Armenia is initiating a charm offensive in the city in an effort to entice British investment.
Diplomatic Efforts and Distancing from Russia
This week, the country’s economy minister and diplomats met with key banks in the city as the nation attempts to distance itself from Russia.
Promoting Economic Ties with the UK
Former HSBC financier and Armenian Minister of Economy, Vahan Kerobyan, has been circling the capital of the United Kingdom in an effort to foster closer relations between the two nations.
Geopolitical Reorientation and Economic Growth
Armenia, situated in the Caucasus region between Russia and the Middle East, seeks to realign its geopolitical orientation and strengthen its ties with Western financial centers in the wake of the conflict in Ukraine.
Although not a significant trading partner of the United Kingdom, the value of products and services traded between the two countries has been experiencing substantial growth. The value of commerce between the two nations increased by 156% year-over-year to £92 million in 2018.
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The government, according to Kerobyan, hopes to increase this to approximately £1 billion within the next three years, preferably with the assistance of Western bank investments.
In addition to meeting with his former employer, HSBC, the delegation yesterday scheduled a meeting with the US banking behemoth, JP Morgan.
“We must certainly broaden our economic connections,” he stated.
At this time, there are no plans to list Armenian companies on the London Stock Exchange; however, according to Kerobyan, this could change in the future.
Armenia’s Technological Ambitions
The government is eager to promote its Yerevan-concentrated technology sector. It has been considered a technological center since its time as one of the constituent republics of the USSR when it functioned as a research center. Historically, it was designated as the “Silicon Valley of the Soviet Union.”
Kerobyan notes that multinational technology behemoths, including computer processor manufacturer Nvidia, IT behemoth Oracle, and communications behemoth Cisco, all maintain a presence in Armenia and are currently vying for that crown.
Additionally, the minister emphasized Armenia’s substantial copper reserves, which are crucial for renewable energy and electrification, and its ‘thriving’ solar power sector.
Economic Resilience Amid Regional Challenges
Additionally, recent regional events have bolstered Armenia’s determination to expand its economy. After Azerbaijan annexed Nagorno-Karabakh last month, Armenia is hosting 100,000 people in refugee camps.
However, despite the escalation in the area, Kerobyan stated that the invasion of Nagorno-Karabakh would not jeopardize the fiscal stability of Armenia.
He mentioned that S&P Global Rating, a prominent US rating agency, had upgraded the country’s credit rating in August in response to an influx of Russian professionals. As a result of the emigrations, the IT industry expanded by 51% in the previous year.
