Armenia has been dogged by an economic slowdown in recent years, triggered in part by a recession in Russia, its neighbor and main trading partner. Since 2008, in part due also to the global economic crisis, foreign direct investments in the country have registered a sharp decline and imports have dropped by a quarter.
To reverse those trends, the government has requested the World Bank Group’s help in introducing a new initiative called Economic Diplomacy to boost trade and investment in the country. Under the new initiative, the Armenia Investment Climate Reform Project, implemented by the World Bank Group Trade and Competitiveness Global Practice, will introduce Armenian diplomats to best practice in engaging with foreign investors and trade partners. The officials will encourage investments in Armenia and support foreign-invested projects that are already up and running.
“For the past couple of years, we have been working with the Armenian government to help improve the country’s investment policy in order to generate investment and spur private sector growth and job creation,” said Arsen Nazaryan, the Armenia Investment Climate Reform Project Manager. “This recent initiative is not a substitute for investment climate reform, but rather a complement. The right combination of tools and techniques of investment policy and promotion aims to help drive investment, productivity and economic growth.”
The project is helping the Armenian government identify key stakeholders and develop a plan to improve the performance of the country’s embassies in connecting with foreign investors.
“The purpose of this new concept is to engage Armenian diplomats in investment and export promotion and as a result increase the FDI flow to our country,” said Robert Harutyunyan, Deputy Minister of Foreign Affairs of Armenia. “Embassies will play a part in getting the messages across. We very much appreciate the World Bank Group’s help in rolling out this new practice.”
The program also organized a training program focused on investment promotion for the government’s employees in November. The sessions helped participants to raise awareness about investment attraction and to understand why investors choose one location over another. Diplomats who have received the training from the World Bank Group said it was instructive.
“Through the examples of various countries we understood that we should work as a team because the initiative requires collaborative efforts. The discussions have also helped us recognize the need for developing a concept to establish the roles and responsibilities of the stakeholders,” said Vitali Saghatelyan, Head of the Export Support Department of the Development Foundation of Armenia.
The government is now developing a concept note on economic diplomacy covering multiple topics of international economic relations. Once finalized, the project will provide targeted advice in investment policy and promotion area and also develop a special guidebook to be used by diplomats in their day-to-day work.
The IFC Armenia Investment Climate Reform Project provides advice to the government in the areas of investment policy and inspections reform. The aim is to create more transparent and business-friendly regulations while ensuring public interests are protected. The project is implemented by the World Bank Group Trade and Competitiveness Global Practice, in partnership with Austria’s Federal Ministry of Finance and Hungarian Partnership Funding/Hungary EXIM Bank.