Armenia is ranked 88th in the Forbes List of Best Countries for Business. United Kingdom tops the list followed by New Zealand and the Netherlands.
“Under the old Soviet central planning system, Armenia developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics, in exchange for raw materials and energy. Armenia has since switched to small-scale agriculture and away from the large agro industrial complexes of the Soviet era,” Forbes writes.
The publication reminds that Armenia has only two open trade borders – Iran and Georgia – because its borders with Azerbaijan and Turkey have been closed since 1991 and 1993, respectively, as a result of the ongoing conflict with Azerbaijan over Nagorno-Karabakh.
According to Forbes, “The government has made some improvements in tax and customs administration in recent years, but anti-corruption measures have been largely ineffective. Armenia will need to pursue additional economic reforms and strengthen the rule of law in order to raise its economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from Turkey and Azerbaijan.”
“Armenia’s geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to deteriorations in the global commodity markets and the economic challenges in Russia. Armenia is particularly dependent on Russian commercial and governmental support, as most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector. Remittances from expatriates working in Russia are equivalent to about 7-8% of GDP,” according to Forbes.
Armenia joined the Eurasian Economic Union in January 2015, but has expressed interest in expanding its economic ties with the European Union as well, and in March 2017 an EU-Armenia Comprehensive and Enhanced Partnership Agreement was initiated.