Armenia: Pursuing Export-Led Industrial Growth

Abstract

In 2011, Armenia adopted its first-ever industrial policy (IP) strategy for 2012-2020 aimed at stimulating export-led industrial growth and focusing on 11 manufacturing subsectors in the initial phase. With only limited funding, the Strategy envisions the government's role primarily as a facilitator and aims at making full use of cooperation with the private sector and international donors. While Armenia has managed to significantly increase the share of exports in its GDP, this achievement is attributable mainly to the growth in exports of lower-sophistication goods such as tobacco products, agricultural produce, food and beverages, and textiles and apparel. Among non-manufactured exports, an impressive success story is the Armenian IT sector, which has been prioritized by the government already since 2000 and has benefited from the support of diaspora investors. The free economic zones launched in Armenia have so far performed below their potential. The new government under Prime Minister Pashinyan is in the process of revising and updating the IP strategy.