Banks.am talked to Arsen Nazaryan, Investment Climate Reform Project Manager with International Finance Corporation (IFC) Armenia.

- Mr. Nazaryan, attracting investments is a priority for Armenian economy. What policy you think this sector needs to attract investments to Armenia?

- A transparent and effective investment policy environment underpinned by strong institutions is vital to drive investment, productivity and economic growth.

Armenian investment policy also needs to leverage high-value added foreign direct investment, meaning investments that can upgrade the domestic economy, increase high-skilled jobs and ultimately improve Armenia’s value proposition for the investment.

The extent to which Armenia’s private sector is connected to the international economy plays a crucial role in upgrading knowledge and domestic production capacity. Therefore, national policy makers need to ask themselves how domestic firms can best insert themselves into global production value chains (which refer to instances where the different stages of a production process are located across countries) and attract foreign direct investment into Armenia for this purpose.

- What are the steps that the World Bank Group, namely the IFC Armenia Investment Climate Reform Project, plans to implement to help attract investments to Armenia?

- The World Bank Group’s Trade and Competitiveness Global Practice, through the IFC Armenia Investment Climate Reform Project, is providing advice to the Armenian government since 2014 as it strives to introduce more investor-friendly policies.

Since 2015, the World Bank Group initially assisted the Ministry of Economic Development and Investments (previously the Ministry of Economy) and the Development Foundation of Armenia in formulating an Investment Reform Map. This helped the government accelerate the discussion on its investment vision and identify areas of reform for national investment policy, regulations, and the institutions that implement them. The consultation process incorporated extensive analytical work, including a high-level workshop with representatives from the public and private sectors.

To formalize its reform commitment, the government adopted the Investment Policy Concept Note of Armenia in October 2015, which defines Armenia’s investment vision. The note also outlines good investment policy principles and lists reform priorities and implementation schedules to improve key areas, including investor attraction, establishment, protection and retention, as well as foreign direct investment links to boost the local economy.

- To what extent is the legislation in Armenia favorable in terms of attracting investment? In your opinion, what changes are needed to improve investment legislation?

- Recognizing the importance of concise and transparent investment regulations, the government is now reforming the Investment Law of Armenia which was adopted more than 20 years ago. The aim of reforms is to increase investor certainty and provide a solid, modern framework for investor protections and obligations aligned with Armenia’s international investment treaty obligations.

To promote the alignment of the new law with international good practice, the IFC Project has provided advisory support to the working group established by the Ministry of Economic Development and Investments. This included multiple rounds of consultations and comments, as well as the experiences of other countries in Europe and Central Asia that have undergone similar transitions. The Project also stressed the need for a proper public—private consultation process to ensure the new law was tailored to investors’ needs.

It is worth mentioning that the Ministry of Economic Development and Investments will present a new draft law on investments to the Armenian Government in near future.
The World Bank Group team remains fully available to continue exploring advisory support to the Armenian government to further revise the Investment Law and work on other issues related to improving the country’s investment climate.

Siranush Simonyan talked to Arsen Nazaryan