The Impact of the Tariff Increase on the Armenian Economics
07.07.2014
15:00
The activities aimed at developing the Armenian economics do not go in line with the existing pricing policy. On the one hand, competitive economics, alongside with the prospect for becoming an exporting and importing country, is pursued, on the other hand, the current pricing policy is driving the country in the opposite direction.

Vahagn Khachatryan, economist and member of the Armenian National Congress; Gagik Makaryan, Chairman of the Republican Union of Employers of Armenia; Ashot Yeghiazaryan, an economist; and Mane Tandilyan, an activist with the Dem.am civic initiative, shared thoughts at the panel discussion entitled ‘The Impact of the Increased Gas and Electricity Tariffs on the Armenian Economics.’ The event was initiated by the Armenian branch of the Institute for War and Peace Reporting in cooperation with the Media Center.

‘Social issues are sure to rise due to the tariff increase, and surely, the appropriateness of such increase is still being discussed,’ noted Vahagn Khachatryan, adding that ‘the business sector has not reacted to the increase. They have not demanded clarification from the authorities while the authorities may consider they can continue raising the tariffs.’

Gagik Makaryan, Chairman of the Republican Union of Employers, believes many problems are closely connected with the Ministry of Energy and Natural Resources. The panelist cited the set of functions of the ministry which was approved by the government in 2008, listing approximately 10 functions which are not performed presently.

Economist Ashot Yeghiazaryan commented that the Armenian energy sector has adopted the Russian model, which makes Armenia unattractive for investors since the market is not free.

Mane Tandilyan, as a citizen of Armenia, demanded the authorities’ explanation why ‘the economic burden should fall on a final consumer only who will subsequently have to pay 42 drams instead of estimated 25 drams.’

‘We have missed the opportunities offered by Iran. Probably there is a problem which is not discussed publicly, for example the Russian capital,’ stated Vahagn Khachatryan.

The panelists pointed out other problems caused by the tariff increase. Evidently, the tariff increase will be followed by rise in prices. In addition, according to Gagik Makaryan, ‘10 percent reduction of money in hand will bring about the decrease of purchasing ability.’

The Commission for the Regulation of Public Services has approved an electricity price rise of more than ten per cent, with officials saying they needed to close a gap of 20 billion drams to save the power network from bankruptcy. The decision comes into effect on August 1, and although the government claims it is a temporary arrangement, it has sparked resentment in Yerevan.

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