| Weekly Business News Digest |
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In 2019, investments in Armenia grew sevenfold, while jobs grew fourfold compared with the previous year thanks to government incentives providing customs duty exemptions and VAT payment delays to companies in priority sectors according to PM Pashinyan. In January-May this year there are 25 investment programs worth 254 million dollars and 2379 jobs, instead of 11 programs worth 35,5 million dollars of 2018.
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Picodi.com calculated that an average monthly salary is enough to buy 335 liters of petrol. The average Armenian salary is 141,545 drams (about $296), while the average price of AI-95 petrol is $0.88 (approximately 420 drams) per liter. In terms of this indicator, Armenia is at the same level as its oil-producing neighbor Azerbaijan, where the average salary is enough to buy 354 liters of petrol.
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Armenia doesn’t want to pay for Russian natural gas as much as Gazprom offers and has already started hurling fines at the Russian subsidiary, Gazeta.ru reports. In experts' opinion the price is unlikely to be lowered. Armenian authorities are seeking a price decrease and have been negotiating for months. However, all deadlines are already passed, but no accord is reached.
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In the first quarter of 2019 Armenia dropped 6 notches in the Henley & Partners Passport Index. Currently, the list of visa free countries for Armenian citizens comprises 60 countries. The drop was caused by Djibouti and Benin which have revised their visa policies recently and now Armenian citizens wishing to visit these countries will need to receive electronic visas upon arrival.
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Armenia’s population will dwindle to a little more than 2 million in 2100 from today’s almost three million, according to the UN Population Prospects 2019 - as reported earlier. The number of permanent residents will first grow to 2.967 million by 2030, than drop to 2.816 million in 2050 and 2.039 million in 2100. The populations of Georgia (3.997 million now) and Azerbaijan (10.048 million now) are, too, expected to diminish by 2100 to 2.514 million and 9.192 million, respectively (see coverage).
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Armenian Deputy PM visits Tehran
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Iran’s President met with visiting Armenian Deputy Prime Minister Mher Grigoryan. Heading a high-ranking delegation, Grigoryan arrived in Tehran to attend the 16th meeting of the Iran-Armenia Joint Economic Commission, during which agreements were reached on energy, transport, industry, trade, environment, and tourism. These were documented in a memorandum signed between the two sides.
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Iran, Armenia ink accord on energy cooperation - 100 MW HPP to be built
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The 16th Iran-Armenia Joint Economic Committee meeting was held in Tehran. A MoU was signed between the two parties, according to which the third electricity transmission line to Armenia is to be completed by 2020 in order to increase electricity exports to over 1000 MW. Construction of a 100-MW hydroelectric power plant in Armenia was also agreed in the meeting.
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A conference organized by the Chamber of Commerce and Industry of Tyumen (CCIT) was held recently with the participation of bilateral counterparts and enterpreneurs from Armenia and the region of Tyumen (RF). The conference was attended by CCIT vice president Yelena Averina and Foreign Economic Center director Vollert Olga, as well as the president of ROSARM Sergo Stepanyan. On the Armenian side ARMCCI CEO Andranik Aleksanyan participated and outlined issues related to the export and import of goods between both countries. The main objective of this initiative is to promote linkages and cooperation between business people from Armenia and Tyumen.
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Armenia, Singapore to eliminate double taxation
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The government has approved an agreement on the elimination of double taxation with Singapore, which is to be signed between July 7 and 9, during PM Pashinyan's visit. The agreement aims to contribute to the development of trade-economic ties, exchange of information between tax authorities, which provides an opportunity to reduce possible risks, as well as help create necessary conditions for boosting imports and exports. Armenia has signed similar agreements with 46 countries.
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Economic trends between Armenia, Vietnam and Singapore
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An Armenian delegation led by PM Pashinyan will depart for Vietnam and Singapore on official visits in July. To visualize the economic relations and their importance between Armenia and these countries Armenpress presented the latest economic indicators, as well as the history of Armenia-Vietnam, Armenia-Singapore diplomatic relations. Armenia established diplomatic ties with Singapore and Vietnam on July 1, 1992 and July 14, 1992 respectively.
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An Armenian parliamentary delegation, led by Speaker Ararat Mirzoyan, met in Cyprus with Defense Minister Savvas Angelides. Both sides confirmed the earlier reached agreements on cooperation. Minister Angelides presented details of the current cooperation between the defense ministries of the two countries, and the prospects, some of which are already in the process of implementation.
