Andrei Spilenko summarized the results of the project “Increasing the investment attractiveness of Free Economic Zones in the Republic of Armenia through the mechanism of cluster policy” by support from UNDP Armenia
From June till September 2022, an international consultant - director of the Association of clusters, technology parks and SEZ of Russia Andrei Shpilenko was implementing the project “Increasing the investment attractiveness of Free Economic Zones in the Republic of Armenia through the mechanism of cluster policy” by support from UNDP Armenia.
As part of this project, a set of analytical activities was carried out:
- global international trends and strategic planning documents of the Republic of Armenia were analyzed, and as a result, the following three prospective industries in Armenia were identified: pharmaceutical, food, radio-electronic;
- a survey of 115 core industrial enterprises was conducted using the “Oncoming Waves” method to assess the possibility of creating industrial clusters and identify investment niches;
- an analysis of free economic zones was carried out for compliance with the global challenges and key success factors for infrastructure sites proposed by UNCTAD.
As a result of the activities carried out, the expert Andrei Shpilenko obtained the following results:
a) cluster mechanism for priority industries is outlined in the legislation of the Republic of Armenia, however there are no definitions and requirements for industrial clusters in the legal and regulative framework;
b) the high dependence of the industry of the Republic of Armenia on the import of raw materials and materials in all stages of industrial production. This, on the one hand, poses a threat to the effective development of the local economy and, on the other hand, creates a significant number of investment niches for investors in the local market;
c) the legal and regulative framework of the Republic of Armenia provides a possibility of providing financial support to industrial enterprises, however in the legislation there are no instruments of state support aimed at a targeted increase in the added value of products manufactured in the territory of the Republic of Armenia;
d) the Republic of Armenia takes into account the best global experience in attracting investments through the mechanism of creating free economic zones. However, the free economic zones (FEZы) of the Republic of Armenia do not correspond to the model of a successful infrastructure platform that meets the current global challenges and is oriented towards sustainable development goals;
e) there are no instruments in the legislation of the Republic of Armenia aimed at stimulating investments in the development of FEZ infrastructure.
In order to increase the investment attractiveness of free economic zones in the Republic of Armenia through the mechanism of cluster policy, international expert A.V. Shpilenko proposed the following activities:
1. Introduce the definition and requirements for industrial clusters into the legal field of the Republic of Armenia;
2. Create a project office that analyzes the production chains of the industry of the Republic of Armenia and the markets of friendly countries in order to prepare proposals for the placement of investment projects on the basis of the Armenian FEZ;
3. Develop and conduct training programs on the creation and development of successful infrastructure sites and industrial clusters in cooperation with UNDP;
4. Develop tools for the state support of investments in the infrastructure of free economic zones, aimed at reducing their payback period;
5. Develop the state support tools for cluster members which are implementing investment projects aimed at increasing the added value of products created in the territory of the Republic of Armenia;
6. On the basis of the FEZs, launch a pilot project on creation a model of a successful infrastructure site that meets the current global challenges and is focused on sustainable development goals.