the european times - armenia 2

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ARMENIA

INTRODUCTION• prime minister outlines economic priorities 3

• economy Continues to Grow 5

• ministry reaching out to Diaspora armenians 6

• Long history of strong performance in education 7

• armenian embassy in Brussels a Gateway to armenia 8

• Yerevan: Cultural Crossroads and Dynamic modern Business Base 9

GOVERNMENT• stable Democratic Government 11

BUSINESS & INVESTMENT OPPORTUNITIES• making armenia even more attractive for investors 14

• strengthening international ties 15

• armenian Development agency: Your Gateway to armenia 16

• smes playing Leading role in national economy 17

• shen holding 18

• Foundation spearheading ambitious Development projects 19

• amcham: advocate for Business 20

• Defending interests of Local private sector 20

FINANCE• Finance minister outlines Government’s priorities 22

• World Bank has made Long-term Commitment to armenia 23

• eBrD Bond marks milestone for Capital markets Development in armenia 24

• usaiD enthusiastic about armenia’s Future 25

• a Long-term partner in armenia 26

ENERGY & NATURAL RESOURCES• Working towards increased energy independence 28

• mining-sector Leader has strong track record in europe 29

IT & TELECOM• iCt: Key Driver of the national economy 31

• unicomp 31

• Foundation Driving the Growth of high-potential it sector 32

AGRICULTURE & FOOD INDUSTRY• high-potential agriculture sector Continues to Grow 34

• mancho Group 35

• Bari samaratsi 35

TRANSPORT• Focus on transport infrastructure 37

HEALTH• upgrading Quality and accessibility of healthcare

services 39

TOURISM• Developing a Diverse, sustainable tourism industry 41

• ararat hotel 43

• sochi palace hotel 44

• royal plaza hotel & royal palace hotel 46

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the european times

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prime minister outlines economic priorities

Tigran Sargsyan, Prime Minister of Armenia since 2008, discusses the countryʼs economic development strategies and decision to

join the Customs Union.

European Times: Why did Armenia choose to join the Customs Union with Russia and not the DCFTA with the EU?

Tigran Sargsyan: armenia made the decision to join the Customs union with a vision towards sustainable growth boosted by a favourable economic environment and further development of existing economic and humanitarian ties. this decision was also based on the armenian-russian strategic partnership, as well as the centuries-long friend-ship between our nations. thanks to the free movement of goods and capital in the Customs union and the Common economic area, armenia will gain wide access to the large Cu market. this, by the way, is a traditional market for armenian goods, which are more compatible with the technical regulations existing there. in addition, we forecast

a considerable increase in FDi in armenia. Located at the crossroads of civilisations, armenia has the potential to become a good platform for the development of economic ties between Cu countries and the middle east.

European Times: How are you promoting rural development?

Tigran Sargsyan: Balanced development is one of our top priorities, for economic and, especially, for political reasons. the concentration of armenia’s political, social and economic capacities in the capital, Yerevan, impedes the overall balanced development of armenia and limits Yerevan’s development as well. the govern-ment of armenia approved the territorial Development Concept in 2011, which was designed in cooperation with

introduction

ARMENIAthe european times

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sector

the armenian offi ce of the unDp. the concept basically highlights three major tasks: designing a toolkit to monitor the situation in armenia’s regions (marzes); determining criteria to evaluate the effi ciency of the state’s regional-development policies; and implementing a simulation model to plan medium-term expenditures through the state budget. in our efforts towards sustainable and pro-portional territorial development, our objective is to increase the quality of life in rural areas to a level more or less commensurate with that of urban areas. our Gyumri and Vanadzor techno-parks, which will open in 2016, are part of this drive, as are the already functioning fi nancial and educational centre in Dilijan, with its entire support-ing infrastructure.

“We have managed to build a strong

reputation for Armenia as a reliable

investment destination. The ongoing

promotion of investments is one of our key

strategies to build a more diverse economy

and develop more competitive industries.”

European Times: What are your strategies to ensure sustainable development for Armenia?

Tigran Sargsyan: the primary goal in our current agenda is to diversify the armenian economy. We continue to see a lot of potential in the iCt sector, and the results we have achieved over the past fi ve years show that we are on the right path. in 2011, the government of armenia shifted to an export-oriented industrial policy. We have identifi ed 11 sectors of our economy with higher growth potential and we have mapped out a strategy for their long-term development. this strategy focuses mainly on boosting exports to stimulate the production of high-quality goods, expanding into foreign

markets, and creating new jobs. this export-oriented indus-trial policy should enable us to move from a resource-based economy to a knowledge-based one. armenia’s economic evolution over the past decade shows that the armenian government has an important role to play in the structural formation of our economy. in this respect, i highly prioritise private-public partnerships as the most effi cient means of achieving our economic goals. i am confi dent that through a joint government and private-sector strategy, we can achieve measurable results and progress.

With the national programme that we started to implement two years ago, we are on the way to achieving our priorities concerning government support, proper state monitoring and transparency, all of which will result in a more effi cient business environment. our fi rst step in this direction was the development of a platform for public-private partner-ships and the establishment of an industrial development foundation to support businesses. We have also expressed our willingness to discuss and consider prospective invest-ment projects where government support and participation are required. For the fi rst time in the past 23 years, we have allocated funds from the state budget to support industrial development in armenia.

European Times: Why should international investors choose Armenia?

Tigran Sargsyan: armenia’s reforms designed to create a better business environment have made armenia a more attractive investment destination. We have had notable achievements in this respect over the past fi ve years, and this fact has been acknowledged by the World Bank. armenia was number one among Cis countries and 37th in the world in the World Bank’s “Doing Business” rankings for 2012. the government of armenia has demonstrated its strong interest in supporting investment projects, granting benefi ts and investing in infrastructure for large-scale investment projects. We have managed to build a strong reputation for armenia as a reliable investment destination. the ongoing promotion of investments is one of our key strategies to build a more diverse economy and develop more competitive industries.

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introduction

master reGiothe european times

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economy Continues to Grow

Since it became independent from the Soviet Union, Armeniaʼs economy has undergone a profound transformation. Once a centre for industrial production of goods exported to other Soviet states, Armenia has been building a new, market-oriented economy dominated by services (which accounted for 41.2% of GDP in 2012), industry (37.7%) and agriculture (21.1%).

the armenian economy achieved sustained growth in the double digits before the global economic crisis took its toll but is picking up again. after a slump in 2010 to 2.1% GDp growth, the economy reached 4.6% growth in 2011, 3.8% in 2012 and 3.2% in 2013, according to the World Bank. armenia’s current growth is driven mainly by the mining sector and, to a lesser extent, agro-industries. remit-tances from armenians abroad play a key role and reached 12.1% of GDp in 2011.

the World Bank’s “Global economic prospects” report issued in early January 2014 predicts an average 5% GDp growth for armenia over the period 2014 to 2016. the government’s ambitious reforms have created a market-oriented environment in armenia that is very open to trade, investments and techno-logical innovation. strong growth sectors include agriculture and iCt.

Continuing reforms and reducing risksthe armenian government’s priorities are to continue reform programmes, to fi ght poverty, and to strengthen the economy’s resilience to external shocks. in fact, armenia is one of the most active reformers in the world, according to the World Bank’s “Doing Business 2012” report. in addition, armenia has one of the most open investment regimes among Cis countries and has been improving its ranking on the heritage Foundation’s global “index of economic Freedom”.

armenia faces geographical chal-lenges as a land-locked country with limited transport routes. a key objective has been to improve the country’s transport infrastructure, particularly the road network, water

and wastewater systems, and connec-tions for exports. armenia now has free-trade agreements with russia, the eu and the us as well as open borders with three major markets, and is expected to join the Customs union with russia, Kazakhstan and Belarus later this year.

the construction of a pipeline to bring natural gas from iran in 2008 and the completion of the Yerevan thermal power plant in 2010 have given armenia more energy inde-pendence. another step forward was the recent “enterprise Develop-ment and market Competitiveness” project by the ministry of economy and the usaiD, which was aimed at enhancing e-commerce in armenia. innovative initiatives like these are keeping the armenian economy on the move.

© Ministry of Economy of Armenia


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ministry reaching out to Diaspora armenians

Hranush Hakobyan, Armeniaʼs Minister of Diaspora, discusses her ministryʼs mission.

European Times: As Ministry of Diaspora is very unique, uncommon for other countries, could you please share the ministry’s main tasks?

Hranush Hakobyan: the ministry of Diaspora imple-ments the government’s policy, which is to strengthen the bonds between armenia and the armenian Diaspora. our major goals are to preserve the armenian identity in the Diaspora, identify the potential of all armenians and fi nd ways to use this potential for the benefi t of the nation, and encourage armenians abroad to invest in armenia and to return. our biggest responsibility is to make sure that all Diaspora armenians’ issues are resolved.

European Times: What are some of the ministry’s recent projects?

Hranush Hakobyan: the ministry of Diaspora and Yerevan state university established the Chair of Diaspora studies at the university and created Diaspora departments within various institutes at the national academy of sciences. a “Diaspora summer school” has been held for the past three years with courses in fi ve key subjects. the ministry also organises con-ferences, has six news portals, has compiled a database and

developed the well-known “ari tun” (“Come home”) ini-tiative on repatriation. We collaborate with a number of local and international organisations, and every year thousands of armenians living abroad participate in our programmes.

“Armenian expatriates are living in more than

100 countries and have quickly adapted to their

chosen countries’ language and culture.”

European Times: What are some current trends in repatriation and emigration?

Hranush Hakobyan: many syrian-armenians have come to armenia because of the war in syria, and we are trying to assist them. We are also seeing more and more Diaspora armenians coming back to live here, and we help them integrate at a rapid pace. to motivate those who wish to repatriate, we distribute fi lms and other media to show examples of armenians who have come home. We have special departments which focus on armenian communities in the near east, europe, america and the Cis countries. the ministry holds a forum with leaders of armenian com-munities once every four years and organises regional con-ferences with armenian communities on a regular basis. in June 2013, nearly 100 armenians from 12 countries partici-pated in the Forum of representatives of armenian Com-munities of europe, part of French-armenian excellence Week held in marseilles, France. this year, the ministry has a programme geared to the australian-armenian community.

European Times: Can you describe the Armenian Diaspora?

Hranush Hakobyan: armenian expatriates are living in more than 100 countries and have quickly adapted to their chosen countries’ language and culture. armenians are law-abiding, hard-working citizens wherever they live, and we welcome Diaspora armenians to return home.

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introduction

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Long history of strong performance in education

Armen Ashotyan, Minister of Education and Science, outlines Armeniaʼs strengths in the education sector and the ministryʼs strategies for future development.

European Times: What are your ministry’s chief goals?

