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Historic ties spur Armenia and Romania cooperation

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While Armenia and Romania enjoy warm and solid relations, underpinned by shared values and expanding potential for economic partnerships, the opportunities for further development are substantial. In an interview with Business Arena, Sergey Minasyan, the Ambassador of Armenia to Bucharest, speaks about specific cooperation opportunities and outlines his key objectives as ambassador to Romania.
How would you characterize Armenian - Romanian relations and what areas need improvement?
Relations between Armenia and Romania have a solid historical basis, mainly due to the millennial presence of the Armenian community on the hospitable Romanian soil. Romania was one of the first states to recognize the independence of Armenia, and a few days later, on December 17, 1991, it established diplomatic relations with the Republic of Armenia. Since then, the bilateral relations have been developing steadily between the two countries. Over the years, more than 50 bilateral agreements and other documents have been signed with the aim of strengthening and increasing the level of our multidimensional cooperation, based on trust and confidence.
Unfortunately, the COVID-19 pandemic has also caused significant disruption to these relations, as our main programs and events have been postponed, cancelled, or had their format changed. However, we do hope that after we have overcome the crisis, we will fully resume our programs and projects, lifting our bilateral agenda to a new level.


What was the volume of bilateral trade in 2020 and what are the most traded goods between the two countries?
Economic relations between Armenia and Romania have yet to reach their full potential, especially following the coming into force of the EU-Armenia Comprehensive and Enhanced Partnership Agreement (CEPA) on March 1, 2021. Moreover, the European Union is Armenia’s second biggest export market, with a 21.9% share of the total, and the second-largest source of imports, accounting for 19.5% of the total.
As of 2020, the total trading volume between Armenia and Romania was 6.9 million USD, of which exports amounted to 6.8 million USD. Compared to the same year-before period, the total trading volume increased by 54.4%, with exports increasing by 56.3% and imports decreasing by 8.2%.
There are 65 trading companies with Armenian capital in Romania. In terms of the value of subscribed share capital, the Republic of Armenia is ranked 89th.
Romanian imports from Armenia consist mainly of food, beverages and tobacco, while Romanian exports to Armenia include mainly machinery and transport equipment, chemicals and related products as well as
furniture.

The Index of Economic Freedom by the Heritage Foundation ranks Armenia’s economy  ahead of all other Eurasian Economic Union countries and many EU countries. To what extent could that aspect attract more investors to do business in your country?
Indeed, according to the 2021 Index of Economic Freedom published by the Heritage Foundation, Armenia’s economic freedom score is 71.9, making its economy the 32nd freest in the world. Armenia’s overall score has increased by 1.3 points. Armenia is ranked 18th of 45 European countries, and its overall score is above the regional and world averages.
As for Armenia’s neighbors, Iran is ranked 168th, Turkey 76th, Azerbaijan 38th and Georgia 12th, while Armenia’s partners in the Eurasian Economic Union Russia and Kazakhstan are ranked 92nd and 34th, respectively, Belarus is 95th, Kyrgyzstan is 78th.
As you know, one of the most significant indicators for investors to establish a business in a foreign country is the index of economic freedom.
 
What are Armenia’s overall strengths as a potential investment destination?
Armenia has the potential to be considered a favorable investment destination. The main objectives of our state policy in the investment sphere focus on improving the investment environment, improving the legal framework and promoting investments in the economy of Armenia, including foreign direct investments.
One of the main goals of the Armenian investment policy is to create a conducive environment for investments and business, to increase transparency of the regulatory environment and investment sizes, to reveal the country’s competitive advantages, to create high-quality and highly paid jobs, to develop market infrastructure and human capital as well as to provide sustainable economic growth and welfare for the  population. 
The Armenian Government implements the “Open Doors” policy, liberalization of investment activities, reservation of national and most favorable treatment of foreign investors, proper protection of investors and other advanced international practices towards foreign investments, providing for full property ownership.
Armenia creates an excellent possibility for foreign investors in high tech industry and particularly in information technologies.
The recently established “Investment Support Center” Foundation housed in the Ministry of Economy of Armenia has a task to promote foreign investment in an efficient and streamlined manner, and to provide full support to foreign business people in Armenia in a number of areas:
- Providing information on Armenia’s investment opportunities and conditions, including
government incentives and other procedures;
- Support in all investment procedures and support in relations with various state authorities;
- Consultancy on resources required for investment, including existing land and another real estate, state-owned property, co-financing sources, and potential resident partners;
- Providing investment projects to potential investors according to their interests;
- Ensuring immediate response to problems arising during investment activities.
The investment policy, by the way, is one of the spheres where the existing Romanian experience might be very interesting and valuable for the Armenian side.

