“Discussion: The Government's Actions are Superficial, Economic Issues are deep”
27.01.2017
13:00
Armenia's new government initiatives and the current economic situation, the challenges are not in accordance. The economy has profound problems of efficiency, logistics, fundraising, and tax administration but the officials make provisional, superficial and temporary solutions. Economists talked about this during the discussion “The New Government's Actions and RA Economic Challenges” at Media Center on January 27.

Vahagn Khachatryan, Economist, said that there is a lack of professional approach in the activities of the Government. "Of course I see many more performances, but in real life, economic or social, there is no change," said Khachatryan, adding that it could be due to two factors. "Or have is lack of time, or simply are not aware of these activities." At the same time, he said, the problems of the economy are not new, recently started talking about the direct government level.

“I see a lot of talking and presentations but in real life there is no change in economic or social terms,” Khachatryan said, adding that it could be due to two factors. "Either the officials have lack of time, or simply they are not aware of these activities." At the same time, he said that the problems of the economy are not new; they are just recently spoken about on the government level.   

Last year, the Government failed to provide not only the anticipated 2.4 percent growth, but even one percent of economic growth. Some days ago, the National Statistical Service published statistical data in 2016, according to which the economic activity index was 0.5 percent. 

According to Vahagn Khachatryan, in the conditions of zero economic growth the government should honestly say what was happening in the economy. "The situation in the fields of agriculture and construction is disgraceful, and we still don’t have strategic approaches. We are a failed state, because all our activities aimed at economic growth did not come into reality. On the contrary, over the past three years, the situation got worse: the national debt has increased, people’s income are reduced, purchasing power has fallen, and does not show any signs of improvement, as wages and pensions are not rising, and the economy is not growing,” he said.

Tatul Manaseryan, Head of “Alternative” Research Center, Doctor of Economic Sciences, drew attention to the problem of investment reduction. "Before talking about attracting foreign investments, favorable conditions should be made that domestic investments grow. If an Armenian entrepreneur does not make an investment in Armenia, how shall we convince foreign entrepreneurs to invest in Armenia?" the expert said.       

In terms of investments, Armenia is based on the only strategic ally. “We fixed only Russia and we will collapse from this dependence one day. If Russia does not invest, we are lost. We should make Armenia more attractive,” he said, adding that Armenia’s competitive capabilities are not revealed until today.

After his visit to Moscow, RA Prime Minister Karen Karapetyan stated recently that a joint Armenian-Russian investment fund will be established and opportunities will be provided for the flow of investments in the free economic zone from Russia to Armenian-Iranian border. Here, too, the experts see problems. "Now we go to Russia, we're talking about a $ 300 million fund. But it is not clear why the Russian capital should come to Armenia. What is our advantage? The income tax is 13% in Russia and 26% in Armenia, VAT is 18% in Russia and 20% in Armenia, the ruble has devalued in Russia and it gives an opportunity to produce cheap goods and so on. That is, it turns out that it is more profitable to make business in Russia than in Armenia,” Khachatryan said.    

Tatul Manaseryan welcomed the idea of a free economic zone with Iran but in his opinion this should be an instrument for the well-being of the country, not a goal. "We must have a free economic zone with Iran; I do not see any alternative. We need Iran as much as Iran needs us. Armenia should be attractive for investors. It should not only become a link between Iran and the Eurasian Economic Union. As a result, the role of Armenia will be that in the Eurasian Economic Union, which is a short-sighted approach,” the economist said.

Arshaluys Mghdesyan, editor/events coordinator at “Media Center”

To contact the author please send an email to arshaluismghdesyan@pjc.am.

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