Swept into power on the back of Armenia’s peaceful democratic revolution in 2018, the government of Prime Minister Nikol Pashinyan achieved several monumental milestones in its first 100 days in office, and is now laying deep foundations for the future. For the first time in 12 years, more Armenians are coming back to their homeland than those leaving, and economic growth is now set on a stable course. Here, Prime Minister Pashinyan explains how he is preparing his country to transition from a political to an economic revolution.

Having been elected Prime Minister in May 2018 following a peaceful revolution, you have been credited with ushering in a new era for Armenia. What is the greater significance of Armenia’s revolution and its peaceful democratic transition?
Our revolution was born as a result of a huge public demand for democratic transformation. It was an exclusively home-grown phenomenon and didn’t produce any geopolitical implications. However, I don’t mean that democracy didn’t have any impact on our foreign policy; there is no doubt that it strengthened Armenia’s position in international affairs and enriched our foreign policy with important values, principles and interests. The revolution was made by the Armenian people as a manifestation of their will to reject corruption, abuse of authority, a monopoly of economic and political power, electoral fraud and political manipulation. Therefore, the new Armenian government began its first days in office by embarking on implementing robust reforms to solve the problems that drove our people onto the streets and triggered mass protests in Armenia. As a result, today Armenia is in much better shape for trade and economic cooperation, as our government has made significant progress in the fight against corruption, consolidating the rule of law and establishing conditions conducive for doing business and attracting foreign investments. I am confident that the reform agenda shaped by the revolution will open up new prospects and opportunities for cooperation with our partners, including those from our region.

We are a small country. But, we are a nation with a wide and global network, which makes us great

With an unprecedented level of legitimacy, Armenia’s government has been redesigned with several ministries being removed. Why were these ministries dissolved and how is this new government designed to better prevent corruption?

There were simple reasons behind our decision to reduce the number of ministries. One of the goals of our reform agenda is the optimisation of public administration and the establishment of more efficient and less costly government institutions. Reduction of the number of ministries will help us meet this goal and enhance the efficiency of our government.

A cornerstone of your mandate is to guide Armenia from a political revolution into an economic revolution. What is your economic development strategy, and how are key sectors such as technology, energy and tourism enabling growth in post-revolution Armenia?

I believe our reforms are long-term and strategic. Therefore, the economic revolution will have a long-lasting effect on the country’s economic development and people’s lives. Meanwhile, let me share some already recorded results with you. In 2018, we registered a 5.2% economic growth rate and maintained a moderate inflation rate. These are very positive results for a year that saw a revolution. We have also had a 9% increase in exports. The positive dynamics are continuing this year with 6.5% growth recorded in the first half of the year. In August 2019, Moody’s upgraded Armenia’s credit rating to “Ba3”. These results are promising; however, there is much more that needs to be done.

Armenia provides an excellent opportunity for investors in areas such as information technology, tourism, agriculture, manufacturing, energy and many others. Our government implements an open-door policy towards foreign investments, providing for full property ownership. Foreign investors can have free access to any sector and geographic location within the country with no restrictions on personnel recruitment, free and unlimited repatriation of profits, unlimited currency exchange on market rates, and guarantees against nationalization. The five-year grandfather clause protecting foreign investors against investment-related legislation changes is also a part of our foreign investment framework. With regard to international economic relations, Armenia has bilateral treaties on investment promotion and protection with 43 countries, including the United States. Armenia is a member of the International Centre for Settlement of Investment Disputes. We have treaties on the avoidance of double taxation and the prevention of fiscal evasion with 46 countries. This means that the investors are granted a number of guarantees – in particular, national treatment, protection from expropriation, free transfer of means and full protection and security.

According to the World Bank, Armenia is ranked 41st out of 190 countries for its ease of doing business. In terms of ease of starting a business, Armenia is 8th in the world, and 14th for registering a property. According to the Index of Economic Freedom, Armenia is the 47th freest economy in the world. We are continuing to carry out deep and comprehensive reforms to improve our business environment. The government is working on legislative reforms to establish a most-favoured-nation regime to define the guarantees provided for foreign investors, as well as to introduce effective dispute settlement mechanisms. We are currently working on expanding opportunities and clearly defining the legal framework for public-private partnerships.

