foreign direct investment : privatization and restructuring : investment policy and incentives : investment opportunities

Investment Opportunities

Strong opportunities exist in the electronics sector, optics, chemicals (including biotechnology and pharmaceuticals), mining, diamond cutting, tourism, software development, health-care/medical and financial services.
In the Soviet Union, Armenia was one of the most industrialized republics, with a sophisticated high technology sector. The leading industries were mechanical engineering, electronics, chemicals and energy. Ninety-five per cent of industrial production was exported to the rest of the Soviet Union and abroad. In spite of the economic collapse that followed the break-up of the Soviet Union, Armenia retained its high-quality engineering sector and numerous manufacturing facilities supported by scientific institutions. One of the most promising industries for development in Armenia is biotechnology. To harness the skills of its research scientists in this field, the government has set up a development program for the industry in cooperation with local scientific institutions.
The government is also planning the development and implementation of a pilot "Industrial Zone/Socioeconomic Development Center" project with a comprehensive vocational training center, over 100 SME turn-key projects and good quality industrial real estate designed to accommodate new businesses. The location will also have suitable road and railway connections and bonded warehouses.
One of the attractions of Armenia as an investment destination is its highly skilled labor force, which includes qualified specialists in electronics and electrical engineering, software design, optics, chemistry, construction, jewelry production and food processing. Almost one hundred percent of Armenian's population is literate; 59 percent have completed secondary school, and 13 percent have a university degree.
The standard of education in engineering and technology is high. The government is planning the development of an Information Technology Zone, including a Software Development Park and promotion of private local and foreign software engineering centers. The Zone will be sited in the center of Yerevan, near to the state university campus.

• Tourism is one of the country's best future assets, offering good opportunities for foreign investment. Not only Yerevan, but several provincial cities and regions are becoming a focus for tourism. The richness of archaeological and historical sites and monuments offers a real opportunity to develop Armenia as a center for tourism There is also potential for cultural, ecological, regional and religious tours.
  Armenian earth is said to contain most of the elements in the periodic table. The major deposits are of gold, silver, copper, iron and lead, all of which offer strong potential for investment. Armenia's leading mineral exports are precious and semi-precious stones, previously imported into the country for finishing, as the country has a long tradition in jewelry and especially diamond processing.
  Although the banking sector in Armenia is small, it has been well restructured and is well regulated, providing a good foundation for development. Opportunities exist for further foreign involvement, following the successful lead of HSBC (Midland) Bank (UK) and several other foreign (Greek, Russian, Iranian, etc.) banks.
  Armenia has a strong agricultural sector, which is of vital importance to the country, accounting for almost a third of total GDP. The food processing sector includes fruit and vegetable processing (with excellent conditions for growing high quality fruits and vegetables), alcoholic beverages, mineral waters and tobacco, and is also becoming a focus for foreign investment. However, most of the industrial facilities need upgrading.
  Medical/health-care services offer considerable investment opportunities, thanks to the availability and diversity of several world class facilities, highly skilled and experienced doctors, scientists and personnel, as well as resort and recreational/rehabilitation facilities. To utilize this potential, Armenia needs to develop further the institutional and legislative support to this industry, and to take further steps to rehabilitate its healthcare infrastructure.
  Armenia is well located to become an important link in the transit system for trade along the EU-funded TRACECA route. Much effort is being invested in improving the transportation routes linking Armenia with Georgia and Iran, the country's main transportation gateways. Moreover, once a settlement of the Nagorno-Karabakh issue has been reached, and the trade embargoes of Turkey and Azerbaijan are removed, Armenia's prospects will improve rapidly.