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Armenia still sees capital outflow

Commentary Materials 13 December 2017 14:57 (UTC +04:00)
Starting from January 1, 2018, a paragraph of the protocol “On the Protection and Enforcement of Intellectual Property Rights” of the Treaty on the Eurasian Economic Union (EAEC) will come into force in Armenia. It says that the principle of exhaustion of the exclusive right for a trademark is applied on the territory of the EAEC member states
Armenia still sees capital outflow

Baku, Azerbaijan, Dec. 13

By Fuad Aslanov – Trend:

Starting from January 1, 2018, a paragraph of the protocol “On the Protection and Enforcement of Intellectual Property Rights” of the Treaty on the Eurasian Economic Union (EAEC) will come into force in Armenia. It says that the principle of exhaustion of the exclusive right for a trademark is applied on the territory of the EAEC member states.

This implies prohibiting the import of any goods from a third country to Armenia without the consent of the trademark owner. For instance, if an Armenian citizen buys a car abroad with the aim to sell it in Armenia, he will not be allowed to import the car at the border checkpoint.

Armenian media are worried that this may lead to numerous negative consequences. Trademark owners can easily prohibit such kind of goods imports, and this will undoubtedly lead to a rise in the price of goods in Armenia. Therefore, many people in the country express dissatisfaction with Armenia’s membership in the EAEC.

“When our country was pushed into the EAEC, the power and its supporters in the media and expert community were ranting about the advantages of Armenia’s membership in this union, saying we would receive huge investments from Russia and Kazakhstan, lower prices for gas, oil products, food products and basic goods, including bread and dairy products,” says Armenian Report.

However, this did not happen and the situation in Armenia has not improved – unemployment, food prices increased in the country and Yerevan did not receive large investments from Moscow.

After Armenia signed the agreement on a comprehensive and expanded partnership with the European Union on November 24, Armenians again began to pin hope for foreign investments. However, their hope, most likely, is doomed to failure.

The official statistics say that during the first nine months of this year, the net inflow of foreign investments into the Armenian economy was negative – -$1.78 million. This figure was positive in the same period last year, amounting to $59.3 million. Thus, Armenia is losing capital rather than receiving it.

“We were waiting, but did not receive foreign investments neither being in the EAEC nor in advance of signing the agreement with the EU, although our authorities promised that by cooperating with both the EAEC and the EU Armenia would become an attractive market for foreign investment. Nothing like this happened,” the Armenian media wrote.

The obvious reason for this is the monopolistic nature of the Armenian economy and comprehensive corruption reigning there. Almost all spheres of the country’s economy are monopolized by a group of oligarchs. For instance, the supply of sugar in Armenia is controlled by the MP from the Republican Party Samvel Aleksanyan, former Major-General of Justice Migran Pogosyan imports bananas. The spheres of the economy are divided among the oligarchs who are close to the Armenian president.

In this regard, it is not surprising that foreign investors, even wealthy Armenians living abroad, do not want to invest in Armenia. Those who were deceived by the Armenian authorities and invested in the country’s economy, have already realized their mistake and now they are in a hurry to withdraw the invested capital from the monopolized and corrupt Armenian economy. Therefore, it is unlikely that the outflow of investment capital from Armenia will stop in the near future.

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