“Armenia is a small, landlocked country” is a description that you may find in many books and articles. Well, I agree, we are a small country. But, we are a nation with a wide and global network, which makes us great. Armenia is located in a place that bridges cultures and economies. Some may claim that Armenia has a small market, but I am here to challenge that view. Armenia is a part of the Eurasian Economic Union market that has over 180 million consumers. Armenian producers also benefit from GSP+ preferential treatment with the European Union, and GSP with the United States and some other countries. Armenia is also deepening cooperation with the European Union through a Comprehensive and Enhanced Partnership Agreement. This ambitious agreement provides a framework for Armenia and the EU to work together for the benefit of the citizens of Armenia in the areas of strengthening democracy and human rights, creating more jobs and business opportunities, fairer rules, more safety and security, a cleaner environment, as well as better education and opportunities for research.

Today, Armenia’s relations with the UAE occupy a prominent place among our foreign policy priorities

One of the most important outcomes of your first 100 days as Prime Minister was that more people started coming to Armenia than those leaving it. How are new economic policies supporting your emigration prevention campaign?

It should be noted that for the first time in over 12 years, arrivals exceeded departures in Armenia in 2018, with a positive balance of 15,313. Emigration is down; the relevant index has improved 32 times this year as compared to 2015. In the meantime, we have a balance of minus 2,334 for the first six months of this year. Our goal is to prevent emigration and promote immigration. The past experience shows that immigration goes up when the economy grows in the country and new jobs are created. This was the case in the Soviet era. I am convinced that our government’s policy and the economic revolution will propel immigration. Our task is to provide the necessary conditions for citizens to work and create, and we are steadfast on that path.

What are your final thoughts on why now is the moment that UAE investors should take notice of Armenia?

We will be pleased to see more UAE investors getting involved in Armenia, and therefore, we stand ready to discuss investment opportunities in various fields. I have already mentioned the conditions offered by the Armenian government, especially with regard to investors. We can make effective joint investments with our partners in advanced technology, agriculture, industry and more, and I am now urging UAE investors to explore the opportunities and conditions offered by the Armenian economy. Armenia can also be a favourable bridge and a connecter for the UAE to the EAEU market.

We have been developing an effective and comprehensive partnership with the UAE since the establishment of diplomatic relations in 1998. Today, Armenia’s relations with the UAE occupy a prominent place among our foreign policy priorities. Armenian-Emirati cooperation was progressively promoted by the first session of the Armenian-UAE Intergovernmental Joint Commission held in Yerevan in May. It is a productive platform for exchanging views on the opportunities and prospects of developing and extending bilateral cooperation and expanding the legal framework in various spheres of economy. Among the tangible outcomes of the Joint Commission work, we can highlight the signing of the Memorandum of Cooperation in the sphere of renewable energy between Abu Dhabi’s Masdar company and Armenian National Interests Fund, as well as the Memorandum of Understanding between the Central Bank of Armenia and Abu Dhabi Global Market.

We believe that the Intergovernmental Joint Commission is an important instrument for the effective implementation of agreements, for the activation of economic ties between the two countries, including business forums in B2B and B2G formats, mutual visits of businesspersons and investors from both sides, besides participation in various expos and exhibitions. We truly appreciate the recent positive tendencies in trade turnover between the two countries. The UAE is a reliable and trustworthy partner in the spheres of trade and investment for us, and also an important hub to help Armenia reach the Gulf region and Asian countries. At the same time, there is a huge potential for cooperation in the fields of agriculture, information technology, chemicals, real estate and mining, none of which has yet to be properly utilised. We welcome UAE multi-sector investments in the Armenian economy, and we are ready to provide all necessary facilities for Emirati companies investing in Armenia.