President Serzh Sargsyan and President of France Francois Hollande took part in Armenian-French economic forum

President Serzh Sargsyan and the President of France Francois Hollande having arrived in Armenia on a state visit today took part in the Armenian-French economic forum and made statements. The Presidents of Armenia and France also answered the questions of the forum participants.

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Statement by President Serzh Sargsyan at opening ceremony of Armenian-French economic forum

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President Serzh Sargsyan answered questions of participants of Armenian-French business forum

Philippe Gautier, General Director of the French Employers’ Union- As we know, in the near future Armenia is going to join the Customs Union which will give Armenian companies an opportunity to penetrate into the Customs Union’s 200-million consumer market on a simplified procedure. What advantages will French companies have in cooperating with this market with the help of Armenia and in this sense what is Armenia going to do to attract French companies?

Serzh Sargsyan: “We should do everything to underpin Armenia’s investment attractiveness. I think that the possible membership in the Customs Union renders the Armenian economy and Armenia as an investment environment more attractive. In fact, you already mentioned about 200-million market and I would like to add that today Armenia also makes use of the Generalized System of Preferences (GSP+) which means that any Armenian enterprise will take the advantages of an 700-million market. In addition, the membership in the Customs Union provides Armenia an opportunity to import power-generating materials at competitive prices which is a great stimulus. The fact is that the Customs Union’s member countries can acquire petrol, gas and other goods at a 30-percent discount. We perfectly understand that in order to underpin Armenia’s attractiveness we should remove market barriers and put an end to its marginalization from large markets. The membership in the Customs Union solves exactly such issues. I would like to draw your attention to the fact that some people unaware of the government policy and its details try to spread news that the membership in the Customs Union may impede the investment process since customs duties are going to be imposed on certain goods, including raw materials. I would like to note that firstly, we have already made arrangements concerning main raw materials and goods in the negotiation process. Secondly, the Armenian government has instruments to encourage investors in case if there are some changes pertaining to the import of raw materials over time. I mean you should not worry about it. Armenia offers foreign and first of all French businessmen to register an enterprise in 30 minutes and find young specialists fluent in several languages and taking into account that the average salary in Armenia is not high and comprises 300 Euros, I think that Armenia is a good place to do business. Furthermore, we have large business projects, including the construction of a copper foundry in Armenia which is a huge project even for big companies. The point is that beginning this September Armenia is going to produce 80-100 thousand tons of copper concentrate which already requires a huge recycling process. Among small projects, I will mention greenhouse construction and the experience in agricultural food production. We are ready to pay more attention to this in order to support French businessmen.”

Francis Gelibter, General Director of Orange Armenia- Mr. President, the companies in Armenia appreciate that you and the Armenian government display interest in promoting innovative technologies in Armenia.

Could you present the various measures the Armenian authorities are going to take in order to give an impulse to the high technology production sector and the promotion of services in that sector?

Concerning the internet improvement, will you encourage the government to continue introducing the electronic management system at central, territorial and urban levels?

If yes, do you think that companies having French assets, such as Orange, will have a chance to involve in introducing electronic management systems?

President Serzh Sargsyan: “Firstly, we are glad that Orange is in Armenia and expands its services year after year. On one hand, it provides qualified services to our population and on the other hand, it is slowly entering the pure business sector in order to earn back its investments. It is obvious that effective management and the contemporary mode of life are not possible without applying modern technologies. That is the reason the Armenian government has adopted the so called electronic management model, and year after year technologies are applied in various sectors very effectively. I can bring the example of tax accountability - the electronic tax payment system, as well as the cadastre sector, some other sectors such as the procurement sector, the enterprise registration sector and numerous other sectors. As a result, we will have an electronic government and the transition to this will be made through public contests and we will be very happy if Orange participates in those contests in order to win and contribute to the formation of the electronic government. We consider that we have achieved certain successes in this sector, but on the other hand, we strongly believe that we are far from developed countries. It is exactly this gap that we should fill up and we are committed to doing so. I want to reiterate that we are ready to offer individual instruments to our investors. At least Orange knows about it. Armenia is so small a country and its economy is so limited that both the Armenian President and Prime Minister, not to mention the government members, will always find enough time even for medium investors in order to get familiar with their concerns and try to support them until the state system fully functions.

