Policy Study Armenia 01/2020

Reform Options for Free Economic Zones (FEZ) in the Republic of Armenia

Executive Summary

This study identifies reform options for FEZ in Armenia focusing on the four dimensions (1) strategic focus, (2) value proposition, (3) institutional framework, and (4) promotion that are critical for the success of zone programmes.

» Since 2013, five FEZ have been created in Armenia of which three are operational (FEZ Alliance, FEZ Meridian and FEZ Ecos ). The FEZ in Meghri that has not yet been opened constitutes the only public zone. The other zones are managed by private companies

» While the approach taken in Armenia minimised the initial public outlays, the performance and impact of the zones remained below expectations so far. The assessment carried out identified considerable constraints in all four dimensions:

  • The lack of a coherent strategic framework constitutes a key limiting factor
  • The zones have not a fully convincing value proposition. It relies too strongly upon
    incentives and does not seem to unlock additional investment potentials for Armenia
  • The potential of private sector involvement is only partly tapped. There is a low level
    of coordination between the government and the zones as well as amongst the zones
  • Resources and capacities for promotion are limited in most cases. Synergy potentials remain untapped
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