In November 2019, the United Nations Conference on Trade and Development (UNCTAD) published an Investment Policy Review (IPR) of Armenia, following a request of His Excellency the President, Mr. Armen Sarkissian. Based on the country’s efficiency profile, characterized by a well-educated workforce, a strong skills heritage, competitive salary levels and market access to key trading blocks, the IPR identified several export and efficiency-seeking industries that could aim for billion-dollar export sales in the next 10 to 20 years.
It also provided recommendations meant at removing key obstacles to investment in those sectors, as part of a long-term strategy for promoting and benefiting from foreign and domestic investment.
In the few months since the IPR was published, the Coronavirus disease (COVID-19) epidemic has turned into a pandemic crisis that is altering the world economy and will continue to do so for the years to come. COVID-19 poses a number of threats and policy challenges to all economies, ranging from the shocks to the health system, the disruption of local and international production and distribution networks, the collapse of domestic and global demand, and the resulting rise in unemployment, debt and macroeconomic instability.
The pandemic has also severely impacted on the operations of multinationals, trade and foreign direct investment (FDI) flows. Trade has been hit by simultaneous supply, demand and trade cost shocks, resulting in the sharpest and deepest contraction in a generation. FDI flows are also slowing dramatically.
The latest estimates project a decline of 30 to 40 per cent in global flows during 2020–2021, the lowest level of the past two decades (UNCTAD, World Investment Report 2020 – International Production Beyond the Pandemic, June 2020). Because of the integrated nature of trade and investment, especially in global supply chains, declining FDI could have knock-on effects on trade, and vice versa.
In line with the vision set forward for the country to make Armenia a worldwide hub for innovation, ever more relevant in the context of the current crisis, this joint report, at the request of President Sarkissian, aims to assist the authorities in identifying priority actions to contain divestment and support new and existing investors, based on the comparative advantage in high-tech, software and engineering activities, with a special focus on artificial intelligence (AI), data science and deep technology, as well as food safety and security.
