Migration, investments and financial services

Armenia has one of the most open investment regimes among the emerging market countries, and is ranked 33 worldwide on the 2017 Economic Freedom index (The Heritage Foundation, 2017). The World Bank also placed it among the top 40 countries worldwide in their latest ease of doing business ranking, and at number 9 in the world for starting a business (World Bank, 2017b). In 2015, the Eurasian Economic Union trading block came into being, grouping Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia into a single economic market of 176 million people. Despite these achievements, Armenia still faces challenges in its investment climate. These include its small market size (with a population of less than three million) and its closed borders with Turkey and Azerbaijan.

Armenia has a relatively small but growing financial system, dominated by its banking sector. In 2015, close to 90% of financial assets were held by 21 commercial banks (Central Bank of Armenia, n.d.). The non-bank sector in the country is underdeveloped, with a small but growing insurance sector and a very limited capital market. Developing this sector is a priority for the authorities. A pension reform and other policy measures are currently underway to attract institutional investors and promote financial innovation.

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