dated October 14 that it will revoke customs privileges for foreigninvestments originally authorized by Armenia's "Law on ForeignInvestments."  Until thisdecree was signed, investments by local enterprises with foreign capital inequipment, technology, and raw materials were exempt from customs duties.  The government plans to discuss a newdraft law on investments soon.  Thelaw will include customs privileges for foreign investors similar to the

original law.

 

Reduced Nighttime Electricity RateBegins

 

The Interagency Energy Commission ofArmenia announced that as of October 1, the nighttime tariff for electricity is15 drams (3 cents) per kilowatt hour, a 40 percent reduction from the daytimerate of 25 drams per kwh.  The newrate is in effect from 11 pm until 7 am. This program has already been tested in Kotayk region and in severaldistricts of Yerevan.  Approximately 350 subscribers have installed special metersto determine the timing of their electricity consumption, with the numberincreasing sharply.  The governmentplans to provide meters free of charge to the poor.  Others must pay for meters but will receive a credit in theamount of the cost of the meter to be applied to future electricity charges.

 

Contact Info

 

For more information regardingArmenia's economic climate, please contact:

 

Gevorg Adamyan, Economic Assistant

U.S. Embassy, Yerevan

18 Marshal Baghramian Ave., Yerevan375019, Armenia

Phone: (374 2) 521-611, 151-551

Fax: (374 2) 151-550

E-mail: [email protected]