Armen Ashotyan: armenia has a long tradition of being very strong in education and science, even before the soviet era. We have one of the best global rankings in education and are number one among Cis countries in the number of articles per capita published in scientifi c journals. our children achieve the same trends in international math-ematics and science study (timss) scores as norwegian children although norway’s spending per kid are six times bigger than armenia’s. our ministry’s two pillars are to maintain high-quality education as part of our national identity, and to build a modern educational system which prepares our young people for the demands of the 21st century. the armenian education sector has seen constant reforms and this process will continue because education must remain open and fl exible.

European Times: What are some recent develop-ments in Armenia’s education system?

Armen Ashotyan: We have transformed the system from a soviet type to a european one. We have instituted a 12-year general-education programme, which is not very common in the Cis region, and we have revitalised the system through public-private partnerships. Concerning higher education, armenia has been part of the european higher-educa-tion area since 2005 and we are implementing the highest european standards and guidelines. education is a great starting point for the integration of armenia into europe. armenia was chosen in 2012 as a secretary of european higher education area to help coordinate higher education throughout europe, and in 2015 one of the biggest educa-tional summits in the world will be held in Yerevan. armenia was also the fi rst country to implement chess as an obligatory subject in all elementary schools, and we are ready to export

our national brand in this regard. thousands of children are playing chess not only as a game but as a tool for deeper strategic analysis and planning.

European Times: What are some of your goals for the future?

Armen Ashotyan: one of our priorities is to prepare a new generation of teachers who can take advantage of new technologies and combine them with traditional sciences. We want armenians to understand how important it is to have the most qualifi ed and capable teachers in our schools. We are working with many international organisations in education projects. We have student exchanges with eu countries and are part of the eu erasmus plus programme. We are not afraid of challenges.


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armenian embassy in Brussels a Gateway to armenia

The Embassy of the Republic of Armenia in Brussels represents Armenia in relations with the Kingdom of Belgium, the Grand Duchy of Luxembourg and the European Union. The main goal of the Embassy is to protect the interests of Armenia and its nationals in the accredited States as well as to promote friendly relations between Armenia and the concerned States by strengthening and

deepening political, economic and cultural ties.

the mission of armenia to the european union aims to play a role in fostering close ties between the european union and armenia.

the embassy offers consular services. it also provides informa-tion and assistance to the foreign direct investors and buyers of armenian products on all questions related to the doing business with armenia. in addition, the embassy provides services for armenians living in Belgium, most of who are in Brussels, antwerp and Liege. armenians in Belgium play a particularly important role in relations between armenia and Belgium.

armenia established diplomatic relations with Belgium and Luxembourg in 1992.

ambassador avet adonts

the embassy of armenia is headed by h.e. mr. avet adonts, whose title is ambassador extraordinary and pleni-potentiary of the republic of armenia to the Kingdom of Belgium and Grand Duchy of Luxembourg, and head of mission of armenia to the eu.

the ambassador has previously held posts in the ministry of Foreign affairs of armenia and was head of the external relations Department, offi ce of the president of the republic of armenia, for several years. as a member of parliament, he was elected as Chairman of the standing Committee on european integration. he was also a member of armenia’s national security Council before his appointment as an ambassador.

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introduction

Yerevan: Cultural Crossroads and Dynamic modern Business Base

Mayor of Yerevan Taron Margaryan explains what makes Armeniaʼs capital city special.

European Times: Could you describe your duties as mayor?

Taron Margaryan: the mayor defi nes the city’s devel-opment strategies and helps create and support pro-grammes geared to trade, poverty reduction, employment, education, culture, healthcare, and environmental protec-tion, among others. We want to get our citizens involved in our city and to promote a high quality of life. in 2013 we created around 400 new green spaces in Yerevan, among many other projects.

European Times: What are Yerevan’s main economic sectors?

Taron Margaryan: Yerevan is armenia’s economic, educational and cultural hub as well as the country’s most important regional-trade centre. Yerevan’s economy is diverse, from food-processing to iCt. in 2012, Yerevan was the location of around 40.2% of armenia’s industry, 54.5%

of its construction, 84.5% of its retail trade, and 86.8% of its services. our main industrial sectors are food and beverage products (including cognac and beer), textiles (including carpets), chemicals and metallurgy. the main services are iCt, fi nance and insurance, tourism, education, healthcare and cultural services, among others. Yerevan is also the gateway to armenia for international visitors.

European Times: What are your plans for the future?

Taron Margaryan: this year the elder’s Council, the city’s highest administrative organisation, has already adopted a new four-year development programme for priority sectors. We plan to forge more international partnerships and to continue to improve life in the city, including its road infrastructure, waste management and tourism development. We have already worked successfully with the World Bank, the asian Development Bank, the eBrD, the un and others. offering the right conditions for international investors is a priority in our development programme for 2014 to 2017.

European Times: What are the best opportunities for investors?

Taron Margaryan: high-potential sectors include con-struction, tourism (such as the planned new Victory Garden entertainment destination and the noy Land resort zone), the preservation and modernisation of our cultural heritage, new technologies, partnerships with smes, and others. investors can check the municipality’s web site for details.

European Times: What is your personal message about Yerevan?

Taron Margaryan: Yerevan was founded in 782 BC, 29 years before rome, and has a very rich cultural heritage. named a unesCo World Book Capital in 2012, Yerevan attracted over 843,000 tourists last year. We welcome you to visit and do business in our beautiful, fascinating city, the capital of armenia.

© Press Offi ce of Yerevan Municipality


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Government

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Government

type of Government

armenia is a republic which achieved its independence (from the soviet union) in 1991. the country’s fi rst constitution was instituted in 1915 and revised in 1978. Following its independence, armenia wrote a new Constitution which was instituted in 1995 and amended in 2005 and in 2013.

Government organisation

the government of armenia is divided into executive, legis-lative and judicial branches.

Executive branchthe executive branch is led by the president and Chief of state (serzh sargsyan since april 2008) and by the prime minister and head of Government (tigran sargsyan since april 2008), who is seconded by a Vice prime minister. the Council of ministers is appointed by the prime minister. the president is elected by popular vote to serve a fi ve-year term and is eligible for a second term. the prime minister is appointed by the president based on majority or plurality support in parliament; the prime minister and Council of ministers must resign if the national assembly refuses to accept their programme.

stable Democratic GovernmentLegislative branchthe legislative branch is the unicameral national assembly (parliament), or azgayin Zhoghov, with 131 seats. members are elected by popular vote. of the 131 members, 90 are chosen from party lists and 41 are chosen by direct popular vote. all members of the national assembly serve fi ve-year terms.

Judicial branch the judicial branch is headed by the Court of Cassation, which is organised into a criminal chamber and a civil and administrative chamber, each with a court chairman and two judges. Court of Cassation judges are nominated by the Judicial Council, a nine-member body of selected judges and legal scholars. the judges are appointed by the president.the next-most-important court is the Constitutional Court, with nine judges. Four of these judges are appointed by the president and fi ve are elected by parliament. Judges of both courts can serve until retirement at age 65. subordinate courts are two Courts of appeal (one for civil cases and one for criminal and military cases) and an administrative Court.

Key Leaders

armenia’s president, serzh a. sargsyan, was born in 1954 in stepanakert. he attended Yerevan state university and



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sector

served in the soviet armed forces from 1972 to 1974. he began his career as a factory-worker and entered politics in 1979 as the Division head of the stepanakert City Communist party Youth association Committee. elected to the supreme Council of armenia in 1990, he was minister of Defence from 1993 to 1995. From 1995 to 1996, he was the head of the republic of armenia state security Department and, later, was minister of national security. From 1996 to 1999, he served as minister of the interior and of national security. From 1999 to 2000, he was the Chief of staff for the president of armenia, and from 1999 to 2007, he was the secretary of the national security Council. serving again as minister of Defence from 2000 to 2007, he was appointed prime minister in 2007. serzh sargsyan was elected president of the republic of armenia in 2008 and re-elected in 2013.

prime minister tigran sargsyan was born in Kirovakan in 1960. he attended the institute of national economy, planning and economy Department, Yerevan, and obtained an honours diploma and a master’s degree from the Finan-cial-economic institute in Leningrad. he studied at the inter-national institute of Law in Washington, DC, and partici-pated in the “effective Banking management” programme at the World Bank’s institute of economic Development. he served as Chairman of the armenian Bankers’ associa-tion from 1995 to 2008 and was Chairman of the Central Bank from 1998 to 2008. he also served as Chairman of the interstate Bank Council from 2005 to 2007.

elections:

the president is elected by popular vote for a fi ve-year term. the last presidential election was held in February 2013 and the next will be held February 2018. in the 2013 elections,

serzh sargsyan was re-elected to serve a second term with 58.6% of the vote.

Legislative elections were last held in may 2012 and will next be held sometime in the spring of 2017. in the last legislative elections, the rpa (republican) party won 44% of the vote.

Council of ministersminister of territorial administration and Vice prime minister: armen Gevorgyan

minister of agriculture: sergo Karapetyan

minister of Culture: hasmik poghosyan

minister of Defence: seyran ohanyan

minister of Diaspora: hranush hakobyan

minister of economy: Vahram avanesyan

minister of education and science: armen ashotyan

minister of emergency situations: armen Yeritzyan

minister of energy and natural resources: armen movsissyan

minister of Finance: David sargsyan

minister of Foreign affairs: edward nalbandian

minister of healthcare: Derenik Dumanyan

minister of Justice: hrair tovmasyan

minister of Labour and social affairs: artem asatryan

minister of nature protection: aram harutyunyan

minister of sport and Youth affairs: Yuri Vardanyan

minister of transport and Communication: Gagik Beglaryan

minister of urban Development: samvel tadevosyan


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Business & investmentopportunities

• Making Armenia Even More Attractive for Investors

• Strengthening International Ties

• Armenian Development Agency: Your Gateway to Armenia

• SMEs Playing Leading Role in National Economy

• AmCham: Advocate for Business

“Armenia has one of the most open investment regimes among CIS

countries and has bilateral investment, promotion and protection treaties with

more than 40 countries.”Garegin Melkonyan, Deputy Minister of Economy


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making armenia even more attractive for investors

Garegin Melkonyan, Deputy Minister of Economy, discusses the governmentʼs economic-develop-ment priorities.

integrating the republic of armenia into the global economy, creating a proper legal framework and an envi-ronment favourable for foreign trade, enhancing invest-ment attractions and promoting exports are the priori-ties of armenia’s economic policy concerning foreign investors and foreign trade.

armenia is one of only ten countries in the world which enjoy the Generalised system of preferences plus (Gsp+) trade regime with the eu. under the Gsp+, more than 6,000 types of goods of armenian origin can be exported to the eu with zero or reduced customs duties.

armenia also benefits Gsp treatments from the us, Canada, switzerland, norway and Japan, which reduces customs duties on certain goods of armenian origin exported to these countries. in addition, armenia has free-trade agreements with the Cis countries which grant duty-free access to a market of 270 million people.

armenia has one of the most open investment regimes among Cis countries and has bilateral investment, promotion and protection treaties with more than 40 countries. according to armenia’s foreign-investments law, in the event of any changes in legislation, whatever legislation regarding foreign investments which was in place at the time of a foreign investment will continue to apply for five years, if requested by the foreign investor.

armenia has also simplified procedures for doing business and offers equal treatment for local and foreign

investors, free expatriation of capital, no limitation on foreign ownership, no export duties, a highly skilled and inexpensive labour force, and many other attrac-tions. armenia was ranked 37th among 189 countries in the World Bank’s “Doing Business” report for 2014 and was ranked the best business environment of all Cis countries. armenia is also ranked 41st among 187 countries in the heritage Foundation’s 2014 index of economic Freedom.

recent programmes to enhance the investment environ-ment and to promote export include the creation of a universal credit organisation providing preferential loans to smes, the establishment of the export insurance agency, and the development of a free economic zone (FeZ) geared to the production and export of innova-tive technologies in the fields of electronics, precision engineering, pharmaceuticals and biotechnologies, and iCt. Companies operating in the FeZ are exempt from Vat, profit taxes, property taxes and customs duties, and they can count on one-stop-shop government services. armenia has also implemented an industrial strategy which aims to develop 11 strategic sectors with particu-larly strong export potential.

