Tourism
Armenia is a unique tourism destination with a rich and diverse cultural heritage that provides dynamic opportunities for developing tourism markets. The country features an abundant variety of cultural, natural, and historical sites, six UNESCO World Heritage sites, medieval monasteries, churches, and fortresses. Over 2,000 hospitality companies work in Armenia, including hotels, B&Bs, restaurants, transportation companies, tour operators, and travel agencies. Armenia’s key geographical markets are France, Germany, Russia, Iran, and the United States.
The State Tourism Committee of Armenia was established in 2016 as the policy making agency for tourism in Armenia. It has adopted a strategy for tourism promotion which highlights the different areas of tourism within Armenia including recreational, rural, spiritual, and cultural. Over the past five years, Armenia has seen considerable growth in its tourism sector as a result of a more focused government policy toward tourism development as well as through numerous private sector initiatives.The Tatev Revival Project implemented through a public-private partnership, between the Armenian Government and the Ruben Vardanian and Veronika Zonabend (RVVZ) Foundation is one of the key projects in the tourism sector. The Project includes restoration and preservation of the thousand year-old Tatev monastic complex and the establishment of infrastructure based on local community needs to enable tourism promotion.
Information Communication and Technology
Armenia has a growing information and communications technology (ICT) sector. Numerous international companies employ Armenians specializing in software development, industrial computing, electronics, and semiconductors. The sector has recorded significant growth in recent years and seen a continuing expansion of new companies and hiring as Armenia continues to increase its presence in global value chains. The number of firms actively operating in the ICT space exceeds 3,000, employing more than 20,000 workers, and yielding more than one billion dollars annually. The ICT industry has been growing at 20 percent annually, which may increase further driven by the arrival of thousands of new foreign high-skilled IT workers following Russia’s further invasion of Ukraine.
There are several notable business areas within the Armenian ICT realm, including: customized software, web design and development, IT services and consulting, mobile app development, chip design and testing, computer graphics and multimedia, and games. Emerging business areas coming into view or already in development, including data science, artificial intelligence, quantum computing, and electronic design automation. These are of particular interest to Armenia as ICT companies explore opportunities to sustain aggressive growth.
Pharmaceutical
The Armenian pharmaceutical market stands as a vibrant and rapidly expanding sector within the Armenian economy. With relative growth rates, this industry has witnessed significant advancements in recent years. Recognizing the importance and potential of the pharmaceutical sector, the Armenian government has identified it as one of the five priority development areas in their comprehensive Government Action Plan for 2021-2026. This strategic focus underscores the commitment to fostering the growth and prosperity of the pharmaceutical industry in Armenia. A dynamically growing branch of the Armenian economy that offers a lucrative opportunity for investors seeking to capitalize on the growing demand for affordable and quality generic pharmaceuticals.70 % of the costs of clinical trials market are workforce-related and Armenia with its cost-effective, qualified workforce could offer relevant advantage over its regional competitors. The industry possesses significant R&D capabilities, supported by abundant scientific and human capital resources, with the potential to participate in the complete cycle of processes. The Armenian pharmaceutical market has witnessed significant growth in recent years and continues to demonstrate strong potential with an estimated value of around $220 million. Armenia’s location offers strategic advantages for pharmaceutical companies. The country serves as a gateway to both regional and international markets, providing access to a wide customer base.
Agriculture
Armenia’s agriculture and food systems face multiple challenges related to climate, environment, and competitiveness, with additional difficulties stemming from being a landlocked nation. In the coming decade, a reduction in the seasonal distribution of rainfall is predicted, which will cause a significant drop in the productivity of rainfed crops. Yields from irrigated agriculture are also projected to fall.While the agriculture sector in Armenia is vulnerable to the effects of climate change, it is also a cause of climate and environmental issues, contributing 22.3% of national greenhouse gas (GHG) emissions – of which 60% are generated by livestock. To tackle these impacts the agriculture sector needs to incorporate appropriate climate adaptation and mitigation measures, coupled with sound environmental management.
Given that these challenges affect a wide range of stakeholders – including the public and private sectors across regions and value chains – the World Bank Group has been helping the government to advance a forward-looking strategy and a coordinated and collaborative approach to incorporate climate considerations into its economy. In the Spring of 2024, the World Bank partnered with Armenia’s Ministry of Economy (responsible for the agriculture sector) to bring together stakeholders from different ministries and agencies to share knowledge, lessons learned, and discuss an integrated approach for planning and identifying public investment priorities.
Energy
Washington, June 3, 2024 — The World Bank’s Board of Executive Directors approved $40 million in support of the Enabling the Energy Transition project for Armenia, which will assist the implementation of the Energy Sector Development Strategy to 2040 of the Republic of Armenia. The investments will focus on the rehabilitation of power transmission substations, the adoption of reforms to allow the transmission company to access private financing, and the promotion of energy sector modernization as well as regional energy cooperation among emerging and developing economies in the Europe and Central Asia region.
Armenia’s power sector is heavily dependent on imported fuels, especially natural gas, which creates significant energy security risks, compounded by the global energy crisis. Attracting private investment is essential to fund the large-scale projects needed in the sector. In 2021, 62 percent of Armenia’s total energy supply came from natural gas, followed by oil (16 percent), nuclear (14 percent), and hydro (5 percent), whereas the share of nontraditional renewable energy sources (wind and solar) was only about 1 percent.
Infrastructure
In order to sustain economic growth, Armenia needs to invest in infrastructure – much of this on a commercial basis given the limited fiscal space available and high level of public debt. The private sector has actively participated in infrastructure investment in Armenia, notably by way of divestiture, concessions, lease, and management contracts. Armenia’s infrastructure finance agenda touches upon three key dimensions: (a) the origination of an abundant, mature pipeline of bankable infrastructure projects, (b) a business climateconducive to commercial investment in infrastructure, and (c) the availability of long-term financing for infrastructure projects. The Ministry of Economic Development and Investments of RA in collaboration with the Development Foundation of Armenia has launched a new platform for investment projects – www.investmentprojects.am. The aim of the website is to attract investments to the Republic of Armenia, to present the existing projects in Armenia to potential investors and to contribute to the implementation of investment projects in Armenia.