“5-Year-Program of the Government: New Opportunities or Challenges?”
27.06.2017
13:00
A discussion entitled “5-Year-Program of the Government: New Opportunities or Challenges?” was held at Media Center on June 27.

Hayk Gevorgyan, Economic Journalist, and Vilen Khachatryan, Economist, were the speakers of the discussion.

Referring to the 5-year-program of RA Government, Hayk Gevorgyan says that in spite of the fact that the Government representatives consider it ambitious but he sees no ambitions in that program. On the other hand, the peculiarity of the Armenian economy is that it is very sensible towards the foreign factors and according to the economic journalist, the peculiarity of Armenia's economy is that it is very sensitive to external factors, and their positive or negative change may affect the country's development pace in an appropriate way.

“You do not have to do anything to ensure 5% GDP growth. For example, we had 7.2% growth in 2012, and this was the case when the government did not make any improvements. What has happened? Private transfers from Russia have been dramatically increased and copper prices sharply increased in the international market. Nothing was done, no reform, no corruption was overcome, no economy was decentralized, nor the judicial system was reformed... By putting a 5% growth target, in fact the government says that it is not going to do anything, you should solve your problems,” Hayk Gevorgyan said.    

Economist Vilen Khachatryan, referring to the  five-year economic growth rate, estimates that by this economic growth rate we will have about $ 14 billion GDP in 5 years. However, the estimates and forecasts of various international expert organizations Armenia's GDP will comprise 12.5 billion in 2022. At the same time, the economist presented how this economic growth will affect an average statistic citizen.

“If we divide the GDP among three million people on a conditional basis, our quality of life will be about $ 4.5 thousand per person per capita. This means that in the coming years, the growth of nearly $ 3.5 billion will provide for our population a GDP growth of about $ 1,000 per person,” Khachatryan said, adding that he is pessimistic about this, since ensuring such indicators will be quite complicated.

“It will be much more complicated to show 5% growth on the basis of each year’s 5%. The accumulative growth rate will be 35 percent in five years,” the economist says.

Speaking about the leading positions in the Doing Business ranking list set by the government and the president of the Republic of Armenia, the speakers note that promotion in this chart does not mean to have a viable economy.

“We are now neighbors in this list with Belgium and Italy, even ahead of many leading countries. But it does not have any significant impact on the economy. For example, the deadline for joining business networks today is five days, and we make it two days. You record a progress in “Doing business” but if it makes the economy strongly beneficial, of course no, there is no change,” Hayk Gevorgyan said.   

Vilen Khachatryan, touching upon the subject, noticed: “It is not right to put “Doing business” on the basis of the country's development standards. For example, our position in competitiveness reports is rather bad, why not to reach the leading countries there?”

Referring to the reduction of the poverty index, Vilen Khachatryan mentioned that according to his calculations, the government aims to reduce the poverty index to the level we had in 2008-2009.

“But now we have a huge difference with those years, if we had a $ 1.5 billion debt at that time, I forecast that we would have a debt of $ 7 to 8 billion in 2022. This means we will lower our debt threshold in the coming years, which means higher growth rates. But we normally borrow more every year than we provide a growth. This is a catastrophic bad situation,” the speaker said.  

Hayk Gevorgyan notes that poverty reduction can be achieved not only due to the increase of the population's income, but also the reduction of food prices in the world market.

“If the government fails to do anything, food prices will decline in the market, then poverty will decline. Even in this regard, if we want poverty reduction, we must fight against monopolies to reduce food prices, which directly impacts on poverty reduction,” Gevorgyan said.  

Derenik Malkhasyaneditor/events coordinator at “Media Center”

To contact the author please send an email to [email protected]

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