With its contrasting landscapes, rich history and culture, Armenia could be an attractive destination for Romanian tourists. To what extent could the two countries develop their tourism cooperation?
Armenia is a unique tourism destination with a huge and diverse cultural heritage as well as tremendous landscapes. Armenia’s countless tourist destinations provide opportunities for different kinds of tourism such as recreational, rural, ecological, spiritual, religious, cultural, and more, both in the regions and in the capital, Yerevan.
Tourists are especially attracted to the pearls of millennium-old Armenian cultural and historic heritage, medieval monasteries, churches, fortresses and castles located on the territory of Armenia, some of which have been included in the list of UNESCO World Heritage sites. One of those sites is the Holy Echmiadzin, which is visited by thousands of tourists every year. As you may know, Armenia was the first country in the world that adopted Christianity as a state religion (301 A.D.). According to the legend, Jesus Christ descended from Heaven and indicated the place for a church to be built. At the beginning of the 4th century, King Trdat III and Saint Gregory the Illuminator built the Holy Echmiadzin (“The Descent of the Only Begotten Son”) Cathedral, which is now the religious center of Armenia.
Besides that, the landscapes and nature of the Armenian Highland provide with numerous possibilities for lovers of adventure tourism, such us hiking or trekking in picturesque mountains (on average higher than in Romania, the highest peak being Mount Aragats, with a height of 4,090 meters), gorgeous canyons and deep gorges in the warmer seasons, as well as winter ski resorts for colder periods of the year.
Armenia offers its visitors numerous festivals throughout the year, from wine tasting to several cooking masterclasses, special classes for weaving the famous Armenian carpets or baking Armenian flatbread (lavash), the tradition of which has been inscribed on the UNESCO Intangible Cultural Heritage List as an expression of Armenian culture.
Armenia has plenty of wonderful places to visit and admire and each Romanian tourist will find something close to their heart!

Armenia has a large diaspora, including an important Armenian community in Romania. To what extent can that help consolidate the bilateral ties between the two countries?
As I already mentioned, for centuries Armenian and Romanian peoples have shared a unique relationship, thus providing a strong base to further develop Armenia-Romania relations.  
We all know that the historical Armenian community in Romania played an important role in the political, economic, cultural and educational life of the country. It is worth mentioning once again the privileged position the Armenian community in Romania, both as an ethnic and religious minority, and as an integral part of the Romanian society, which serves as a bridge between the two countries delivering tangible benefits to our peoples.
 
To what extent has Armenia’s economy been affected by the COVID-19 pandemic? What measures have been taken in order to help the economy get back on track? 
The COVID-19 pandemic has reached almost every country in the world and Armenia is no exception. The outbreak in Armenia was rapid and the state of emergency was long-lasting for the entire country. This has severely affected key economic sectors and services in the country such as agriculture, industry and tourism.
Due to the coronavirus pandemic, the gross domestic product decreased (-5.7%) in the first half of 2020, mainly because of declines in the processing industry, accommodation and food services, as well as trade sectors.
In January-August 2020, the economic activity index was -6.4%, compared to the same period of the previous year. The decline was due to the decline in services (-10.8%), trade (-11.5%) and construction (-19.1%).
The effects of the global economic slowdown, indeed, were reflected in the Armenian economy, especially in the demand for Armenian exports. Over January-August 2020, the export volume of goods amounted to 1,567.9 million US dollars, decreasing by 106.4 million US dollars or 6.0% compared to the previous year. Commodity export values decreased mainly due to the following products:
- Cognac: the decline was -26 million US dollars or -18.8%,
- Iron smelting: the decline was -7.6 million US dollars or -28.4%,
- Diamond stone: the decline was -19.5 million US dollars or -53.1%,
- Smoking: the decline was -15.5 million US dollars or -9.6%,
- Jewelry: the decline was -15.3 million US dollars or -52.4%.
As I already mentioned, the tourism industry is one of the most affected sectors of the Armenian economy. In January-June 2020, the number of tourist arrivals amounted to 331.264, which is 60% lower compared to the same period of 2019.
In order to successfully overcome the challenges raised by the spread of the COVID-19 pandemic, the Government of the Republic of Armenia took the appropriate measures, such as the adoption of “The package of comprehensive measures to neutralize the economic effects of the coronavirus” that provides a partial solution to the problems.

What major objectives would you like to have achieved by the end of your term in Bucharest?
Since the first day of my tenure in Romania I outlined a few priorities to organize the Embassy’s work: to deepen and broaden our political dialogue and multicultural ties with the Romanian government, to promote people-to-people contacts, including civil society and export community representatives, to promote and expand economic, trade and business relations between the two countries, to promote key Armenian policy goals in Romania. I am determined to continue along the path of achieving the major priorities I have set.

This is also available in our print edition of Business Arena.

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