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Business & investment opportunities

strengthening international ties

Shavarsh Kocharyan, Deputy Minister of Foreign Aff airs, outlines Armeniaʼs approach to foreign

relations.

European Times: Can you discuss some recent developments in Armenia’s foreign policy?

Shavarsh Kocharyan: over the past fi ve years we have improved our international relationships, especially with russia and other Cis countries but also with europe. We are working closely with iran and have attempted to normalise relations with turkey with no pre-conditions, but unfortu-nately we are at a point where all we can do is wait on turkey’s leaders. We have four neighbours but only two gateways to the world, through iran and Georgia, since our borders with turkey and azerbaijan are closed. around 80% of our external trade goes through Georgia and the rest through iran. We are satisfi ed that the White house understands our working relationship with iran and that russia under-stands our relationship with Georgia. it is also important for armenia to develop its relationship with the eu. We want to maximise our cooperation with eu companies and develop a free-trade agreement with the eu. We are actively cooperat-ing with nato and it has served to help armenia in many ways.

European Times: What is Armenia doing to promote a free-trade agreement with the EU?

Shavarsh Kocharyan: the negotiations are close to being fi nalised. We are just waiting to put the regulations

into practice. We are attempting to enhance bilateral agree-ments with individual eu countries. We look to eastern eu countries as an example in dealing with the eu.

European Times: What would you like potential international investors to know about Armenia?

Shavarsh Kocharyan: armenia has managed to implement a very balanced political policy and is open to any type of international partnership. the Diaspora has been key in promoting armenia, as there are more armenians outside than within the country. For a long time we have been unable to have embassies in asia, southeast asia, africa and Latin america. We want to change that, as well as increase our presence in europe. We want to show everyone that armenia is an open country, ready to cooperate with others.

European Times: What is your personal message to our readers?

Shavarsh Kocharyan: We were the fi rst nation to adopt Christianity and we have instilled those values deep within our culture. When speaking about harmonising and deepening relations with others, people should remember that throughout our diffi cult history, armenia has always been peace-loving and welcoming.


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armenian Development agency: Your Gateway to armenia

Robert Harutyunyan, Director of the Armenian Development Agency (ADA), discusses Armeniaʼs strategies for achieving sustainable development.

European Times: What are the tasks of the ADA?

Robert Harutyunyan: the major tasks of the aDa are investments gen-eration and exports promotion based on armenia’s government’s economic-development strategies. other functions of the agency are: allocating funding for public-private partnerships, assisting improvement of the business climate and opportunities for local companies and serving as a partner for foreign investors and local producers. armenian Development agency is your gateway to armenia.

European Times: Why should international investors choose Armenia?

Robert Harutyunyan: there are several strong reasons, but i would like to bring your attention to the existence of a highly skilled, mostly english-speaking, cost-effective labour force with major growth potential, especially in high-tech industries and iCt. another reason is the Fta regime with Cis countries, which provides tariff free access to 250 million consumers’ market.

moreover, armenia offers a very liberal business environment with simplifi ed taxation, customs and licensing and there are no restrictions on foreign capital and/or employees. armenia’s

strategic location is another advantage. We are currently building armenia’s road of the north-south Corridor which will connect europe with asia.

European Times: What is the relationship between Armenia and the EU?

Robert Harutyunyan: the eu is armenia’s top trade and investment partner since the period of independ-ence. it is interesting to note that in 2013 the share of armenian export to eu countries was 33.4% and import was 26%. this market is one of our targeted markets for local producers as well as for the investment genera-tion. our government from one side and the local producers from the other side are working hard to meet eu standards, to bring in eu technologies and to strengthen our relations with eu markets as it is the base for effi cient economic development within the eu organisation or as a partner country. surely, achieving these goals will require eu funding and the inputs of eu experts. We recently signed a memoran-dum with an italian company to bring italian technologies here to armenia. What we are missing is long-term inex-pensive funding.

European Times: What progress is being made in developing the Armenian economy?

Robert Harutyunyan: armenia’s current industrial policy aims to boost GDp and diversify the economy. although it is still dependent on the production and exports of a few products, there are strong growth ten-dencies in the sectors of it, wine and brandy production, pharmaceuticals, precision engineering, and tourism and hotel construction. other sectors that are expanding include textiles, watch-making and agriculture. the government’s decision to support public-private partnerships has also contributed to the country’s growth. armenia is a very result-oriented place that is definitely taking the right path.

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smes playing Leading role in national economy

Varazdat Karapetyan, Executive Director of the Small and Medium Entrepreneurship Development National Centre of Armenia (SMEDNC), discusses the key role small and medium-sized enterprises play in Armeniaʼs economy.

European Times: What are SMEDNC’s tasks?

Varazdat Karapetyan: in 2011, armenia launched a national strategy to support the development of small and medium-sized enterprises (smes) and smeDnC leads the way in implement-ing this strategy. it includes providing information and educational support to entrepreneurs and helping them with fi nancing, accessing global markets, implementing new technologies and franchising. We operate local branches throughout the country.

European Times: What are some of your recent projects?

Varazdat Karapetyan: We are working to establish a mentorship institute, which we are now piloting in three regions.

it is open to any qualifi ed individuals who will take part in a three-month programme comprising business planning and local economic policies. once trained, these individuals will provide basic business services in armenia’s regions. in 2013 we launched the programs “partnership for rural prosperity”, “Youth entrepreneur-ship development”, “Woman start-up business promotion”, and “one Village one product” project in armenia.

European Times: In which sectors are you most active?

Varazdat Karapetyan: We are currently directly involved in the pro-duction of dried fruits and wines and in bed-and-breakfast tourism. We have a business model using a successful example which we can transition to other sectors. We now have 50 thriving

dried-fruit producers and we are helping them negotiate with russian wholesal-ers. We have also developed 32 green-houses for vegetables production.

European Times: What are the top export markets for your SMEs?

Varazdat Karapetyan: We work mainly with russia, but we also aim to boost armenia’s presence in eu markets. armenia has the oldest winery in the world, dating back 6,000 years, and grows many native grapes for wines. We are currently connecting our small wine producers to the quality leaders in the world. the competitive advantage of armenia’s wine and fruit is that they are grown organically and are of very high quality. We welcome the chance to work with partners in the eu, where we think armenia’s products have an excellent future. smeDnC can serve as the liaison between eu companies and producers in armenia.

European Times: Are you already involved in any international partnerships?

Varazdat Karapetyan: We are working with usaiD, the Japanese international agency, the un Devel-opment programme and asian Devel-opment Bank, from which we have received a loan to support woman entre-preneurship development. We are eager to form more partnerships, especially ones which can bring new technolo-gies to armenia. armenia offers skilled entrepreneurs, high-quality products and great potential.



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Construction-sector Leader aiming to expand Locally and Globally

Samvel H. Beglaryan, Council Chairman

shen holding is currently engaged in mining, manufacturing and importing of construction materials, construc-tion and interior fi nishing works and organizes selling of goods via a big wholesale and retail chain through-out armenia and Georgia. in the fi eld from 1995, the company enjoys a well-established brand name and the trust of suppliers and consumers, growing market share and high growth potential. Chairman samvel h. Beglaryan explains, “the eBrD bought out our

Shen Holding2/2 Shirak Street

Yerevan 0043 Tel: +374 10 460 101

[email protected]

Shen Holding is a leader in Armeniaʼs construction materials manufacturing sector and the only enterprise in its field which offers a comprehensive portfolio of goods and services.

shares and fi nanced our factory to produce concrete blocks in 2005. it is the biggest facility of its kind in the region. We re-acquired our shares in 2008. now we also have our own mine which we exploit for raw materials for the construction sector, meeting the highest environmental standards. With this mine, we will be able to corner more of the armenian market.” the company now has 500 employees, has expanded to Georgia and is planning to enter the uae market.

shen holding prides itself on its steady growth, high standards and transparency. samvel h. Beglaryan says, “the eBrD and BstDB may be our major share-holders in the near future and we must meet international standards. in addition, we are going to be rated by Fitch ratings, which will be a guarantee of our transpar-ency and a prove that we adhere to our corporate governance code. We recently started issuing bonds for the second time in our history.” shen holding achieved €11.1 million in turnover in the current fi nancial year and expects an increase next year. now shen holding is seeking long-term partners to help it meet its ambitious goals. samvel h. Beglaryan explains, “Local banks provide only short-term loans, so we are interested in a long-term fi nancial partner who can respond to our general needs for growth and stability.”

samvel h. Beglaryan welcomes contacts from international investors. Defi ning shen holding’s investment appeal, he says, “We are the largest and best-known company operating within our sector, and we adhere to the highest environmental standards to produce the most eco-friendly products. Whenever we conduct training sessions, we invite european companies, mainly from Germany.” Concerning armenia as an investment target, he adds, “take a risk and invest in armenia. You will defi nitely benefi t if you do so.”

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the european times

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Foundation spearheading ambitious Development projects

European Times: What is the history of the foundation?

Arman Khachaturyan: the foun-dation is an institutional innovation in armenia in terms of the public-private partnership model. Back in 2008, prominent businessmen in armenia approached the government with a request to establish a foundation, in cooperation with public-sector rep-resentatives, which could become an engine to drive economic development in armenia’s key sectors. the founda-tion is chaired by the prime minister, and board members from the public sector are the ministers of economy, Finance and Foreign affairs as well as the Chairman of the Central Bank. Board members from the private sector include executives of armenian origin from russia, europe and the us.

European Times: What are your main tasks and responsibilities as CEO?

Arman Khachaturyan: my whole career path has been about designing and implementing change in public, private and public-private companies like this foundation. here we work with a very broad range of stakeholders (public and private entities) and bring them together in developing projects aiming at strengthening the economy, which is a very challenging task.

