The economic situation in Armenia is a hard one: inflation, bankruptcy of small and medium-sized businesses, low productivity. Our VK correspondent asked the head of the Research Center ‘Alternative’, Professor Tatul Manaseryan to tell the readers about a possible way out.
- Armenia's external debt, which constituted 38 per cent of GDP at the beginning of 2010, now constitutes 50 per cent, and the country’s authorities assure the population that there’s nothing to worry about before the figure is 60 per cent. - There are different points of view on the problem of external debt. Some experts believe it should not exceed 25 per cent of GDP, others say the figure should be greater than 50 per cent. However, it’s much more important how the borrowed money is spent. It’s necessary to spend these funds on increasing productivity, modernizing production and encouraging exports. If this is so, the particular figure is almost unimportant. Armenian businessmen often spend borrowed money inappropriately. They develop the service sector rather than production. Often they use these funds to start a business abroad (in Russia or in Georgia).
- Prime Minister Tigran Sarkisyan has recently said that the country will have no problems with returning the borrowed money. Do you share the prime minister’s optimistic opinion?
- Unfortunately, I don’t know any example of effective use of credits. It’s very important to invest these funds in a proper way. However, I try to remain an optimist.
- What’s the best project launched in the last five years in Armenia?
- I’m afraid I know of no successful project. A successful project is one that provides the market with high-quality products and the population with jobs. There were no such projects.
- The government often reports about the implementation of various development plans, including the construction of the Armenia-Iran railway and a new atomic power station. How can you comment on this?
- All these projects are parts of the anti-crisis plan. You can tell me how this plan is implemented yourself. I see no results from these activities. The government has also promised to report to parliament on how the implementation of the plan is proceeding, but I don’t remember that it reported even once.
- According to UN data, Armenia is among the ten countries where the prices of food products has increase most dramatically. In March the government published a list of products, prices of which will be prohibited to increase. Was this the right decision?
- The government prohibited increasing prices by 30 per cent within 30 days. However, shop owners manage to increase prices by 29 per cent and avoid the anti-inflation measures. Such practices allow them to increase prices by 300-350 per cent a year.
- Large companies continue to merge small and medium-sized enterprises. This is an especially acute problem in Yerevan, where small shops were closed and supermarkets are the only places to buy any kinds of products. Is it possible to revive small businesses?
- Small and medium-sized businesses are normally the basis of an economy. However, in Armenia there are too many problems to allow such companies to develop. I’ve proposed several measures to support small businesses and the government agreed with my arguments and has taken some of them up. However, we need an elaborate strategy rather than some specific measures.
Interview by Susanna Petrosyan, Yerevan. Exclusively to VK