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342 enterprises with the participation of Georgian capital are registered in Armenia. Deputy Minister of Economy Avag Avanesyan says the two countries are making mutual investments in processing industry, tourism and agriculture, as well as IT but not at a high level yet. According to him there are 360-390 companies with an Armenian capital operating in Georgia.
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The agreement refers to the application of the act on tax conformity of foreign accounts. According to the vice-chairman of CBA, it aims to identify U.S. citizens dodging taxation. The agreement has been ratified by more than 130 countries. It applies only to U.S. citizens: financial institutions will demand to fill appropriate forms revealing their citizenship.
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According to Garegin Baghramyan, head of PSRC, Armenia’s national natural gas distribution company Gazprom-Armenia will not seek a raise in the price of gas until the end of this year. He also said that no agreement was reached on the price of Russian gas for Armenia for next year, denying media speculation that the final price of Russian gas for Armenia may be determined during Russian President's visit to Armenia.
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Armenia attends Bank for International Settlements meetings in Basel
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The chairman of the Central Bank of Armenia has attended the regular annual session of the BIS in Basel, Switzerland. During his visit Javadyan met with Chinese, Dutch and Russian counterparts. Representatives of central banks of more than 100 countries gathered in Basel for the session. The bank provides support in ensuring monetary and financial stability. Its members represent 60 central or national banks.
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Central banks of Armenia and Russia to cooperate on supervision
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Chairman of the Central Bank of Armenia Artur Javadyan participated in St. Petersburg at the XXVIII International Financial Congress "Financial Markets: Increasing Complexity, Maintaining Sustainability." Within the framework of the Congress, the Central Banks of Armenia and the Russian Federation are planning to sign a new agreement on cooperation and information exchange in the field of supervision.
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The summer session of the World Customs Organization held in Brussels has unanimously re-elected the Armenian Customs Service (ACS) as a member of its audit committee. The audit committee comprises 12 countries out of 182 WCO members. Armenia together with the Netherlands will represent the European region.
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The government of Armenia has received 13.4 million from the World Bank for the renovation of 65 kilometers of roads in Aragatsotn, Ararat, Gegharkunik, Lori and Syunik regions. WB transport expert Nargiz Riskulova reported that the allocation of 13.5 million was approved by the WB Board of Directors in May. In the first stage of the program some 170 km roads were repaired.
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Having a national air carrier is a strategic task for Armenia, PM Pashinyan said at a meeting on the development of civil aviation. "Planes must fly to and from Armenia under Armenian flag". To achieve the goal - having Armenian competitive airlines both at home and beyond - it is necessary to take balanced, thoughtful and consistent steps, Pashinyan noted.
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Hydro power plants in rivers’ sectors where endemic varieties of fish breed will be prohibited. The restriction applies also to rivers contributing to derivation tunnels in excess of 40%. If the use of water by hydro power plants lessens water resources below the permitted level, then the plants will be prohibited as well. It will also be prohibited to cut forests for building hydro power plants.
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"We have conducted a research among 1580 employers. They state that 70,142 drams is normal for them. Now we have set 68.000 drams. We have tried to show a balanced approach,” deputy minister Gemafin Gasparyan said. People working in Armenia should receive a salary higher from the minimum consumption basket. The increase of minimum wage concerns nearly 35.000 people in the public sector and 45.000 in the private sector.
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The municipality of Yerevan has summarized the results of the collection of the city’s own income for the first half of this year. As a result, the city budget income is performed fully and even 9 percent more. Compared with the same period a year before, the amount has grown by AMD 1.7 billion. Yerevan Mayor Hayk Marutyan instructed heads of the city’s districts to tighten grip over the income collection process.
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Under the program a new quality housing stock will be built for residents of outdated buildings. According to the Urban Planning Committee head Vahagn Vermishyan a construction boom is expected in Armenia in the coming years, to be driven by a new construction-related legislation which is being elaborated by the Urban Planning Committee.
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The Football Federation of Armenia (FFA) plans to build a new national stadium outside Yerevan in cooperation with investors. The main reason for building the national stadium outside Yerevan is to enhance local infrastructures' growth next to the stadium, therefore contributing to regional development.
