Foreign investment in Armenia drops 34.7 pct
By Sabina Idayatova
The volume of foreign investment in Armenia made up $293.1 million
in the first half of 2013, which is a 34.7 percent decrease
compared to the same period of last year, armenianreport.com quoted
the Armenian statistics body as saying.
Whereas France was the largest investor in the country last year, investing $207 million, this year it was Argentina ($76 million). French investments fell about 9 times due to reduced investments in telecommunication company Orange Armenia, and Argentinean investment increased 10 times due to the projects of Argentinean entrepreneur of Armenian descent Eduardo Ernekian. However, most of Ernekian`s investment is indirect. Russia is the leader with $32 million in direct investments.
Investments from Cyprus have increased approximately 30-fold this year. Basically, they are indirect, worth $35 million, and are aimed at the development of metallic ore deposits.
Russian investment companies are more diversified, however, energy ($4.6 million), transport ($10 million) and telecommunications ($15 million) have a large proportion.
Meanwhile, the Armenian state debt continues to grow. It made up about $4.3 billion as of August 1, 2013.
According to the Armenian National Statistical Service, the national debt increased by $82.3 million compared to the previous month.
Most of Armenia's arrears are external debt, and the figure made up $3.64 billion. In July alone, its volume increased by $67.6 million.
The South Caucasus republic's internal debt totaled $654 million, rising by $14.7 million in July. It is mainly formed by the issuance of government bonds.
In addition, the Armenian consumer bears almost half of the burden of the country's national budget.
Overall, 94 percent of budget revenues were generated by taxes and duties.
The following fact is interesting: most of the tax revenue was generated from indirect taxes, i.e. taxes which ordinary citizens pay indirectly. This includes value added tax (VAT) and excise tax, which amounted to 42.5 percent of the tax revenues over seven months of 2013. Thus, a quite large share of tax contributed to the state budget was transferred by consumers. Profit tax, income tax and other taxes have a smaller share in the state budget transfers - 35.3 percent.
According to Armenian Report, the figures could be justified only by the fact that from the administrative viewpoint, it is much easier to impose tax on consumers than on profit. However, it is, firstly, unfair to the consumers and, secondly, this leads to the emergence of "shadow" profit. Even according to official estimates, "shadow" profit in Armenia is rather large, amounting to 30-40 percent.