Thursday, September 25, 2008

Russian Armenians pledge $670mln. in Armenia investments

Diaspora businesspeople pledge $670 milion in Armenia investments
Pledges come within days of president’s appeal
by Emil Sanamyan and Yelena Osipova

– At least eight major investors, all but one of them based in Russia, have announced plans to invest a cumulative $670 million in Armenia’s economy over the next several years, Armenpress, the government news agency, reported this week.

The pledges cited an appeal by President Serge Sargsian on July 14. In an address before youth groups in Jermuk, Mr. Sargsian urged “businesspeople and well-to-do Armenians [to] be more active and imaginative in your undertakings to advance Armenia.”

The bulk of the pledges – amounting to more than half a billion U.S. dollars – came from three businesspeople, all of them Moscow-based, who have a long track record of investing in the country and have family ties with Armenia’s political establishment.

All the investors sought to present their commitments as a sign of confidence in Armenia’s development and support for Mr. Sargsian’s policies.

Although amounts made public were likely part of long-term investment programs developed before Mr. Sargsian’s appeal, by making their plans public at this time, the businesspeople sought to show support for the recently elected president still grappling with consequences of a post-election crisis.

Mr. Sargsian said since that the quick responses to his appeal were not unexpected. “I have asked and will continue to ask all Armenians to take part in the cause of achieving prosperity for the country,” the Arka news agency quoted him as saying on July 21.

The pledges made public are significant, considering that all foreign investments in Armenia totaled about $600 million in 2006, and approximately the same amount was invested in 2007.

The investors

Samvel Karapetian of the Tashir Group pledged $250 million. Mr. Karapetian’s brother Karen Karapetian is a senior member of President Sargsian’s Republican Party and is a leader of its parliamentary faction. In his letter made public this week, Mr. Karapetian pledged to invest “in the near future $200 million in business and social projects and $50 million for [a] project in Armenia which will support our statehood and serve for the coming generations.”

The sum of $150 million for “new economic initiatives,” as well as science and culture, was pledged by Ara Abrahamian of the Soglasie Group. Mr. Abrahamian, better known as head of the Union of Armenians of Russia, also has a brother in parliament: Gagik Abrahamian is a nonpartisan member of the Republican Party faction and chair of the Diamond Company of Armenia.

Another $120 million was pledged by Murad Muradian of the BAMO Group, who said he was ready to continue to invest in construction. BAMO has been a major investor in the ongoing construction boom in Yerevan and at Lake Sevan. Mr. Muradian’s brother, Harutiun Muradian, was a member of Armenia’s parliament between 1999 and 2007.

Serop Der Boghosian of the Metal Prince company is the only businessperson not based in Russia to join the campaign so far. In a letter made public on July 22, Mr. Der Boghosian pledged $50 million in investments over three years focused on the northern Lori province’s industry, tourism, and social needs. Metal Prince has been engaged in mining projects in Lori since 2000.

Another $50 million was promised “in the near future” by Russia’s Arch group of companies led by Vitaly Grigoriants. The company had reportedly already invested $30 million in Armenia’s financial, construction, and manufacturing spheres.

Other investment pledges came from Gagik Zakharian of the Uniastrum Bank ($30 million in the finance, mining, and construction spheres), Sergey Sarkisov of RESO-Garantia company (at least $10 million in insurance, health, and social programs) and Sergey Hambartsumian of Monolitnaya Arkhitektura ($10 million reconstruction of Matenadaran repository of ancient manuscripts).

The Armenian Reporter has contacted the businesspeople with requests for additional information about their investment plans, but responses were not available as of
press time.

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