Moderately free Armenian economy
David Stepanyan, Yerevan. Exclusively to Vestnik Kavkaza
The Armenian economy is 'moderately free'. Such a conclusion is made by the authors of the report on studying the level of economic freedom, which was conducted by the American Heritage Foundation together with The Wall Street Journal. The index of economic freedom of Armenia was determined as 69.4 points, i.e. the republic improved the index by 0.6 points, taking the 38th place in the world.
Regarding Armenia’s neighbors in the region, the best index has Georgia which takes the 21st place in the ranking. It gets into the list of the countries “with mostly free economy.” The index of economic freedom of Azerbaijan is 59.7 points, and the state is included into the list of the countries “with mostly non-free economy.” The ranking is made up every year on the ground of ten categories which consider the level of economic and trade freedoms, investment openness, involvement of the government into the economy, corruption, and so on.
On the day of publishing the results of the report Premier of Armenia Tigran Sarkisyan stated that the progress in Armenia’s position in the economic freedom ranking meant significant improvement of business climate in the republic and had great importance for deepening economic reforms. The ranking made the prime minister optimistic as he hoped the report would make the republic more attractive to foreign investments.
However, despite moderate freedom and hardworking of the government, citizens of the republic seem not to live better in 2013. It is confirmed by the statement made on January 10th by the minister of labour and social issues Artem Asatryan.
According to the official, the amount of benefits will remain the same in 2013, and indexation of benefits by the budget is not required this year. The minister also believes that increasing volumes of benefits cannot solve the existing social problems. When journalists asked him why the number of citizens who need benefits is not reduced, despite the seven-per-cent growth of economy which was expected in 2012, the minister stated that the governmental policy is mostly directed at creating jobs and implementation of “active programs.”
It should be noted that the state budget 2013 doesn’t require increase of pensions and wages of state workers. According to state statistics, in 2012 the level of inflation in Armenia reached 3.2%. The head of the Central Bank Artur Dzhavadyan stated that inflation was stabilized within the planned corridor “due to mutual efforts, targeted policy, and reduction of inflation expectations in the society.”
The state budget 2013 predicts the 6.2-per-cent growth of the GDP. At the same time, the state budget is targeted at social rather than investment sphere, it doesn’t encourage solving such problems as unemployment and low pension. It is up to citizens’ choice to decide how to live for pitiful social benefits.
Meanwhile, the authorities decided to increase tax payments in 2013 and intend to collect by 118 billion drams more than in 2012, while increase of tax payments by 108 billion in 2012 has already caused indignation of common people. The results of such policy are obvious. According to official statistics only which most probably are doubtful, 34% of Armenian citizens are poor. According to social polls, only 10.3% of Armenian citizens are happy with their life, 49% of people live poorly, but they came to terms with that. 37.4% of respondents say they live poorly and are dissatisfied with the situation.
The other threat to thin purses of citizens is a drop in the exchange rate of the national currency – dram. In March 2009 the authorities already “cheated” on people when during one day they stopped currency interventions at local exchange houses. As the result, dollar got up from 300 to 360 drams. All top officials and top businessmen knew about this, unlike common people who had to lose a significant part of their savings. The situation hasn’t changed today, and the government doesn’t exclude that dram may be devaluated by 20% in 2013. Thus, the citizens cannot hope for a better life.
The logic result of the current situation is an outflow of the population from the republic. It is natural that when people are dissatisfied with the situation in the country, they either fight for changing the situation or leave the country. Considering there are no alternatives in economic and election situations in Armenia, the growth of the migration pace has no alternative too. The moderately free economy of Armenia doesn’t attract citizens who prefer to live abroad and not to enrich 10% of very wealthy people of the country.
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