Buisiness threshold

Oligarch clan model hinders payment of Armenia’s external debt
The external debt of Armenia increased by 2.5 times in 2009 compared with 2008 and by 0.5% during the first three months of 2010. It now stands at 2.982 billion dollars. Moreover, the ex-prime minister of Armenia, Hrant Bagratyan, believes that most of the debts (about 90%) are not to international financial organizations but commercial debts. "In 2013 we will have to pay 478 million dollars in interest. So, we will spend twice as much on servicing debt in a few years. It's a disaster" - he said.

At the same time, the minister of finance, Tigran Davtyan, does not think that the external debt of the country creates risks, as a risky debt is considered to be about 60%. The representative of the IMF in Armenia, Mark Luise, is of the same opinion .

This year the government is planning to be more careful and won't take out any credits. Experts think that the debts can only be paid if production and exports increase. Exports account for about 9% of the GDP of the country. The biggest taxpayers in Armenia - "Arm Rosgazprom", "Alex-Grig", "Flash", "City Petrol Group" and others - do not produce anything but only import goods. So the economic elite is standing against the interests of the people.

An oligarch clan model for  the economy was formed in Armenia at the beginning of the century. It has been pointed out many times by world financial organizations that this model is a hindrance to the Armenian economy.