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Armenia begins a preparatory process related to the placement of the third tranche of Eurobonds and the refinancing of debts on previously issued securities. On July 4, the Government of Armenia approved the draft decision "On establishing the specifics of organizing procedures for the acquisition of services for the issue, placement and redemption of Eurobonds."
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OFID – the OPEC Fund for International Development — and Ameriabank have signed a US$25 million loan agreement aimed at supporting trade flows to and from Armenia. OFID works in cooperation with developing country partners and the international donor community to stimulate economic growth and alleviate poverty in all disadvantaged regions of the world.
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Ameriabank raised $ 9.7 million from Raiffeisen Bank International and $ 7 million from Unicredit Austria Bank to provide facilities to clients engaged in international trade to become more competitive. Already in the first half of 2019 Ameriabank had attracted financial resources from large commercial banks for $ 58 million, providing 85% - annual growth.
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Armenia will develop a new segment of its industry – production of basalt fiber. According to Vahagn Vermishyan, head of the Urban Planning Committee, composite materials like basalt fibers are more powerful resources than oil and natural gas, since they have already firmly entered in the norms of innovative construction, and Armenia is among few countries that have such resources.
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Armenia is ready to welcome Georgian and Russian tourists who view the country as a transit destination. Susanna Safaryan, chairwoman of the State Tourism Committee, gave an interview to ARMENPRESS, talking about the topic. She says in 2018 Armenia hosted over 300.000 visitors from Georgia and at this moment increase in number of Russian tourists is expected due to current circumstances.
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Sanitek International has filed a lawsuit against the Yerevan Municipality. The company seeks 24.7 million drams (about $51,784) in damages. For several months, residents of Yerevan have been complaining over the failure of Sanitek’s Armenian division to collect garbage throughout the city. In the spring of this year, Sanitek was twice fined for failing to fulfill its contractual obligations.
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"Development of Organic Agriculture" winners
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ACBA Bank and NABU, one of the oldest and largest environment associations in Germany, have summed up the results of a competition announced as part of their jointly implemented program "Development of Organic Agriculture 2019-2020". The competition criteria were the applicants’ possibilities to export their certified organic products, their prospects for creating new jobs, as well as the conditions of their operation in the border areas.
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Armenia’s irrigated lands increase by almost 7.1 hectares
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In the first half of 2019 Armenia’s agricultural irrigated land has increased by almost 7.1 hectares, when compared with the first half of 2018. In the first six months of 2019, some 920 new water supply contracts were concluded with farmers. Also, the volume of water released from Lake Sevan for irrigation purposes was reduced by 30 million cubic meters to 188 million, down from 218 million released in the first six months of 2018.
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High schools in Armenia will receive 330 new laboratories, Armenian Education, Science, Culture and Sports Minister Araik Harutyunyan said on Thursday. In his words, these chemistry, physics, biology and geography laboratories will be absolutely new. “There is also the necessity to train teachers, since there was an experience – expensive equipment was provided, but it turned to mere furniture because of the lack of appropriate skills.”
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Yerevan will use solar energy under a program supported by the European Union within the framework of the Covenant of Mayors. Solar batteries will be installed on the roofs of 90 buildings. The installed systems will supply energy for interior use, elevators and external lighting, serving the residents for at least 25 years, and budget savings will enable the project to include new buildings.
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ATN AT A GLANCE
ATN is the only cross-sectoral pan-Armenian business organization counting 17 associations in 13 countries. It aims to rebuild the centuries-old Armenian trade networks by promoting new linkages. ATN provides a platform for Armenian chambers of commerce and business associations to exchange knowledge and experiences, as well as promote the economic development agenda in Armenia.
Armenian American Business Council, Armenian American Chamber of Commerce, Artsakh Chamber of Commerce, Australian Armenian Chamber of Commerce, Belgian Armenian Chamber of Commerce, Cámara Argentino - Armenia, Canada-Armenia Business Council, Chamber of Commerce and Industry of the Republic of Armenia, Chambre de Commerce et d’Industrie Franco-Arménienne, Dutch Armenian Chamber of Commerce, Groupement Interprofessionnel International Arménien, Iran Armenia Chamber of Commerce, Lebanese Armenian Business Association, Romania Armenia Chamber of Commerce and Industry, ROSARM Russia Armenia Business Alliance, Switzerland Armenia Chamber of Commerce, Union of Manufacturers and Businessmen of Armenia
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