European Times: Which projects would you like to highlight?

Arman Khachaturyan: We are working on a very extensive project called the armenian Centre of excel-lence in oncology (aCeo). our goal is to establish a medical facility in armenia which will provide state-of-the-art diag-nostics and treatments. the government took on a third of the costs and private investors contributed to fi nancing the remainder. Construction on some of the departments of this new facility will be fi nished by the end of this year. the con-ceptualisation and implementation of this project have been rather diffi cult because nothing like this has ever been done in armenia. to cope with the challenges, we are working with foreign consultants and suppliers, who are ensuring that we comply with all technical and security regulations. We aim for this institution to provide the best healthcare in the country, as well as contribute to economic stability. the aCeo will create jobs, increase r&D activities, and build the capacity of medical universities. this will in turn promote medical tourism in armenia as well as attract experts to the only state-of-the-art medical facility in the region. Within two years the centre will be 100% operational.

another of our areas of focus is the tourism sector, where we are involved in both policy formation and projects. We represent armenia in interna-tional tourism shows and promote the armenian brand. We are also focussing on a key project, the develop-ment of the historic tatev monastery in southern armenia as a tourism site. the project involves upgrading the monastic complex, creating tourism facilities and services, and promoting community

Dr. Arman Khachaturyan, CEO of the National Competitiveness Foundation of Armenia, discusses the foundationʼs projects and goals.

development in this historically rich part of the country. our goal is to improve quality of life in the villages surround-ing the monastery, create more income opportunities so that the community can benefi t from tourism, and in turn contribute to local development.

We are also in the process of launching a very large project, the opening of armenian information offi ces in major capitals of the world. these offi ces will serve as a bridge between armenia and the countries where they are located, as well as a bridge between armenia and the armenian Diaspora. much more than tourism offi ces, these centres will also promote trade, investments, exports and imports.

European Times: What are the biggest challenges facing the National Competitiveness Foun-dation of Armenia today?

Arman Khachaturyan: Consensus, credibility and commitment: the three C’s. We need to build a consensus among all of our stakeholders to be able to move forward with our projects. in order to build credibility you need to know the key to success. that does not always mean challenging the status quo, but being able to show how future possibilities can benefi t the work we do. thirdly you have to build the commit-ment of all stakeholders for the whole process of implementation by having a healthy communication fl ow which engages everyone in the process.

European Times: What is your personal message to our readers?

Arman Khachaturyan: they are all welcome in armenia.


201

amCham: advocate for BusinessThe American Chamber of Commerce in Armenia (AmCham), established in 2000, plays a major role in supporting the countryʼs private sector and advocating for a better business environment in Armenia. AmCham provides a wide range of services for its member companies, including essential information about the Armenian business climate and investment opportunities.

Diana Gaziyan, Executive Director of American Chamber of Commerce in Armenia

amCham also regularly organises networking events featuring guest speakers from the government, international organisations and leading businesses. in addition, amCham publishes the only eng-lish-language business magazine in armenia.

ranked the leading business asso-ciation in the country, amCham armenia has around 100 members representing various sectors of economy. through advocacy efforts

aimed at such areas as tax legislation and customs admin-istration, amCham represents its members’ interests to the armenian and u.s. governments, international organi-sations and the broader business community. amCham partners with other amChams in the region on specifi c initiatives. amCham is a member of the u.s. Chamber of Commerce and the european Council of americans Chambers of Commerce. amCham’s priorities in armenia include lobbying for better business laws and regulations; serving as a liaison between the public and private sectors; developing position papers on taxation, fi nancial regulations and other relevant issues; working with the us embassy, usaiD, and relevant offi cials visiting armenia; providing information sharing and net-working platform for its members and assisting them with specifi c concerns, as well as organizing round table discus-sions, seminars and conferences for its members and repre-sentatives of the wider business community.

Defending interests of Local private sector

Arsen Ghazaryan, President of the Union of Manufactures and Businessmen, discusses recent developments in Armeniaʼs private sector.

European Times: What are the Union’s main goals?

Arsen Ghazaryan: our main task is to protect the interests of our members, mainly medium-sized and large companies operating in armenia. We examine drafts of new legislation and represent our members in discussions with the government – we give our members a voice. We also help our member companies to fi nd foreign partners.

European Times: What are some of the Union’s recent accomplishments?

Arsen Ghazaryan: the fact that we have come together to protect our rights makes us very proud. our goal was to create a contem-porary image of armenian businessmen. the union is intensively involved in projects aimed at creating a more business-friendly envi-ronment in armenia. We also focus on boosting armenia’s regional trade and business ties, particularly with turkey, and we strongly support the normalisation of relations between armenia and turkey. We are confi dent that economic cooperation is a core factor for creating dialogue, building confi dence, and achieving normalisa-tion and reconciliation. in 1997, the union co-founded the turkish-armenian Business Development Council (taBDC). From 2010 to 2012, the union implemented the “support to armenia-turkey normalisation” (satr) project, which lead to increased bilateral trade and cross-border dialogue.

European Times: What are your future goals?

Arsen Ghazaryan: our priorities are to continue to work with the government to develop a more competitive and fair private sector; to help our members boost their own competi-tiveness, especially in foreign markets; and to promote corporate social responsibility. We want to make sure that our employees have decent salaries and we want to fund social programmes, specifi cally health and education initiatives.

European Times: What is your personal message to international readers?

Arsen Ghazaryan: although armenia is a small market, it offers investors a very promising future. armenia does not need help. armenia needs valuable partnerships and european investors.

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Finance

• Finance Minister Outlines Government’s Priorities

• World Bank Has Made Long-Term Commitment to Armenia

• USAID Enthusiastic about Armenia’s Future

“Over the next few years the government wants to develop investment

funds and more competition in the banking sector.”

David Sargsyan, Minister of Finance

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Finance Minister Outlines Government’s Priorities

European Times: What are your priorities for the fi nancial sector?

David Sargsyan: The government is focusing on ensuring high-quality standards of doing business, including promoting corporate responsibility in the fi nancial-services sector. We have also steadily increased the percentage of banking assets to GDP from 11% in 2003 to 57% today, and at the same time the percentage of loans to GDP from around 13% to 37%. The RA government has launched an insurance sector and is currently developing a mandatory pension fund through a 5% employee contribution which the government will match. This began on January 1, 2014.

European Times: How has the funding Armenia received from the World Bank been utilised?

David Sargsyan: The funds have been dispersed in a clear three-pillar strategy. The government has provided funding for small and medium-sized businesses; increased public spending on infrastructure; and increased government spending on social programmes. Concerning infrastructure alone, we have built eight times as many roads as before.

European Times: What are the main challenges the fi nancial sector faces today?

David Sargsyan: There are two types, external and internal. Internally, challenges range from creating new jobs to establishing an export-driven economy. It is also needed to transform our public sector to make it more effi cient. Externally, we face the same challenges as other nations, including the need for more stability in the region.

European Times: Why should international investors target Armenia?

David Sargsyan: Armenia has already received signifi -cant FDI, including public-private partnerships. We are not directly investing in infrastructure but all taxes on infrastruc-ture projects are being eliminated. We are also looking to form more PPPs. Armenia has free-trade agreements with Russia, the EU, the US, and open borders with three major markets. Armenia has a very liberal banking system with a free exchange rate and no price controls. In addition, it is easy to start a business here and there is a lot less bureaucracy than people think. International investors in our fi nancial sector include HSBC, Crédit Agricole, Biblos Bank and many investors from Russia.

European Times: What are your main goals for the fi nancial sector?

David Sargsyan: We aim to maintain a sound macroeco-nomic policy and a low budget defi cit, which will help ensure fi nancial-sector stability. Over the next few years the govern-ment wants to develop investment funds and more competi-tion in the banking sector. Investors should know that they will feel at home here in Armenia.

David Sargsyan, Minister of Finance discusses recent developements in the fi nancial sector.

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Finance

World Bank Has Made Long-Term Commitment to Armenia

Jean-Michel Happi, World Bank Director in Armenia, discusses the Bankʼs projects.

European Times: What are the World Bank’s main activities in Armenia?

Jean-Michel Happi: We have accompanied Armenia on its transition from a low-income to a middle-income country. Our previous partnership strategy, launched in 2009, aimed at helping Armenia deal with the economic crisis and become more competitive. We provided support to institutions which focus on reducing poverty across the country and currently, within the new country partnership strategy, we intend to work with the counterpart in creating job opportunities. One of the pillars of the new strategy is to support reforms that will lead to further economic growth. This is a work-in-progress programme, but there is very tangible advancement being made. We have helped to build nine rural hospitals, done substantial work in the

education sector in partnership with the government, helped to encourage investment in energy projects, and provided strong support for the private sector, particularly SMEs.

European Times: Why should international investors target Armenia?

Jean-Michel Happi: Armenia offers a number of dis-tinctive advantages and the challenge is to maximize them. Armenia has very talented youth and an educational system that is being revamped to prepare young people for a knowl-edge-based economy. Many international investors are looking into the ICT sector thanks to Armenia’s high-quality human resources. Manufacturing, mining and pharmaceuti-cals are other promising sectors. Parallel to our lending activ-ities, the World Bank helps the government identify impedi-ments to growth and investments, and we play a key role in supporting policy reforms.

European Times: What are the main challenges for investors in Armenia?

Jean-Michel Happi: Once the limited connectivity of the country is solved, a new wave of opportunity will be unlocked in Armenia. Domestically, Armenia needs to establish a level playing fi eld for foreign and local investors, and to provide more support for SMEs. The government also needs to launch more aggressive reforms to make Armenia more competitive. High costs of travelling here by air are another challenge, and improving the governance and institutional capacity remains a high priority to be addressed without delay. Armenia is also quite sensitive to the fl uctuation in the price of gas from Russia, so it is vital for Armenia to improve its energy genera-tion, supply, security and effi cient consumption of it.

European Times: What is your personal message to investors?

Jean-Michel Happi: Armenia now has one-stop-shop services for investors and is steadily improving its business environment. Armenia wants to become a knowledge-based economy. I see the future of Armenia depending on its human capital, and that is worth investing in.


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EBRD Bond Marks Milestone for Capital Markets Development in Armenia

Like other former Soviet socialist republics, Armenia has been striving to assure its people decent livelihoods and a healthy environment by rebuilding and further developing its economy since the fall of the Berlin Wall and subsequent collapse of the USSR.

Mark Davis, Head of the EBRD Yerevan Offi ce

Development of open, accessible, and transparent capital markets is seen as vital to the functioning of a modern economy and society. The EBRD (European Bank for Recon-struction and Development) has been playing a leading role in this regard, working with the Armenian government, the Central Bank, domestic and international companies, and other multilateral development agencies to foster develop-ment of a modern banking and fi nancial systems infrastruc-ture that includes centralised national exchanges that enable businesses to raise capital, and investors to invest in equity, debt and other types of fi nancial instruments.

