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Armenia To Open First Tax-Free Zone

Eduardo Eurnekian, an Argentine businessman of Armenian descent, has good relations with Armenia's current and former presidents.
YEREVAN -- The Argentinian company that operates Yerevan's Zvartnots International Airport has moved to open Armenia's first tax-free economic zone in order to boost agricultural exports and other products, RFE/RL's Armenian Service reports.

The creation of such a zone within the airport is envisaged to include a long-term airport management contract that was signed in 2001 by the Armenian government and the Corporacion America SA group of Eduardo Eurnekian, an Argentinean billionaire of Armenian descent.

The Zvartnots operator plans to complete a multimillion-dollar reconstruction of key airport facilities by the end of this year and is stepping up preparations for the launch of the tax haven.

The Armenian government, for its part, drafted and pushed through parliament last month a law on free economic zones. The law defines economic entities that will be allowed to do business there and be exempt from taxes.

The government and Corporacion America signed on July 14 another agreement that paves the way for the opening of the zone. But officials at the signing ceremony would not say exactly when it will start functioning.

Economy Minister Tigran Davtian said it would happen "in the not-so-distant future."

"I have very high expectations because this is a new opportunity for the development of our economy," Davtian told journalists.

The tax-free zone is supposed to cater to domestically grown produce for export abroad. It is to have warehouses equipped with refrigerators, packaging facilities, and a food-safety laboratory.

Eurnekian, who has good relations with Armenia's current and former presidents, owns hundreds of hectares of vineyards and orchards in the Ararat Valley adjacent to the airport.

Davtian reaffirmed his government's plans to help open two more such zones in the coming years. One of them is due to be located on the premises of an idle electronics plant in Yerevan.

Some local economic analysts question the wisdom of having such designated areas in Armenia.

Bagrat Asatrian, a former Armenian Central Bank governor who is highly critical of the current authorities, told RFE/RL that the Zvartnots economic zone would bring no benefits to agriculture or other sectors of the economy.

"In a country like economic zones will only serve the interests of a small number of people," he said.