Hovik Musayelyan, Director of Synopsys Armenia - Synopsys is an American company specializing in world’s leading microchips’ design and over the last ten years it has invested in Armenia latest technologies worth a few hundred million dollars, and now we are Armenia’s number one IT employer with our one thousand-member team. I would like to add that our employer is more than satisfied with doing business in Armenia since it can make a high-quality intellectual product at a low cost price. I want to direct my question to both presidents. Distinguished Mr. Presidents, it is a well-known fact that driven from geographical and geopolitical realities Armenia mainly emphasizes high-value productions such as information and communication technologies, robotics, pharmaceutics and other sectors of the same type. France is among world’s leading countries which regularly applies innovative technologies. In your opinion what steps should the governments of the two countries take in order to raise the cooperation in these sectors to a new development level, as well as to stimulate the foundation and promotion of the two countries’ joint enterprises?

President Serzh Sargsyan: “Mr. Musayelyan, the short answer is that we should continuously improve the business environment. This is the way to not only make investment conditions attractive but also to foster Armenia’s economic development. As for innovations, you clearly know from my previous statements and I reiterate that the government of the Republic of Armenia is eager to grant additional privileges, such as a long-period corporate tax exemption, to companies making innovative products. We can make other offers as well. The point is that we should find such companies, encourage people with our projects, inspire confidence in us so that they come and make new products in Armenia. This is our key objective.”

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Statement by French President Francois Hollande at opening ceremony of Armenian-French economic forum

Distinguished Mr. President,
Honorable Mrs. and Mr. Ministers, Parliamentarians,
Respected Mrs. and Mr. Directors of Armenian and French enterprises,

It is the first time such a meeting is organized in the framework of a French President’s visit to Armenia.

High-level political meetings have periodically taken place between our countries for many years.

However, till now we have not had an opportunity to display political will for the benefit of establishing new business ties and partnerships. Today, we have such a chance in the framework of my state visit to Armenia.

Following distinguished President Serzh Sargsyan’s example, I would like to emphasize once again that numerous French companies have been operating in Armenia since a long time. They have made investments and have promoted successful activities in your country. By this I refer to such French companies as Pernod Ricard, Credit Agricole, Carrefour, Orange, French Airlines, Bureau Veritas Armenia and many other companies mentioned by the president.

In October 2013, during President Serzh Sargsyan’s visit to France we made an arrangement for organizing today’s forum and my visit to Armenia, as an important step to further reinforce the Armenian-French economic relations.

It is necessary to improve the Armenian-French economic indicators even if we consider that France is Armenia’s largest European investor.

Since 2007, French investments in Armenia have comprised more than half of the investments made by the EU countries. However, according to the statistics they are very modest – 120 million euros annually.

Of course, the aforementioned French companies promote activities in Armenia in the sectors of agricultural food production, banking, telecommunication, transport and everyday food sales. Nevertheless, our trade circulation accounts for 50 million euros annually. France is Armenia’s 10th importer with its two-percent share in the local market.

On one hand, taking into account the friendship between Armenia and France, as well as our participation in a number of events in Armenia and France which are the illustration of that friendship, the 500000-member community living in France and on the other hand, having such modest economic results, we understand that we have a long road to cover in terms of economic cooperation.

Today’s event is the road we have decided to cover together. I am glad that the delegation which is accompanying me includes French deputies which are governors of local authorities at the same time. It is a praiseworthy fact that they also pledged themselves to fulfill the above-mentioned goals.