On Jan. 31, EBRD and Armenia marked a milestone in this regard with the issuance of the EBRD’s fi rst-ever bond issue denominated in Armenian drams. Issuing a one-year note, the EBRD raised a total of AMD2 billion (US$5 million) in an auction conducted on the NASDAQ OMX Armenia exchange in Yerevan.

The EBRD’s note issuance was groundbreaking in other ways. It not only marks the EBRD’s fi rst-ever issuance in Armenian drams, but the fi rst carried out via public auction by a foreign borrower or international fi nancial institution. It was also the fi rst fl oating rate note (FRN) issued on the local market.

“This is a very signifi cant step for the Armenian capital market and opens the way for further capital raising in Armenia by those seeking to on-lend AMD to the real economy, thereby ensuring a better fi t for borrowers who want to avoid foreign currency risk,” Mark Davis, head of the EBRD Yerevan Offi ce, was quoted in a press release. “As a fl oating rate note, it also provides a useful liquidity management tool for banks, which the application to the Central Bank of Armenia for repo-eligibility should further enhance,” Davis added.

A week after its debt issuance, the EBRD and NASDAQ OMX Armenia, with the support of the Central Bank of Armenia, hosted a conference at the Marriott Hotel in Tsakhkadzor to discuss the challenges and opportunities associated with the development of robust capital markets in the country.

“The EBRD is a key investor in Armenia’s private sector and an advocate for further development of the local currency and capital markets,” Mark Davis in front of more than 160 participants attending. “Capital markets promote economic growth and welfare generation by mobilising fi nancial resources and facilitating their effi cient allocation. The success of Armenia’s mandatory pension reform and the creation of liquid capital markets go hand in hand. Both will contribute to increasing Armenia’s national savings which translates to investment in Armenia’s future.“

“Investors stand to benefi t from a more robust market by having a wider range of instruments in which to invest and hedge, while issuers will have access to a broader selection of tools to fi nance their investment needs,” Mark Davis emphasised.

Issuance of the one-year AMD-denominated FRN is the latest development in the EBRD’s Local Currency and Capital Markets Development Initiative. Launched in May 2010 in the wake of the global recession and fi nancial crisis, the initiative is meant to lessen developing nations’ reliance on foreign capital and foreign exchange fl uctuations.

Borrowers, as well as fi nancial institutions in many develop-ing countries, were squeezed and lost out in signifi cant part due to having borrowed excessively and taking on debt that ultimately had to be repaid in “hard” foreign currencies, such as the US dollar and euro, which had strengthened against their domestic currencies during the last fi nancial crisis.

THE EUROPEAN TIMES

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Finance

MASTER REGIOTHE EUROPEAN TIMES

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USAID Enthusiastic about Armenia’s Future

Karen Hilliard, the USAIDʼs Director in Armenia, talks about her agencyʼs priorities for the country.

© Mkhitar Khachatryan

European Times: What are the USAID’s main activities in Armenia?

Karen Hilliard: The USAID has been active in Armenia since the 1988 earth-quake, when we offered humanitarian aid and then basic life services. The US gov-ernment has provided over €1.4 billion in assistance to Armenia. We are about to launch a new fi ve-year strategy here which focuses on economic development, democracy and good governance. This programme includes a social aspect. Our other focus in Armenia today is the fi nal phase of our health-assistance programme.

We are interested in fostering economic-policy reform in order to increase the com-petitiveness of the Armenian economy globally. The idea is that by reforming key policies, we will be able to help Armenia attract FDI. We have indentifi ed four growth sectors which we are supporting. They are ICT and engineering, agribusi-ness (which includes implementing inter-national food-safety standards), tourism and pharmaceuticals. We are also support-ing development outside the capital.

European Times: What are some of the USAID’s major projects in Armenia?

Karen Hilliard: Our fl agship programme in Armenia is a fi ve-year, €12.9-million effort to promote economic development and market competitiveness. It has two purposes: one is to remove any policy and regu-latory obstacles to business growth, and the other is to increase the com-petitiveness of the four key sectors we have targeted. This programme also strives to enhance human-resources development. We want education in Armenia to match the demands of the market. We also have a new programme to foster higher-education partnerships and we will establish ties with four US universities which will work with the government and the private sector in Armenia. As SMEs are the drivers of the Armenian economy, we are aiming to provide better access to credit for them. We also support reforms in tax collection, customs administration and others. We work with all other international institutions here in Armenia.

European Times: What is your personal message to investors?

Karen Hilliard: While economic reform is progressing quickly, demo-cratic reform is moving more slowly, and new laws need to be implemented more effi ciently. We are working very closely with the Armenian govern-ment, and the USAID is an enthu-siastic partner for Armenia. There are very promising signs of economic development here, and for investors, Armenia is defi nitely a country to keep an eye on.


261

A Long-Term Partner in Armenia

The Asian Development Bank (ADB) has been a key partner in supporting Armeniaʼs development agenda, economic growth, and reform programmes since 2005. ADBʼs operations in Armenia are aligned with the governmentʼs priorities and ADBʼs strengths.

Since its founding in 1966, ADB has been dedicated to improving people’s lives in Asia and the Pacifi c. The main devices for ADB’s assistance are loans, grants, policy dialogue, technical assistance, and equity investments. During its part-nership with Armenia, ADB has been providing loans and technical assistance to public and private sectors for the implementation of large-scale development projects in the country. ADB’s assistance in Armenia has been focussed on inclusive economic growth, infrastructure improvements (particularly of roads and water-supply systems), upgrading secondary towns, strengthening energy sustainability in the country, and fi nancing for small and medium-sized enterprises.

Some of ADB’s key projects in Armenia are the North-South Road Corridor Investment Programme; Sustainable Urban Development Investment Program (SUDIP); Water Supply and Sanitation Sector Project; Solid Waste Management Improvement Investment Programme; and the Women’s Entrepreneurship Support Sector Development Programme. There are also special programmes implemented through private sector fi nancing such as modernisation of the Sevan Hrazdan Cascade hydropower system, and the Zvartnots Airport Expansion Project.

Technical assistance to government

ADB has made a long-term commitment in Armenia and aims to help the government fi ne-tune its economic policy for each identifi ed strategic sector. One of ADB’s goals in Armenia is to support the government’s “Armenia Devel-opment Strategy 2025”. The strategy focuses on growth of employment, development of human capital, improve-ment of the social protection system, and institutional

modernisation of public administration and governance. ADB’s 2014-2016 country operations business plan for Armenia supports inclusive and environmentally sustainable growth and regional integration, as well as the government’s objective of increasing employment.

North-South Road Corridor

One of ADB’s key projects in Armenia, the North-South Road Corridor Investment Programme, is designed to improve the Agarak-Kapan-Yerevan-Bavra road that crosses Armenia from south to north. This vital economic artery links with Georgia’s east-west highway that leads to Poti and Batumi on the Black Sea. The route plays a pivotal role in landlocked Armenia’s economy since it provides the shortest access to seaports and connections to Europe, the Russian Federation, and Turkey. This is one of the major investment programmes in Armenia in scope and impact.

International investment forum

ADB is currently providing technical assistance for promoting investment in Armenia. It aims to fi nance upgrading of mechanisms fostering investments in the country through promotion, preparation of effi cient investment proposals, and targeted marketing and matchmaking activities. The project includes an international investment forum to take place in 2015. The forum will focus on strategic industrial sectors in Armenia that could benefi t from foreign invest-ment. The main target audience for the forum is multina-tional manufacturing companies that are looking to invest in Armenia’s strategic sectors or intending to expand their export potential in the region.

THE EUROPEAN TIMES

27

Finance

Energy & NaturalResources

• Working Towards Increased Energy Independence

“We welcome visits from potential partners and investors. They might

like to see our underground hydropower plant, which is one of our country’s

most interesting developments.”Alan Galstyan, Deputy Minister of Energy


28


Working Towards Increased Energy Independence

Alan Galstyan, Deputy Minister of Energy, discusses Armeniaʼs goals for the energy sector.

Yerevan Combined Cycle Power Plant

European Times: What are the Ministry of Energy’s main tasks?

Alan Galstyan: We oversee the energy sector, which includes natural gas, elec-tricity and various natural resources as well as the metals, mining and chemicals industries. We are responsible for attracting investments in the energy sector and handling the legal aspects of establishing companies.

European Times: What progress is being made in the chemicals industry?

Alan Galstyan: Our chemicals industry, which dates back to Soviet times, has been growing rapidly and will eventually be able to compete on an international scale. Small and medium-sized enterprises are beginning to thrive

in this sector, and we are currently rebuilding two large plants, Nairi and Vanazor. We want to link the chemicals industry with the production of raw materials as well.

European Times: What about other resources?

Alan Galstyan: Armenia has a wide variety of mineral resources which include iron, copper, molybdenum, perlite, gold and silver, to name just a few. Minerals make up a large part of Armenia’s exports. We welcome inter-national investors who can help us implement new technologies in order to maximise our mining effi ciency and capacity. We recently enacted new mining codes to make mining more environmentally friendly.

European Times: What progress is being made in developing renewable energies?

Alan Galstyan: We have been able to increase our electricity produc-tion six-fold, in large part thanks to EU funds for renewable energy. The German government has helped us develop our hydropower resources, and

we are aggressively improving the effi -ciency of all our energy production. We have also launched pilot projects for solar energy. By 2030 we want to have more than 30% of our energy coming from renewable resources.

European Times: What about nuclear energy?

Alan Galstyan: Nuclear energy is a top priority. We closed our nuclear-power plant when the Soviet Union collapsed and now we must import gas, which is diffi cult and expensive. We will soon re-commission our nuclear-power plant to help us become more energy-independent.

European Times: Are you seeking international partnerships?

Alan Galstyan: It is my vision for Armenia to be one of the cleanest energy producers in the world by 2025, and to reach this goal we need new international partnerships which will help us implement new technologies. We welcome visits from potential partners and investors. They might like to see our underground hydro-power plant, which is one of our country’s most interesting developments.

THE EUROPEAN TIMES

29

Energy & Natural Resources

Mining-Sector Leader Has Strong Track Record in Europe

Pure Iron Plant demonstrates the potential of Armeniaʼs mining sector. Founded two decades ago, the company has developed a strong presence in European and global markets thanks to its reliable services and high-quality products. Chairman of the Board Henik Karapetyan explains, “We mainly work with one factory producing molybdenum, which exports all its production to Europe. We partner with the German leader Cronimet, which sells our products all over the world.” Pure Iron Plant is a joint-stock enterprise

in which Cronimet has a 51% stake and three European companies also hold shares.

Henik Karapetyan points out that Pure Iron Plant upholds international standards of quality, employee safety and environmental protection, and strives to achieve signifi -cant revenues for its shareholders as well as benefi ts for the Armenian economy. He adds, “We offer a bigger variety of products than our competitor here in Armenia and we have proven ourselves to be more profi table. We fully comply with all the government’s regulations concerning the environment and have invested in improvements to make sure that we are in accordance with all laws. In addition, we always maintain a high level of safety and give our employees regular health checkups.”

