Throughout October 2013- March 2014 Artak Kyurumyan studied a number of issues related to the managing and incurring the national debt and its volume. Artak Kyurumyan reviewed the collected data and information in the context of the developments in Armenia, international experience, as well as the findings of different research studies on the topic.
Basedon the study of the development trends in recent years Kyurumyan analyzed the appropriateness of the decisions regarding the government debt and their relation to the objectives set out in the strategic and mid-term documents of the RA Government, as well as the forecasts of international financial institutions.
Armenia started to experience debt problem when it began taking non-preferential loans. According to Kyurumyan, the concessional loans have become less available since Armenia was classified as a middle-income country. The independent researcher summed up his research in a report, additionally proposing guidelines which will enable improving the system of national debt management and avoiding previous mistakes in the future.
During his study of the issue , Kyurumyan noticed that with the availability of significant funds in the Central Bank, however, new loans were attracted. According to the expert , there was no need for the Russian loan of USD 500 million. The researcher justified only the possible loan of USD 100 million, especially under the present circumstances when loans are taken but some programs such as the North-South Road Program are not implemented .
Artak Kyurumyan believes the issue of Eurobonds to be untimely since those amounts were simply placed in the Central Bank, while the country is to make an annual interest equal to USD 42 million interests against them per annum. The researcher believes that a loan can be taken only in case of reasonable and clearly presented programs.
Kyurumyan recommends setting the maximum allowed value of Armenia's government debt and the target structure of the debt at the end of each year.
According to Kyurumyan, existing issues pertaining to the government debt are not due to the lack of relevant experts in the Ministry of Finance. There exist other reasons: “It is necessary to protect the government debt management from political influences,” he concluded.
The discussion participants included economists, public and international organizations, civil society representatives who are concerned about the situation related to Armenia's government debt.
The report is prepared by “Open Society Foundations – Armenia” in the framework of Political Scholarships Initiative.