What should we do? First of all, we should make the Armenian market and its opportunities much more popular. The French embassy in Armenia should also play a role in implementing the French economic diplomacy in Armenia. Likewise, French Ubifrance agency authorized to promote French enterprises internationally should also be active.

We should provide French companies with comprehensive information in order to simplify their establishment procedures in Armenia. We should make the abovementioned steps as easy and transparent as possible for our two countries in order not to impede any trade project and not to have any lack of information. We should exclude the loss of time on the road from economic decision to its realization.

There is also an Armenian-French business club in Armenia which has been involved in organizing this forum as well. It should strengthen its position in a short period of time.

Concurrently, I have asked the representatives of the Armenian community in France accompanying me during this visit to help Armenians of France to be engaged in those works as well.

Moreover, I think that numerous Armenian entrepreneurs of France should bring their experience and skills to Armenia displaying their patriotism.

Armenia’s dynamic development is impressive and we talked about it with President Sargsyan. Nevertheless, the growth rates are limited.

Accordingly, we ought to help the Armenian economy with certain amount of production, technology and skills by means of establishing business ties between Armenian and French enterprises.

I have instructed the French Development Agency to finance a number of programs in Armenia –apartment, infrastructure, agriculture and especially irrigation. Certain agreements have already been concluded in this cooperation sectors and are going to be signed in the future as well.

At the same time, I want to make joint efforts at improving the attractiveness of the Armenian economy. I know, Mr. President, that you pursue that goal by making economic reforms in Armenia.

Economic reforms should be carried out both in France at our own pace and in Armenia.

Often reforms are linked to Europe. However, they should be carried out regardless of the European prospect. We need reforms because they raise countries’ competitiveness and attractiveness. Reforms should be implemented in order to economize and to make larger investments in other promising sectors.

Indeed, Armenia is also striving for Europe which we reaffirmed in 2013 at the Eastern Partnership Summit held in Vilnius.

I am attentive to not let Armenia stuck between two choices which will finally lead to your country’s conflicting interests.

Moreover, we have talked about it with the Armenian President in October 2013 during his last visit to France and on the road to here.

We should establish a Europe-Armenia cooperation association in a way which will not contradict to the Russian-Armenian collaboration in the framework of the Customs Union.

I think we can find a reasonable and exclusive model for Armenia which is simultaneously linked to its geopolitical environment and which wants to participate in a common European program in the areas of human rights, political dialogues and cooperation on democratic processes.

The cooperation with Europe should also stimulate new investments in Armenia. France can champion for this process since it is committed to it.

France is a pioneer in numerous issues related to Armenia. Economic cooperation with Armenia should be included in those issues as well. The striking illustration of this is the groundbreaking ceremony of the one of the largest French companies Carrefour which will take place tomorrow.

Carrefour will give local producers an opportunity to earn their own living and will fully integrate in the Armenian food and everyday goods market. It is a highly encouraging step and we are going to visit Carrefour together with the Armenian President to get familiarized with French and Armenian goods offered for sale.

I want other French companies to follow Carrefour’s example in order to make investments in your country in many other sectors.

We should keep the pledge of attracting new investments in Armenia

Armenia also needs relevant human resources and technical specialists to foster the development of your country. This is important for Armenia and France.

They often think that establishing a company in a given country is sufficient for stimulating trade circulation and investments. No. We should set the stage for expected outcomes by training the best personnel, technical specialists and relevant workforce.

For that reason, I want to reinforce the French presence in Armenia in terms of personnel training by resting upon existing mechanisms, namely upon French University in Armenia.

I want Armenia to establish personnel training centers with the help of French companies.

Ladies and gentlemen, in light of our friendship and meaningful political relations I expect them to get an economic meaning as well.

We think that Armenia is standing before the choices which should lead it to accelerated development. Armenia is in a complex geopolitical situation. In life, finding common language with yourself is hard, not to talk about neighbors.

Thus, Armenia needs to “open” itself. This is the purpose of this visit – discussion of political issues. Achieving an “open” Armenia will foster its economic development. These two solutions should proceed the same way. Let us not separate them for the benefit of Armenia.

