Armenia loses credibility among foreign investors
Armenia, a resource-poor country that is relatively isolated from key neighboring countries due to its aggressive policy, records less and less foreign investment into the country.
Along with losing its political partners due to vague foreign policy lacking any line, the country is losing its credibility among foreign investors, as well.
The volume of direct foreign investments to the real sector of Armenia in January to March 2016 has amounted to 14.9 billion drams ($0.031 billion) compared to 35.3 billion drams ($0.073 billion) in the first quarter of 2015.
Net flow of investments in this period made up 1.699 billion drams ($3.558 million).
The external debt swelling from year to year is another challenge for the country, and deteriorates the situation in its ill-conceived economy.
“In the first quarter of this year alone, our external debt increased by $576 million hitting $5.2 billion. In other words, during these months, our foreign reserves have registered a fall of 10 percent, while the debt has increased by 12 percent. Everything indicates that the existing negative trends in the Armenian economy will continue,” Haykakan Zhamanak recently reported.
Foreign loans account for the bulk of the national debt burden.
Foreign debt, which outstrips Armenia’s state budget by billions,
was supposed to help put the country on a sustainable development
path, but, so far, the country has achieved almost no progress.
The borrowed money have not boosted the economy at all and failed
to develop promising economic sectors, hence, there is no stable
income, while bulk of the borrowed money “disappeared”.
The opposition and experts regularly express concern at the increased debt, saying that Armenia may have trouble servicing it in the future and it will have no means for it.
They also accuse the authorities of wasting or misusing the more than $3 billion borrowed since 2009, noting that the only sector that is prospering in Armenia is the corruption.
Meanwhile, Armenia has the highest level of unemployment in the region, while unemployment in the country follows very strong age, gender and regional patterns. The figure is expected to be at the average of 18.3 percent in 2016. The rate of unemployment in the first quarter of 2016 was at the rate of 19.3 percent.
Poverty is the most common in rural areas, where approximately 40 percent of the population reside. Here people lack even basic infrastructure, while in urban areas the crisis is characterized by lack of new investment and restricted employment opportunities. Already dire conditions for the country’s most vulnerable people worsened with the ongoing global economic crisis.
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