Successful cooperation with international partners

Pure Iron Plant has a solid track record not only as a reliable source of international-standard products but also as a desirable partner in Armenia for foreign investors. Henik Karapetyan says, “Our company has been working with Europeans for over 19 years and has never had a problem with any of our European customers and partners. We have also grown tremendously since our beginnings to reach the level where we now are.”

Through its effi ciency, reliability and quality products, Pure Iron Plant is playing a signifi cant role in improving Armenia’s international image. Henik Karapetyan points out that the country’s reputation for corruption is exaggerated and that leading Armenian companies like Pure Iron Plant have proven themselves capable of meeting EU and international performance standards.

Henik Karapetyan says, “When we began working with Cronimet, they knew nothing about Armenia except jokes, but now the president of Cronimet promotes Pure Iron Plant and Armenia in Germany. In addition, our good work for other European partners has helped them see the potential in our country.” Pure Iron Plant will continue to contribute to Armenia’s ongoing development and welcomes the chance to work with partners in Europe and beyond.

Pure Iron Plant75 Artsakhi Ave. 0053 Yerevan

Tel: +374 10 47 42 [email protected]

www.pureironplant.com


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Finance

IT & Telecom

• Foundation Driving the Growth of High-Potential IT Sector

“Armenia is a good investment destination for foreign companies which are looking for innovative solutions in

IT and Complex Engineering. ”Bagrat Yengibaryan,

Director Enterprise Incubator Foundation

THE EUROPEAN TIMES

31

IT & Telecom

1

ICT: Key Driver of the National Economy

Armenia was the Soviet Unionʼs “Silicon Valley”, its main hub for software development, industrial computing, electronics, and the production of semiconductors.

Today, Armenia is continuing to build on these strong foun-dations to develop a globally competitive ICT industry which achieved a 27% compound annual growth rate between 1998 and 2011. The Armenian ICT sector has attracted signifi cant investment, including Synopsys, National Instruments and D-Link International, among others.

Armenia has positioned itself as a regional ICT leader thanks to its proven expertise, potential for technology development, highly productive and skilled labour, and fast-growing ICT enterprises with great added value. Armenian ICT companies specialise in embedded software development and semiconductor design, cus-tomised software and outsourcing, fi nancial software, multimedia, web design, information systems, and system integration.

As of 2012, Armenia had some 360 ICT companies achieving average annual growth of 23%. Around 90% of these companies are in Yerevan, but technology advancement and ICT training centres in the Shirak and Lori regions are expected to stimulate ICT-sector growth outside the capital. In October 2013, the Yerevan Computer Research and Develop-ment Institute hosted the Black Sea Economic Cooperation Organisation ICT conference, highlighting Armenia’s leading role in regional ICT development.

Unicomp37 Charentsi Str., Yerevan

Tel: +374 10 58 11 [email protected] - www.unicomp.am

ICT Company at the Cutting Edge

Unicomp, founded in 1988, has grown to become a leader in Armeniaʼs ICT sector. The dynamic enterprise has achieved stable growth and aims to expand into new markets.

CEO Armen Baldryan says, “I chose IT because of its rapid development. We are experiencing something unpar-alleled in the world, and are looking to take advantage of that. We provide innovative business solutions for small and large companies, and we are looking to gain more clients worldwide,” Armen Baldryan emphasises.

“As it pursues its expansion plans, Unicomp is focussing on cloud computing, which has no national boundaries. The company already has customers in telecom, fi nancial services, education, healthcare and public sectors. To remain at the cutting edge of its fi eld, Unicomp has its own research and development department. Armen Baldryan explains, “We put together fully comprehensive business solutions, including hardware, software and ICT. We develop new software tech-nologies and offer our own IT integration services.”

Unicomp has positioned itself to keep pace with the rapidly developing global ICT industry. Armen Baldryan points out, “The way in which the world communicates will change dra-matically, and Unicomp will be part of that development.” Noting that he is open to productive international partnerships, he concludes, “Let’s work together to make the world better.”


32

Foundation Driving the Growth of High-Potential IT Sector

Bagrat Yengibaryan, Director, Enterprise Incubator Foundation, discusses the Foundationʼs eff orts to support the IT sector of Armenia.

European Times: What role does the foundation play in Armenia’s economy?

Bagrat Yengibaryan: The Enterprise Incubator Foun-dation, launched by the World Bank and the govern-ment of Armenia in 2002, is not only an incubator but also an IT development agency. We assist IT companies with their business development, and we help companies expand their operations outside of Armenia and increase their productivity. The Foundation is also intensively sup-porting start-up companies, which we think are vital to the development of the technological sector in Armenia. We help them with investment promotion and equity

fi nancing. We are actively involved in IT education and provide a large spectrum of services to IT companies. EIF also works with multinationals in order to attract FDI. Two examples of our partnerships are Microsoft’s Innova-tion Centre in Armenia and mLab, the Mobile Applica-tion Lab for the ECA region.

European Times: What are some key projects you would like to highlight?

Bagrat Yengibaryan: One such key project is the Armenian National Engineering Laboratory which is not only supporting the education system in Armenia but is also an incubation and acceleration environ-ment. Students from the bachelor level will be able to get the practical skills they need to work on specific R&D projects and eventually put forth proposals for their own start-up companies. The Gyumri Technologi-cal Park is another important project. It aims to combat Armenia’s brain-drain challenge. We also partner with the governments of Armenia and Finland as well as the private sector in implementing the mLab ECA Project to position Armenia as a regional hub for IT, and our joint mobile application development laboratory with Nokia serves as an accelerator for teams, skills and start-ups in mobile field.

European Times: Why should foreign investors target Armenia?

Bagrat Yengibaryan: Armenia is a regional hub for IT development and creative solutions with its mobile sector alone growing at 25% per year and becoming one of the country’s leading sectors, offering high quality and com-petitive salaries. Also, Armenia is a great environment for business, tech development and comfortable lifestyle.

European Times: What is your personal message to potential partners in Europe?

Bagrat Yengibaryan: Armenia is a good investment des-tination for foreign companies which are looking for innova-tive solutions in IT and complex engineering.

THE EUROPEAN TIMES

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IT & TelecomFinance

Agriculture &Food Industry

• High-Potential Agriculture Sector Continues to Grow

“ We also want to attract foreign investments to our agriculture and food-processing activities. There is always going to be a demand for agricultural

products.”Sergo Karapetyan, Minister of Agriculture


34

High-Potential Agriculture Sector Continues to Grow

Sergo Karapetyan, Minister of Agriculture, discusses the potential of Armeniaʼs agriculture sector.

European Times: What are some new developments in the agriculture sector?

Sergo Karapetyan: Over the past 20 years we have tran-sitioned to a more stable, privatised, market-oriented agri-culture sector, and around 340,000 small and medium farms have been established. We have made substantial progress thanks to a number of development programmes. Our plant cultivation, greenhouse production, fi shing, fruit production and cattle breeding have seen particularly strong growth. The agriculture sector grew by 9.5% in 2012 and agricul-ture now accounts for 19.1% of Armenia’s GDP. We need

to sustain this growth, if not exceed it. One of the issues is to establish cooperation between small farming units to increase their total production.

European Times: What are some of your current projects?

Sergo Karapetyan: Since 2011, we have been supplying farmers with high-quality seeds, fertilisers and other support to help them exploit their land in the best way. An agricul-tural credit programme has been launched in 2011, which is subsidised by the government. Other projects include a programme fi nanced by the World Bank to boost cattle pro-duction. As a result of such programs, the amount of land under cultivation in Armenia has increased signifi cantly and cattle-breeding gross production, according to the data of January-November 2012, has grown by 6.1%.

European Times: What are some of the challenges for the agriculture sector?

Sergo Karapetyan: We need to increase our agricultural products’ exports, a challenge since Armenia is landlocked. We have already developed processing of wine and cognac, fruits and vegetables, and dairy and meat products. Now we are working to make our products competitive in global markets and to conform to EU standards.

European Times: What are some of your other goals?

Sergo Karapetyan: It is vital for us to encourage more young people to get involved in agriculture rather than moving to the cities. We have the potential to double agri-cultural production over the next fi ve years. We also want to attract foreign investments to our agriculture and food-processing activities. There is always going to be a demand for agricultural products. We are open and ready to receive investments in this sphere, particularly from EU investors as we continue our drive to implement EU standards.

I would like to invite potential investors to come to Armenia and see for themselves what the country has to offer.

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Agriculture & Food Industry

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Sector

Mancho GroupArin-Berdi St. 5th Lane, 10 Building

0053 YerevanTel.: +374 10 474940www.manchogroup.am

Top Manufacturer Increasing Brandy ExportsMancho Group, a thriving Armenian producer of brandies, wines, candies and fl our, has been growing rapidly since it was founded in 2001. Starting with a single production unit and seven employees, the company now has around 300 employees and three production lines in its modern factory.

CEO Ivan A. Mosoyan explains, “We were privatised in 2004 and opened a large new factory in 2008. We are now able to produce our own wheat to distil into alcohol, so our produc-tion of alcoholic beverages will increase substantially.”

Focus on alcoholic beverages

The company produces around 120 types of candy and has a steady market for its fl ours, but it is now putting the emphasis on its alcoholic beverages since these have the most revenue and export potential. In fact, the Mancho Group is looking to double or triple its exports of brandy in 2014.

The company already has a strong presence in Georgia, Russia (where the Mancho Group has opened its own offi ce) and Kazakhstan. It now wants to boost its exports to those markets while also expanding into Ukraine, China, Germany and other countries. The Mancho Group’s impressive success story demonstrates the potential of Armenian entrepreneurship.

Bari Samaratsi117/7, 22nd street, Nor Aresh, 0020 Yerevan

Tel: +374 10 472550, [email protected]

High-Quality Food Company Open to

PartnershipsLeading meat producer Bari Samaratsi, whose name means “good Samaritan”, was created around 20 years ago to bring jobs and other benefi ts to the people of Armenia. Hovhannes Hovakimyan, founder and Managing Director, explains, “We were able to secure the best-quality equipment from Europe and turn our facility into a major production plant. Then we began cooperating with specialists in Germany and Switzerland concerning best practices. Now we have all ISO certifi cations, a quality-control system and great corporate governance.”

Commitment to qualityBari Samaratsi employs around 100 people and distributes its products throughout Armenia and abroad, including to the US through a contract with major retailer Walmart. Hovhannes Hovakimyan says, “We always use the purest and cleanest raw materials in order to produce the highest-quality products. Our workers put not just their efforts but also their soul into our products.”

The company expects its turnover to increase as it adds new products to its portfolio, including baked goods. Now Bari Samaratsi is looking for partners to help it reach its goals. Hovhannes Hovakimyan points out, “We need long-term investment and we can offer international investors the best type of joint-venture partnerships.”