This is first of all a friendly visit aimed at stimulating, inter alia, the establishment of French companies in Armenia. I highly appreciate the activities of the French companies which are present in Armenia and are operating here.

Concluding my speech, I want to stress that France wants to be of help to Armenia.

Thank you.

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 French President Francois Hollande answered participants’ questions at Armenian-French economic forum

Question – Managing Director of Likvor Sergey Matevosyan: “A number of Armenian companies are interested in penetrating into the European Union, especially the French market. As our president mentioned, this process is underpinned by the GSP Plus economic scheme. I wonder how the French government and relevant bodies can help those companies in introducing their products to the French and European markets?”

President Francois Hollande: “As you said, you are interested in exporting your products to the EU market. That goal should be fulfilled. France will support Armenia’s free access to the European market, which certainly, is not limited to France only. By the way, the meaning of the issues you touched upon corresponds to that of the question directed to President Sargsyan. I have to say that Armenia’s export opportunities are limited by the absence of sea roads and closed borders. As a result, trade exchanges are more costly. Having certain useful resources, your country does not have oil and gas reserves. For this reason, I reiterate, trade costs are high.

Europe should accept this reality. Armenia has economic and political peculiarities which require special mechanisms.

After the European Parliament elections, France is going to support finding a special mechanism for Armenia within the framework of the European Parliament.

The Customs Union should not be an obstacle. Considering Armenia’s special case, we should keep on strengthening the economic privileges granted to Armenia in the European area so that Armenian products easily penetrate into the European market.
I do not think that legal mechanisms need drastic changes since the Association Agreement has not had economic outcomes so far defined by the Eastern Partnership program.

We can adapt the structure of the Association Agreement and find special mechanisms for Armenia. At least, France will strive for that during coming discussion at EU bodies.”

Question - Hovik Musayelyan, Managing Director of Synopsys Armenia: “Synopsys is an American company specializing in world leading microchips’ design and over the last ten years it has invested in Armenia latest technologies worth a few hundred million dollars, and now we are Armenia’s number one IT employer with our one thousand-member team. I would like to add that our employer is more than satisfied with doing business in Armenia since it can make a high-quality intellectual product at a low cost price. I want to direct my question to both presidents. Distinguished Mr. Presidents, it is a well-known fact that driven from geographical and geopolitical realities Armenia lays special emphasis on high-value productions such as information and communication technologies, robotics, pharmaceutics and other sectors of the same type. France is among world’s leading countries which regularly applies innovative technologies. In your opinion what steps should the governments of the two countries take in order to raise the cooperation in these sectors to a new development level, as well as to stimulate the foundation and promotion of the two countries’ joint enterprises?”

President Francois Hollande: “First of all, I would like to congratulate you for making investment in Armenia. If I am not mistaken your question is about the innovation industry, namely about innovative and digital technologies.

We consider that with its dynamics this sector will have decisive, I would say a primary role in economic competition between world countries in the coming years.

This is an ability which will allow us to not only create a sophisticated high technology network but also to acquire highly developed applied mechanisms and high-quality enterprises.

Answering your question, I would like to note that you can introduce support mechanisms for beginner companies taking their first steps both in innovative and digital technologies.

There are certain companies and enterprises in France which operate in those sectors. They can help in specialist training and retraining in parallel with making investments.

The highly developed large French enterprises can assist with establishing and promoting enterprises in the field of innovative and digital technologies. Today, we have two French companies present here, which want to come to Armenia, and they might apply the above-mentioned support mechanisms to help young Armenians in establishing and developing such companies in the given sector. We can render the same assistance collaborating with the French University in Armenia being represented in here since it is crucial to train and retrain personnel affording them an opportunity to fulfill those goals.

In conclusion, I would like to say that in case of an existing mechanism the French authorities are ready to help Armenia with that issue.”