Azernews.Az

By Sabina Idayatova

Armenia's economy is indeed on the edge of a crisis and collapse. Social life, welfare of the ordinary people have become too unbearable due to the arbitrariness and lack of governance of the Armenian authorities. Even foreign investment in Armenia is on the decrease, armenianreport.com said on Sept.3.

The annual level of EU investment in Armenia decreased by 60.4 percent, while the Russian investment went down 4.6 percent in the first six months of the year.

According to the Armenian National Statistical Service, European foreign direct investment (FDI) reduced by 78.6 percent to $48.2 million, while Russia's FDI by 14.3 percent to $32.8 million, with more than half -- $16 million -- accounting for the telecommunications industry.

Nearly $11 million was invested in transportation, $4.6 million in the energy sector, $3.5 million in the production of base metals and about $1 million in wholesale and retail trade.

In the breakdown of EU states direct investment from France dropped by 86 percent to $28.9 million, Belgium 6.6 percent to $102,500, and Luxembourg 63 percent to $4.2 million. The total UK investment fell by 41.9 percent, while FDI increased, reaching, however, a small amount of $5.1 million that was invested in the mining industry. However, investments were nulled in the beverage industry, metallurgy and air transport. Furthermore, Austria, the Netherlands, Denmark, Italy and Hungary nulled their investment in Armenia over 5 years.

In the annual dynamics of the foreign trade turnover, the level of the Armenian-Russian turnover decreased 2.4 percent to $597 million. Foreign trade with EU countries has seen annual decline of 0.9 percent to $779.2 million.

The Armenian Finance Ministry said that only 442 (46.6 percent) out of a total of 948 companies received unqualified audit feedback on Sept.5.

204 companies did not acquire audit reports and 295 did not even undergo audits.

Companies with revenues or assets of more than 1 billion drams are considered to be large companies that are required to undergo audits in Armenia. They should submit the annual independent auditor's report by July 1 of the following year or otherwise would lose the right to participate in public purchases.

The Armenian Finance Ministry is itself "developing" through grants, which forms the basis of the Armenian economy.

U.S. Agency for International Development (USAID) has provided the ministry with a grant of $500,000 for the development of human and institutional capacities. The amount is to be spent on audits and accounting.