Banks.am interviewed Chairman of Belgian-Armenian Chamber of Commerce (BACC) Valery Safarian and BACC Representative in Armenia Felix Paytyan.

-It is known that one of the main aims of the Chamber is to support Belgian companies in developing activities in Armenia. So far what results have been reported in that area?

Valery Safarian -It’s not only about Belgian investments in Armenia, but more and generally about trade relations between Armenia and Belgium.  we will not limit ourselves to only Belgian companies ; it will also be about Armenian companies investing in Belgium. Our marketing towards Belgian companies is to let them understand that a hub or a branch in Armenia to cover other CIS countries is very good market approach. In a first instance large investments are not necessary, what matters is that they view Armenia first as a state connecting them to other markets.

Some practical cases: recently a Belgian company manufacturing “corks” for bottles of wines and beers in Belgium decided to set up a small factory in Armenia to cover the local market but also neighbouring countries such has Georgia.

Another example - there is an Engineering Company working in the area of water resource development, that won a tender last year organized by the Ministry of Natural Resources of Armenia. Relying on their experience in Armenia, the company’s managing director is thinking right now to set up a local branch using local engineers to manage the company’s activities in the region. It was their first experience in the CIS countries.

The medical infrastructures and technologies are especially well developed in Belgium. Armenia three years ago decided to purchase Belgian technology to treat oncology from the company called IBA, this investment has helped to develop a regional center for oncology in Armenia.

Throughout these years, the Belgian business community has been learning more and more about Armenia. Previously, Belgium had no notion of what the Armenian economy was.

-Are there any data concerning the Belgian companies that made investments in Armenia through your chamber?

Valery Safarian –  Those data are confidential but to give you a gross idea Belgian-Armenian turnover makes up around EUR 200mln annually. But it’s just the starting point. Today for example I came to Yerevan with a letter of invitation by one of Belgium’s airports. They would like to develop collaboration with Zvartnots Airport pushing several European or local airlines to make direct flights between Brussels and Yerevan. It’s a project of major importance because I strongly believe that the availability of direct Yerevan-Brussels flight will contribute to tourism development in Armenia and besides, products will be transferred via plane at fewer expenses.  

The Belgian Armenian chamber of Commerce has already organized mission in  Armenia for 6-7 times and each time with a new group of businessmen. Over 120 businessmen have already come to Armenia with us. The 65%-70% of companies that came here had later trade relations with Armenian companies. But connecting people is not only about direct investments. Belgian companies coming here start trade relations, study the market the  region. It’s also a kind of investment. Belgian technology is transferred to Armenia, then Armenia slightly transforms it and puts it on the CIS market. It’s an achievement, and throughout these years we have come to be quite efficient in this field.

Just like we did before, we are again planning to return with a new group of Belgian businessmen in the coming months.

Felix Paytyan – Belgian-Armenian Chamber of Commerce plans to set up a visible representation in Armenia. It will enable us to stand by those partners who have already made investments in Armenia. It will raise Belgian-Armenian relations to a new level.

-Are there any Armenian, which are already interested in being represented in Belgian market?

Valery Safarian - One major sector of collaboration between Armenia and Belgium is the diamond industry. Lots of Armenian companies merge with Belgian companies in this field. Due to diamond transfers, for many years Belgium ranked first in Armenia-EU trade relations.  
 
We are also  here today with a construction company representative but I won’t reveal his name  as I want him to be the one making it official soon that a major partnership is born between Armenia and Belgium. It’s the second time this company is coming because they want to merge with a major Armenian construction company, and the idea behind it is that the Armenian company makes investments in Belgium’s real estate industry, which is a very stable market. If you compare Brussels real estate markets with those of Paris and London, then Brussels is 50% cheaper. But Brussels will smoothly grow in the coming years, the prices will also rise, and the risk of crisis in real estate in Belgium is really limited.

We also cooperate with French University in Armenia (UFAR). Each year we welcome students from Armenia who come to acquire specialized skills in Belgium. Felix Paytyan our Director in Armenia was one of them for instance.

Felix Paytyan – I have been cooperating with the Belgian-Armenian Chamber of Commerce since 2009. I left for Brussels and passed a probation period there. Our cooperation came to be more profound later. Once a year Chamber representatives arrive in Yerevan and look for new partners. They have already established cooperation in the economic, sport, political and other fields.

-Will European investors still be interested in Armenia after Customs Union membership?

Valery Safarian - Of course, as Europeans, we were surprised and not so happy about it because we were convinced that Armenia would sign the DCFTA agreements in Vilnius. Armenia would then attract more European countries to make direct investments. We understand why this decision was taken, and we understand that Armenia is now working hard on Customs Union membership.

In terms of business values I feel Armenia has more to bring to Customs Union than the other countries. Customs Union membership will allow attracting more Belarusian, Russian and Kazakh investments. But in terms of business values, I’d like Armenia to be the leader in this Union. As a liberal country Armenia has to influence the others to be more open economies, respecting differences and fighting monopolies.

The 3 other countries are not necessarily the best for investments, so let’s hope if Armenia takes a strong role in Customs Union, it will be profitable for it.

Had Armenia signed the DFTA agreements, I don’t believe all European investors would have come here in two days  to invest a lot of money. Europe still faces crisis.  

Therefore when a powerful partner, like Russia, offers to make an investment of millions of dollars in your economy you start to understand Armenia’s wish to join the Customs Union. Europe would not be able to offer such an opportunity on a short-term basis.

I also hope that Armenia and the EU will find a new format of cooperation in near future. Armenia’s balanced foreign policy has always been a key success and we do hope that Russia will realize it should allow Armenia to cooperate with the EU as well.

-Mr. Safarian, You previously mentioned you believe Armenia might one day establish an economic union with Azerbaijan and Georgia. How would you explain it, considering the current geopolitical and economic state of issues?

Valery Safarian -My thesis paper few years ago was on “South Caucasian Trade Union: Utopia or Solution for Peace”. Presently nobody finds it possible as in these three countries people react most of the time to what happened in the past, but they don’t think of what can be done in the future.
 
It will be a tremendous market like the Benelux (Belgium-Netherlands-Luxemburg) market, which was the 1st trade union and the start of the EU. If Armenia, Georgia and Azerbaijan formed a trade union, Armenia would for example be able to export electricity to Azerbaijani regions lacking electricity, and Azerbaijan would import gas and oil to Armenia. There is still a train connection, which was cut in 1990s, so we don’t need major investments to restart a good collaboration between these countries. Presently, Europe and other majors players in the region doesn’t provide tools to achieve this aim, which in reality, should be the main target of Europe and Russia…

- What plans do you have in near future?

Valery Safarian - We are presently working strongly with the Embassy of Armenian in Brussels trying to lobby the Foreign Minister of Belgium to visit Armenia as he did in case of Georgia last year in September. It will be a good achievement because ministers usually arrive with a group of large company representatives on their special visits.  

Felix Paytyan – The FM of Belgium attended professional boxer Alex Miskirtchian’s qualifying match in Liege, Belgium, on January 11. At the press-conference he stated about his great wish to visit Armenia. And if Armenia hosts the IBF World Title Fight, then he will visit Armenia on that occasion. We are today here to meet with President of National Olympic Committee of Armenia Gagik Tsarukyan and Head of Armenian Boxing Federation Arthur Gevorgyan to receive their support in holding the match in Yerevan.

Narine Daneghyan talked to Valery Safarian and Felix Paytyan