| Weekly Business News Digest |
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Which countries are leading by the number of online shoppers? Why Caucasus wasn't catching the wave? Is Armenia bearing dramatic positive changes in the field and which startup company changed the culture of online shopping in a year by delivering more than 1,000,000 parcels in a country of 2,000,000 population? Start Up Business News made a full investigation to answer these questions.
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Singapore to exchange experience with Armenian partners
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PM Pashinyan met with President Halimah Yacob at the Istana Government Residence in Singapore. “Your visit is very important in the context of strengthening friendly relations between our countries, as well as the development of economic ties,” Halimah Yakob said, noting that Singapore is prepared to closely work and exchange experiences with Armenian partners.
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Several agreements signed between Armenia and Singapore
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Following the meeting between Armenian and Singapore prime ministers Nikol Pashinyan and Lee Hsien Loong, the governments of Armenia and Singapore have signed several documents in different spheres, including the agreement on avoidance of double taxation and preventing tax evasion, a memorandum of understanding on promoting cooperation in tourism etc.
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PM Pashinyan during his working visit to Vietnam met with Vietnsam's Prime Minister Nguyễn Xuân Phúc. Xuân Phúc expressed conviction that the Armenian Premier’s visit will boost the ongoing bilateral and mutually beneficial cooperation. He also noted that numerous Vietnamese citizens have been educated in Armenia during the Soviet era and have contributed to the country’s progress with their knowledge.
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PM Pashinyan met with the leaders of Vietnam’s Chamber of Commerce and Industry, including about two dozen major businessmen. Leaders of major companies, such as Sovico, Vingroup, Contrexim, Huang Som, Tiscovina, Hapro, Kangaroo, Voci, Constrexim Hod presented with concrete proposals to implement investment projects in Armenia.
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"Large Vietnamese business entities expressed interest in cooperation with the Armenian side. They expressed great interest in Armenian products, brandy, wine, and processed agricultural products. The agreements of PM Pashinyan should proceed to the practical stage in the fall, during the Armenian-Vietnamese business forum," PM's spokesperson Vladimir Karapetyan said.
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The Armenian government approved duty-free quotas for imported Vietnamese long-grain rice. Economy Minister Tigran Khachatryan said that the agreement on duty-free import of rice from Vietnam to the Eurasian Economic Union member countries has come into force on January 1, 2016. The agreement implies that the import of up to 10,000 tons of long-grain rice a year is free from customs duty.
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The Iranian President has tasked the country’s Ministry of Industry, Mine and Trade to start implementing the free trade zone agreement with the Eurasian Economic Union (EAEU). The Eurasian Economic Union and Iran signed the temporary agreement on free trade zone that is aimed at boosting trade between the countries through eased customs regulations, on May 17, 2018.
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The Czech Republic has completed the ratification of the Armenia-EU Comprehensive and Enhanced Partnership Agreement, Spokesperson of the Ministry of Foreign Affairs informed. Armenia and the European Union signed the Agreement within the framework of the Eastern Partnership Summit in Brussels on November 24.
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Exports to EU countries shrink 24.3% in Jan-May
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Armenia’s exports to the European Union countries in Jan-May 2019 totaled $227.7 million showing a 24.3% decline. The decline was mainly due to the reduction of exports to Romania - Armenian commodities have not been exported to that countries since the beginning of this year, also exports to Germany have shrunk 56.1%, compared with the same period a year before.
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Foreign trade shrinks 2.6% in Jan-May
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Armenia’s foreign trade turnover in Jan-May 2019 amounted to $2 851.07 million, 2.6% less than the same period a year before. Exports shrank 0.9% in Jan-May 2019, compared with the same period a year earlier, to $960.7 million, and imports were reduced 3.4%, $1 890.3 million. The negative balance amounted to $929.5 million in Jan-May 2019.
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Tourists who arrived in Armenia in the first six months of 2019 have spend 120 million USD more compared to the same period of the previous year, PM Pashinyan said. This indicator has become known after analyzing the payments with cards made by banks abroad in Armenian restaurants, hotels and different places.
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In June of the current year the two airports of Armenia served 281 992 people in total, thus exceeding the indicator of the same month of 2018 by 12.1 %. As compared to June 2018, a 15.4% increase in passenger flow was observed at Zvartnots International Airport of Yerevan in the 6th month of 2019. In June 2019 Zvartnots served 270 818 passengers against 234 737 of the past June.
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Henri Arslanian, PwC (PricewaterhouseCoopers) FinTech & Crypto Leader and the Chairman of the FinTech Association of Hong Kong, will attend the World Congress on IT (WCIT 2019) in Armenia. With over 500,000 LinkedIn followers, Henri is recognized as one of the global LinkedIn Top Voices in Economy and Finance and has been awarded many industry and academic awards over the years.
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In January-May 2019, electricity generation in Armenia amounted to 2,998.4 million kWh, with an annual decline of 7.4%. In May alone, a decline of 5.1% to 576.2 million kWh was recorded. In January-May 2019 compared withthe same period of 2018 thermal power plants reduced electricity generation by 36.4% - to 719.2 million kWh. Whereas hydroelectric power plants increased electricity generation by 11% to 1,069.3 million kWh.
