Deputy chairman of the committee on monetary and fiscal issues of the Armenian parliament, Artsvik Minasyan, told VK about ways out of the crisis for the economy.
- Armenian officials traditionally blame the world financial crisis for the sad situation in the economy of Armenia. What are real grounds for the problem?
- Unfortunately, there were no any serious achievements in the economy of Armenia in 2011. Living standards are reducing; Armenian competitiveness is weak; monopolization is being improved; migration is growing. There are small successes, but they cannot be called achievements. Some of such successes are development of the concept on export of the industrial policy, providing the State Committee on Protection of Economic Competitiveness of Armenia with some instruments, the target of additional budget incomes in 101 billion drams. My expectations for 2012 depend on the results of the parliamentary elections. Our population should apprise this or that political party from the point of view of economic policy, which it intends to provide.
- What is your appraisal of the current government?
- Individually members of the government are skilled specialists, but the current government should resign. It is relevant, as none of principles of the adopted governmental program 2008 were implemented. Moreover, instead of progress the country is undergoing regress, in this context the government has no moral right for remaining in power. Early 2012 was marked by an active interference of President into social-economic issues. Meetings were held, orders were given, but the situation hasn’t stabilized. Even official data on the social-economic situation are negative. There are objective and subjective reasons for growing of migration – the world crisis and the inadequate policy of the government.
- Establishing of the investment space favorable for investors is widely discussed. What has been done in reality?
- In the end of 2011 the ruling Republican Part of Armenia presented its economic strategy, which said about promotion of investment attraction of our country. At the same time, my colleagues were not managed to name at least one guarantee that this strategy will be implemented. Motivation of investments is a priority for the economic policy of the republic, but I don’t understand why foreign companies would invest to Armenia. What has changed – investment environment, dependence of courts on power, or human rights protection? In reality nothing is doing in this sphere. If we are not managed to establish an adequate environment in the country, we won’t implement the strategy.
- Armenian economic laws are as good as Western ones. The point is they do not work…
- It not the only reason. Unfortunately, in our economic policy high-liberal approaches prevail. Meanwhile, there are other directions in the world, and participation of the government in economy is thought to be important, especially in the post-crisis period. The government should not only develop liberal laws, but also influence internal formation of prices, defining purchasing enterprises and so on. There are a lot of possible schemes. They will enable the internal market to step on a new level.
- Armenian officials have their own views on the situation…
- I think their arguments are ridiculous. It is true that some economists and officials state that after monopolies would be canceled, products would const even more. In reality the situation is different. The scale effect is working when we speak about natural monopolies, for example, in infrastructure. When we speak about import of products and services, this argument is false. I’m sure the role of the state in economy should be more aggressive, as only due to it national revenues in GDP could reach 35%, 25% of which should be taxes inflows.
- Why did your fraction vote against the governmental fiscal project for 2012?
- I think the budget 2012 doesn’t take into account possible inflation scenarios and risks. Growth of incomes is predicted according to inflation, but how inflation will influence budget spending is not clear. The policy of spending part of the budget doesn’t differ from the budget 2011, except increase in 41 billion drams for the social sphere. There no serious changes in correlation of direct and indirect taxes. It is important to discuss launching of the program budgeting, which will enable the government to appraise using of resources in details.
- Every year the government speaks about the social direction of the budget. At the same time, investments are not mentioned. Doesn’t it contradict the Economic strategy by the ruling party?
- It is true that majority of spending in the state budget is current expenses. Thus, investment resources will be scarce in 2012. However, we need investment for improvement of the economy. Unfortunately, the social-economic policy hasn’t changed for three years as well.
Interview by David Stepanyan, Yerevan. Exclusively to VK
