The move of the Armenian businesses to Georgia has become one of the intensive economic discussions of the past two weeks. It has become so tense that even the minister of economy of Armenia Tigran Davtyan adverted to this issue during his last press conference on the past days. The minister, indeed, has tried to calm down the concerned ones by mentioning that there is nothing extraordinary and dangerous about that. The minister also found the move of the Armenian capital to Georgia extremely exaggerated by pointing out that there is only minor outflow of capital from Armenia. Despite the amount of outflow it does exist and it goes to Georgia as well. In this regard the minister clarified, “When the capital grows the market of origin becomes narrow and certain investments are made in the neighboring states and new markets are being sought. That is a normal process and is very applicable for any small state with a developing market.” As an example he has mentioned Holland and Belgium (by the way, we could feel very proud about this comparison), from where an active outflow of capital is taking place. But surprisingly the Dutch and the Belgians are not concerned about that. “Foreign annual investment in Armenia amounts to 1 billion USD. But that comes from other states too, doesn’t it? And in those countries it doesn’t create any panic.” At first sight the arguments of Davtyan are quite convincing and substantiated. But when delving into the issue we reveal certain controversies. The National Statistics Service has not yet publicized the investment report of Armenia 2010. But the survey of the results of the previous years creates quite interesting conclusions.
As the table shows the foreign investment from Armenia really makes a minor percentage. At the end of 2007 the amount was 14.34 million USD. In the next year the Armenian capital invested 10.15 million USD in foreign countries. At the end of 2009 the amount of Armenian investment aboard amounted to 76.72 million USD because during one year 52.23 million USD investment was made. The results of 2010 haven’t been publicized yet but under this dynamics it won’t be hard to assume that quite a lot of money flowed out from Armenia. Besides that we shouldn’t forget that this is merely the official data. In fact the outflow rates may be higher. Let us also come to the point of Davtyan, who claims when the capital grows the market becomes narrow. Of course this is a correct allegation. But in our case our concern should be to understand why the outflow is taking place. The amount is not event that important. When the Armenian businessman feels that he has space for development and by maintaining his capital in Armenia invests in a neighboring country than this is commendable. But when Armenians are shutting down their businesses and moves not only his business but also the family to a foreign state we cannot help worrying. And during the previous year this process has become pretty intense especially among the mid-class and developed businessmen. The evidence of this is also the brought up by one of the cable of Wikileaks. If we add to this the rumors that this or other big business is going to be moved to a foreign country then we don’t understand the calmness of the government. Let us mention that if in our country billions of dollars were invested just like in Belgium or Holland we would be similarly calm. But the whole problem is that we have a serious issue to bring over investments and attract investors. “Foreign investment in Armenia annually reaches 1 billion USD. But that comes from other states too, doesn’t it? And in those countries it doesn’t create any panic,” said Tigran Davtyan. But the state statistics says a different thing. As the table shows only in 2008 we have had a direct foreign investment in the amount of 1 billion USD only in 2008. During 2006 we have had 495 million USD, in 2007 – 711 million and in 2009 – only 107 million investment. In the case of these numbers, the reluctance to create normal conditions for businessmen is mildly said a big “luxury” for Armenia. And this is a dangerous luxury and as you know Armenians always outstood with their luxury.