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The volume of industrial production in January-May 2019 compared to the same period a year ago grew by 5.6% (against a growth of 3.3% a year earlier), reaching 733.1 billion drams ($ 1.5 billion). According to the Statistics Committee, in May the industrial output increased by 5.9% to 159.5 billion drams ($ 331.8 million), an annual growth (compared to May 2018) of 10.2%.
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The Armenian National Assembly has passed a bill that finalizes reduction of duty on scrap metal exports out of the country. The duty per metric ton of scrap metal export will be reduced from 80,000 drams to 60,000 drams. The initial version of the bill had proposed higher duty with the aim to stimulate local scrap production by limiting exports. However, the exporters have been using a loophole that allowed them to export scrap by not paying tax (60% of the exports during the past ten months) by proving that the scrap metal was of Armenian origin.
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713.4 billion drams collected in tax revenues in first half of 2019
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In the first six months of 2019 SRC collected a total of 713.4 billion drams in various taxes, exceeding the projected figure (650.7 billion drams) by 62.7 billion drams. At the same time, SRC head Ananyan says, such a high rate of tax collection in the first half of the year does not mean this growth trend will continue in the second half of the year.
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Meager growth of national debt in 2019 - $6.9 billion level maintained
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The national debt of Armenia grew by only 0.2% in the first half of 2019, not moving from the level of $ 6.9 billion (3.3 trillion drams). According to the Ministry of Finance, external debt decreased by 1.4% in the first half of the year to $ 5.5 billion (2.6 trillion drams), and domestic, by contrast, grew by 6.3% to $ 1.5 billion (705.1 billion drams).
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The 2020-2022 program of medium-term public spending was approved at a government extraordinary closed-door meeting. PM Pashinyan stressed the need to consistently implement the measures envisaged under the aforementioned spending program, and gave specific instructions to the heads of relevant departments in terms of implementing capital expenditures, attracting investments, increasing exports, etc.
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The Armenian government intends to solve housing problem in the quake areas stricken by the 1988 powerful earthquake. AMD 3 billion (around $6.2 million) will be earmarked for this purpose, PM Pashinyan said. Earlier, Vahan Vermishyan, head of the Urban Planning Committee, said that the remaining 453 families will have their housing problem solved in 2020.
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Prime Minister Nikol Pashinyan announced that on January 1, 2020, pensions would be increased by 10%. According to the finance minister about 25 billion drams would be needed for that. Apart from state budget revenues and attracted loans, there are no other sources of financing the rise," said Janjughazyan.
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Armenian government moves to boost transparency
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Currently, looking up one business record in the Ministry of Justice registry costs $7, and a land record $10. That can quickly add up for journalists, especially if they are working on a story that requires them to cast a wide net. The ministry is proposing bills that would make it free for journalists to access State Register of Legal Entities.
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Armenia not ready to switch to universal declaration of citizens` income from 2020
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Starting in 2020, the financial authorities of Armenia are not ready to switch to universal declaration of citizens' incomes. Answering the question of AmInfo, on July 9, David Ananyan, Chairman of the State Revenue Committee of Armenia, said this at a meeting with journalists.
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MTS Armenia purchases the remaining 20% of shares owned by Lebanese businessmen. According to the PSRC decision, the shares of the Lebanese Aramayo Investments company will be purchased by the public Mobile TeleSystems joint-stock company. MTS Armenia, which belongs to the Russian MTS, is among the largest telecommunications companies in the country.
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Construction of $250 million power plant kicks off
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PM Pashinyan attended a ceremony that gave start to the construction of a new thermal power plant in Yerevan. The new thermal power plant’s design capacity is 250 MW. The construction is projected to last 26 months. The service life of the facility is 25-30 years. The projected efficiency is 53% and cost is estimated at more than $250 million.
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Abu Dhabi’s Masdar to pursue renewable energy projects
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Abu Dhabi Future Energy Company (‘Masdar’) is pursuing renewable energy opportunities in Armenia. CEOs of Masdar and the Armenian National Interests Fund (ANIF), signed a MoU to explore collaboration in solar photovoltaic (PV) energy (200MW), onshore wind power (200MW), and floating solar power (100MW).
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The Zangezur Copper and Molybdenum Combine in southern Armenia announced it has begun a process to enter Armenia’s securities market with the support of Ameriabank. The company said it is going to ask the Central Bank of Armenia to register a prospectus for the issue of nominal coupon bond to the tune of $50 million and 2.5 billion Armenian drams, which is unprecedented for the non-financial organizations.
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President Armen Sarkissian visited a number of industrial enterprises in Syunik region, such as Syunik Food company specializing in the production of canned food and Marila company which produces dairy and meat products. The first one, which has 80 employees - and during the procurement period 250 - buys products not only in the region, but also in Artsakh.
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Georgian Airways has increased the frequency of flights Tbilisi-Yerevan from seven to 14 after ban on flights from Russia. From July 10, the airline starts operating direct flights from the resort town of Batumi to Yerevan. The aircraft from Batumi to the Armenian capital will fly daily until the end of the summer navigation season. Flights to Yerevan from Batumi and Tbilisi will be carried out by Boeing 737, Embraer ERJ190 and CRJ200 airplanes.
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Let's go back in time, to one of the most notable achievements in Lebanese history marked by The Lebanese Rocket Society during the early 1960s. At the time, Manoug Manougian, a mathematics professor at the Haigazian University led a group of young scientists, students and army experts to develop an infant space program for their country and launched the first Middle-Eastern rocket.
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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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