36

IT & TelecomFinance

Transport

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Transport

Focus on Transport Infrastructure

Set at the crossroads of Europe and Asia, Armenia is ideally located to serve as an international transport and telecom hub. Armenia shares its borders with Turkey, Iran, Georgia and Azerbaijan – all with great growth potential – and is crossed by some of the worldʼs busiest international land-transport routes. It has also developed a key role as an air-transport centre.

Armenia is putting the emphasis on transport-infrastructure development as it works to attract more investment in export-oriented enterprises. One key project is the North-South Road Corridor Investment Programme for 2009-2017, now in its third phase. Supported by the European Investment Bank and the Asian Development Bank, the third phase includes rebuilding and widening 46 km of the two-lane road between Tallinn and Gyumri to make it a four-lane dual car-riageway; planning phase four of the project; and develop-ing a long-term road-subsector plan along with a road-asset-management and road-maintenance administration system. The North-South Road Corridor is a 550 km route connect-ing Central Asia to Europe, Iran, Turkey and Georgia.

Armenia also has road and rail links to the Black Sea ports of Batumi and Poti (Georgia) and to shipping routes to the EU through the Transport Corridor Europe-Caucasus-Asia (TRACECA). The TRACECA project includes a modern

logistics centre in Yerevan which is expected to spur on the growth of Armenia’s logistics services.

Concerning rail infrastructure, South Caucasus Railway, a branch of Russian Railways, has acquired a 30-year concession to operate rail services in Armenia and recently announced an increase of 18% in passenger traffi c between Armenia and Georgia. Companies from Iran, China and Russia have expressed their interest in building the Armenian section of a cross-border railway link between Iran and Armenia. Transport ministers from Armenia, Iran and Russia met for the fi rst time in November 2011 to discuss the potential project.

Concerning air transport, in October 2013, Armenia’s par-liament decided to implement an “open skies” policy, and in January 2014 Russia and Armenia announced an agreement to remove all restrictions on the number of carriers, frequen-cies, aircraft types and number of destinations on air routes between the two countries.

1

THE EUROPEAN TIMES

APAVEN Co. LTD95 Araratyan street

Yerevan 0043Tel: +374-10-428-650

[email protected]



38

IT & TelecomFinance

Health

“Being a member-state of the World Health Organization we have put a task before us to reduce the prevalence of non-communicable diseases within the comprehensive policy framework of European region “Health 2020”.”

Derenik Dumanyan, Minister of Health

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Health


1

Upgrading Quality and Accessibility of Healthcare Services

Derenik Dumanyan, Minister of Health of the Republic of Armenia, discusses the priorities for the healthcare sector.

European Times: What are the main goals for Armenia’s healthcare sector?

Derenik Dumanyan: My main priority is to make health-care services as affordable as possible for every person in Armenia. Other priorities include encouraging healthy life-styles for our citizens, which involves implementing various programs. The Ministry also continues to improve Armenia’s healthcare system. We have a suffi ciently extended network of primary and secondary healthcare institutions where we provide professional medical care.

European Times: What are some of the challenges the healthcare system faces?

Derenik Dumanyan: In addition to the need to continue to improve quality, we have to cope with funding challenges. No healthcare Minister in the world has enough funding to fulfi l all needs of the healthcare sector, and Armenia is not an exception. We are trying to improve the allocation of funds. Bringing healthcare to the most vulnerable popula-tion groups is another challenge, and we have increased our funding for this direction starting in 2014.

European Times: What are some of your other current projects?

Derenik Dumanyan: Aside from primary and secondary health-care services we will develop the third level medical services. For the

fi rst time, we are building a new oncology centre of excellence in the frames of a public-private partnership. The projection, the con-struction of the radiation treatment building, as well as its enrich-ment with the latest medical equipment will be implemented within the Credit Program of the World Bank. It will provide treatment not only for patients from Armenia but also for patients through the whole region. The introduction of mandatory medical insurance starting from January 2015 will also be a major project. We have many other projects underway in partnership with USAID, WHO, UNICEF, the Russian Federation and other partners.

European Times: What is your personal message to the international community about the healthcare in Armenia?

Derenik Dumanyan: Being a member-state of the World Health Organisation we have put a task before us to reduce the prevalence of non-communicable diseases within the comprehensive policy framework of European region “Health 2020” and to reach this aim we are starting a great work for the implementation of a healthy lifestyle.

1

“ARPIMED” phar-maceutical company was established by Vachagan Ghazaryan and his co-founders in 2001 aimed at launching home pro-duction of medicines in Armenia. The company is engaged in manufacturing essential medicines, prophylactic and medicinal agents used in stomatology, antiseptic and disinfecting solutions. “ARPIMED” LLC has been awarded ISO 9001:2008 and GMP Certifi cates by German “TÜV Rheinland” and French “AB Cer-tifi cation” companies correspondingly. It has also recently applied for the local (European standards) GMP Certifi cate and inspec-tions at the plant are underway.

www.arpimed.am

Sector

Local Pharmaceuticals Meet International Standards


40

IT & TelecomFinance

Tourism

“Armenia won the Russian-language National Geographic “Traveller’s Discovery of the

Year” prize in 2013”Ara Petrosyan, Deputy Minister

of the Economy in charge of tourism

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Tourism


1

Developing a Diverse, Sustainable Tourism Industry

Ara Petrosyan, Deputy Minister of the Economy in charge of tourism, discusses Armeniaʼs goals for its tourism industry.

European Times: What are Armenia’s main tourism attractions?

Ara Petrosyan: Armenia – the “Island of Mountains” or the “Rooftop of Asia Minor” as ancient map-makers used to call it – has always been at the crossroads of civilisation, both geo-graphically and culturally, and in 301 AD Armenia became the fi rst nation to adopt Christianity as its state religion. Armenia is often referred to as an open-air museum. The country’s 29,000 sq km contain around 25,000 histori-cal monuments, and many of them are classifi ed UNESCO World Heritage sites. Yet Armenia has even more to offer, including its extremely varied and impressive natural sites, authentic rural experiences, and urban entertainment. This juxtaposition of assets, along with a reputation for hospitality and proximity to Europe, gives Armenia a signifi cant competitive advantage in tourism.

European Times: What is the gov-ernment doing to attract more tourists?

Ara Petrosyan: Armenia began to develop its tourism sector even during the diffi cult transition period. The fi rst achievement was joining the World Tourism Organisation in 1997. The next step was the creation of a regulatory

environment and marketing activities for tourism. Effective state policies, well- established public-private partnerships, and mutually benefi cial international and regional cooperation have resulted in signifi cant growth in Armenia’s tourism sector over the past decade. Armenia had 843,330 tourism arrivals in 2012 and around one million in 2013, 24 times more than in 2000. Armenia adopted the Open Skies policy in 2013 which should increase tourist fl ows. Visa facilitation is another sign of progress. Armenia was one of the fi rst CIS and Eastern European countries to implement an electronic visa system, and since January 2013 all citizens of EU member countries and four non-EU countries which are part of the Schengen Acquis can enter Armenia without a visa. Armenia is cooperating with the gov-ernment of China to make Armenia an offi cial Approved Destination for tourists from China. According to the World Economic Forum’s 2013 report, Armenia is number one among CIS countries and second among 140 countries concerning improving its tourism-competitiveness ranking, rising an impressive 11 positions.

European Times: What are some recent accomplishments in the tourism sector?

Ara Petrosyan: We have been increas-ing our visitor numbers and interna-tional marketing efforts, while also expanding our tourism infrastructure and diversifying our tourism offerings. Through a partnership with the World Federation of Tourist Guides Asso-ciation, Armenia will become an Inter-national Training Centre for tourist guides. Armenia was the fi rst CIS and Caucasian country to broadcast tourism commercials on CNN and Euronews, and the documentary “Armenia, the Land of Noah” has been broadcast all over Europe, including in Russia and Scandinavia. Armenia won the Russian-language National Geographic “Trav-eller’s Discovery of the Year” prize in 2013 and its tourism posters have also been winning awards. In addition, Yerevan’s Zvartnots International Airport was named “Best Emerging Airport of Russia, CIS and the Baltic States” in 2013.


42

THE EUROPEAN TIMES

2

Sector

European Times: Why should European travellers visit Armenia?

Ara Petrosyan: Armenia is unique in offering a mix of all kinds of tourism products, from spa and eco-tourism to MICE, agro-tourism, cultural and religious visits, adventure and sports travel, and much more. One of Armenia’s most important attractions is the hospitality of the Armenian people; we treat tourists like members of our family.

European Times: What are the main challenges for the tourism sector?

Ara Petrosyan: Our challenges are to continuously increase Armenia’s com-petitiveness in the global tourism market through ensuring quality tourist services and protecting tourists’ rights; develop our tourism infrastructure; continue to diversify our tourism offerings; step up our regional and international promotion of Armenia; and encourage community-based tourism develop-ment. We want to attract 1.5 million tourists by 2017, create 6,000 new jobs in tourism, and increase tourism’s con-tribution to our GDP. Promoting sus-tainable tourism development through-out the country is our main goal.

European Times: What are some of your ministry’s recent projects?

Ara Petrosyan: Projects include the record-breaking 5.7-km Tatev rope way

built through a public-private partner-ship; the transformation of Jermuk spa into a year-round resort; the opening of a Marriott hotel in Tsakhkadzor ski resort and the planned opening of a Hyatt hotel in Vayots Dzor Marz in early 2014; new festivals; and an expanding bed-and-breakfast network.

European Times: What are some opportunities for European investors in Armenia’s tourism sector?

Ara Petrosyan: We need more invest-ments in accommodations (including international-brand hotel chains), enter-

tainment centres, and human-resources development.

European Times: What is your personal message to investors and potential visitors?

Ara Petrosyan: International interest in Armenia as a tourism destination is growing rapidly. With its millennia-long civilisation, rich historical and cultural heritage, scenic natural wonders, diverse tourism options and hospitable people, Armenia has a unique place in the global tourism market. Armenia is the right place to visit and the right place to invest in tourism projects.

900000

800000

700000

600000

500000

400000

300000

200000

100000

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

162089206094

262685318563

381136

510287558443 575281

683979

757935

843330Inbound Tourism

Analysis of the last decade shows that in 2012 the number of tourist arrivals surpassed tourism arrivals in 2000 18 times.

In 2012 the number of tourist arrivals to Armenia had comprised 843,330. The index shows a 11.3% growth as compared with the same period of 2011.

Source: Ministry of Economy of Armenia

© Ministry of Economy of Armenia

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Tourism

1

Unique Hotel Property with a Riding Centre and More

Ararat Hotel is much more than a hotel. This elegant property in a fully renovated century-old landmark building features cutting-edge modern amenities, a unique style and traditional Armenian hospitality. Ararat Hotel off ers exceptionally spacious, beautifully equipped guestrooms and suites and a wide range of facilities and services designed to make every guestʼs stay memorable.

The hotel’s “Garden of Eden” sets the tone when guests enter the property. A quiet, peaceful green space, the garden is one of the hotel’s most popular features. Guests also delight in Noy res-taurant, which specialises in gourmet local and international dishes, and the Jockey restaurant, which serves fi ne cuisine in a dining room showcasing Armenian architecture and crafts. The Red Lounge bar-restaurant serves exotic cocktails and delicious canapés.

World-class equestrian centre

The hotel is particularly popular among horse-lovers thanks to its equestrian centre. Riders can explore the beautiful

countryside and enjoy magnifi cent views of historic Mount Ararat. Guests can also stroll along the peaceful banks of the Parz Lich River, go for a swim in the hotel’s outdoor pool or the nearby mineral-rich salt lake, pamper themselves in the hotel’s spa or work out in the fi tness centre.

Defi ning what makes Ararat Hotel special, Managing Director Vachik Igityan says, “In addition to our particu-larly large guestrooms, we offer a sauna, a gym, our own horseback-riding facility and a hippodrome. Wherever our guests go on the property, our attentive staff members are ready to serve them. We even provide complementary drinks.”

To make the most of its equestrian centre, the hotel is considering offering

riding tours. Other projects in the works include a new conference hall. Vachik Igityan says, “We welcome guests from many countries, particularly executive travellers who make use of our business centre and meeting rooms. We partner with various tour groups and travel agencies, and we are defi nitely open to new productive partnerships with companies around the world.”

The hotel places a high priority on listening to customers’ feedback and has a strong presence on social media. Ararat Hotel also promotes Armenia’s consider-able tourism attractions and aims to play a leading role in developing the country’s tourism industry. Vachik Igityan says, “Armenia has many national treasures that people should know about. This country is also very beautiful and safe. I would like international travellers to know that Armenia is a country with great traditions, a welcoming population, and the world’s best barbecue!”

Ararat Hotel7 Grigor Lusavorich Street

0015 YerevanTel.: +374 60 51 10 00

[email protected]


441

World-Class Four-Star Hotel in Quiet District

The new four-star Sochi Palace Hotel Complex brings world-class services to Yerevan. The hotel off ers a wide range of amenities and services, including free high-speed Internet connections, free parking, an airport shuttle, room service and more. The hotel prides itself on its complete service off ering, from providing sumptuous breakfasts to hosting high-profi le events. The Sochi Palace Hotel Complex is conveniently located in Jrvezh, a quiet district around 10 km from the centre of Yerevan and just 23 km from Zvartnots Airport. The hotel opened in 2012 and has already become a favourite among visitors to Armenia.

Armen Khachatryan, CEO

CEO Armen Khachatryan explains that the Sochi hotel group, owned and operated by himself and his three brothers, is dedicated to providing the kinds of facilities and services that inter-national travellers demand. The group operates two hotels in Yerevan, the Sochi Palace and the Sochi Plaza. He says, “I worked with the Sochi group in Russia and saw that there was a need for inter-national-standard hotels in Armenia.

I am in charge of operations here. We decided to locate our hotels outside Yerevan’s downtown area because there are already several hotels there and where we are it is much quieter.”

At the Sochi Palace, guests have a choice of rooms, from comfortable single rooms to spacious double rooms and suites complete with Jacuzzis. Every room and suite has Internet connec-

tions, air-conditioning, a television with a DVD player, and an individual colour scheme. Guests can reserve rooms by telephone or online.

From billiards to fi ne dining

The Sochi Palace has so many upscale services that its guests often spend every evening at the hotel. Guests can relax in the hotel’s cigar bar or play a round of

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Tourism

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Sochi PalaceDjrvej, Qochinyan 13/13Tel: +374 60 54 06 07 +374 60 51 06 07

Mob: +374 96 80 06 [email protected]

www.sochiplaza.am

billiards in the luxurious billiard room, where several international-standard tables are available and a VIP hall is the perfect place to discuss business over a friendly game. The hotel also has its own nightclub, a popular addition to Yerevan’s nightlife scene. Special events are often organised at the Sochi Palace, since it is considered one of Yerevan’s most prestigious hotel venues.

Delicious Armenian and international dishes are served in the hotel’s elegantly decorated restaurant, while the bar specialises in cocktails and a large choice of fi ne wines. The Sochi Palace Hotel’s spa is the ideal choice for guests who would like to be pampered. The sumptuous spa is beautifully decorated, featuring its own courtyard and a plunge pool, and snacks are served on request.

Ambitious growth plans; partners welcome

The Sochi group has ambitious growth plans and is considering opening a new hotel in Georgia while also expanding

in Armenia and other markets. Armen Khachatryan says, “We want to open Sochi hotels everywhere. Our fi rst priority is to brand Sochi hotels. We would like people to know more about our hotels and we want to be known as a leader in Armenia’s hotel sector. Inside Armenia we have a very strong brand, but outside of Armenia our brand is not very well known. I would like to say our brand is new but it does not suffer because of that.”

The group is also working to bring more charter flights to Armenia, since travelling to the country is currently expensive. Armen Khacha-tryan explains that the Sochi group welcomes international partnerships as it pursues its many ambitious projects. He says, “Partnerships are a great way to increase business and we are open and willing to cooperate in any and all partnership opportunities.”

Special tourism services

Sochi Palace is the only hotel in Yerevan which also operates a tourism and marketing department. The Depart-ment of Tourism opened in April 2013 and is located just inside the hotel. It offers tour packages and trips to histori-cal sites in Armenia, organises events and provides other tourism services, including on-line booking.

One of the Sochi group’s priorities is to boost the growth of Armenia’s

tourism industry. Armen Khacha-tryan points out, “Our main challenge is to attract more visitors to Armenia. We want to see more business and leisure tourism and we feel Armenia’s tourism industry has excellent growth potential. Hurdles we are facing are the high cost of fl ights to Armenia as well as a lack of knowledge of the country in Europe and elsewhere in the world. We are working hard to make our Sochi hotels in Yerevan, and in Armenia, better known worldwide. We work closely with Armenia’s Ministry of Tourism and other tourism organisations, and we are very much involved in the government’s drive to attract over one million tourists to Armenia.”

Armen Khachatryan urges interna-tional travellers and investors to take a closer look at Armenia. He explains, “People need to know that no matter what is happening beyond Armenia’s borders, it is extremely safe here. Armenia is a wonderful country with welcoming people and many business opportunities. Armenia needs to be presented accurately to people all over the world.”


461

Luxury Hotel Services with a Special Touch

The four-star Armenian Royal Palace Hotel and the four-star Royal Plaza Hotel, with the same owners, off er international business and leisure travellers a choice of luxury hotel services in Yerevan. Both hotels are seeing an increase in visitor numbers and are ready to welcome travellers to Armenia.

Upscale resort atmosphere just outside the cityThe Armenian Royal Palace hotel, which opened in 2007 in an elegant new building, is located in a quiet suburb yet is just a 10-minute drive from famous Republic Square in the heart of Armenia’s capital. The hotel offers stunning views of historic Mount Ararat and Mount Aragats, and has a choice of 64 particularly spacious, beau-tifully decorated guestrooms and suites. Each is equipped with air-conditioning, satellite TV, Internet connections, a mini bar and a safe.

Upscale amenities at the Armenian Royal Palace include a sumptuous

breakfast buffet, gourmet Armenian and international cuisine served in the restaurant, and an outdoor café specialising in light meals and snacks. The hotel also has a recreation room, a fi tness centre, a sauna, a hot tub, a luxurious spa with a pool, free parking, free Internet connections, laundry service, a world-class billiards hall, a working fi replace, a peaceful garden complete with a fountain, and a wine-tasting room decorated in authentic Armenian style where guests can sample many types of wines.

The Armenian Royal Palace hotel complex also has its own lobby bar open 24/7, a cinema, a bowling alley, a children’s café, an Internet café, slot

machines and a casino. Business trav-ellers can count on a state-of-the-art business centre as well as a choice of meeting facilities equipped with the latest technologies. The charming Paradzhanov’s Cottage Museum is just a short walk from the hotel.

Everything travellers are looking for

The owner Azat Safaryan explains, “I was running a small six-room hotel essentially for visitors to a business I was operating. I saw the need for high-quality hotel accommodations in Yerevan and decided to build the Royal Palace in a quiet suburban setting, yet very near the city centre. This is a very luxurious hotel which offers the highest-quality services. Our guests can have a comfortable stay and we have so many different facilities here that they never have to leave the hotel.” He adds that the Armenian Royal Palace continues to improve and will add even more services in the future.

Royal Palace Hotel

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Tourism

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Royal Plaza Hotel9 Saryan St., 0002 Yerevan

Tel.:+374 10 50 50 [email protected]

High-quality lodging in the city centreTo provide accommodations for travel-lers who prefer to stay in Yerevan’s city centre, Azat Safaryan decided to open the four-star Royal Plaza Hotel, which is set on a quiet street in the heart of the city adjoining the Marti Rossarian Museum. He explains, “The Royal Plaza is located in a fashionable district known for the many artists, writers and others who have lived there.”

The Royal Plaza provides every kind of amenity visitors are looking for, including 24-hour laundry service, a convivial bar, a conference hall, a res-taurant open only to the hotel’s guests, room service, free Wi-Fi Internet con-nections, reception service and an airport shuttle. The Royal Plaza features a mix of classical and modern styles and is equipped with the latest technologies.

Both hotels are attracting visitors from all over the world. Many guests travel to Armenia through tour operators in

Georgia and Russia, and both the Royal Plaza and the Armenian Royal Palace work with international tour operators as well. The hotels are also represented on international booking websites, including Expedia, Hotels.com and Booking.com. Both hotels regularly advertise special offers which make trav-elling to Armenia even more attractive.

Same level of service as international chains

Defi ning the competitive edge of both the Royal Plaza and the Armenian Royal Palace, Azat Safaryan says, “We provide the same level of service as interna-tional hotel chains do, so we can easily compete with them. We are working to establish a strong brand name which will be recognised worldwide. We base our Royal brand on high-quality service, well-trained and dedicated staff members, well-equipped and elegantly decorated rooms and all the amenities leisure or business visitors are looking for.” A top selling point for both hotels is

that the hotels’ experienced events team will organise any type of event for free in either hotel.

Urging international travellers to come to Armenia and be welcomed at the Royal Plaza and the Armenian Royal Palace, Azat Safaryan concludes, “Armenia is a beautiful country with a rich culture and many historic landmarks, including our famed mon-asteries and landmark churches. A trip to Armenia will be interesting, unfor-gettable and entertaining because of the country’s many cultural attractions, natural beauty, fi ne cuisine and hospi-table people. I want everyone to come to Armenia and have a great time, go home rested and be eager to come back to the country again.”

Royal Plaza Hotel


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the european times - armenia 2

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