Susanna Petrosyan, Yerevan. Exclusively for Vestnik Kavkaza
Today, Armenia's economy is characterized by constantly growing foreign debt, a huge dependence on transfers and monopolization. A member of the board of the opposition Armenian National Congress, an expert on economic issues, Vahagn Khachatryan, answered Vestnik Kavkaza's questions about the situation in the economy and its development prospects.
- The amount of foreign debt of Armenia amounts to $4.9 billion, or 52% of GDP. The amount of debt is approaching the mark of 60% of GDP, forbidden under the law. What are the types of risks in this respect?
- The question of economic security is rising. It is important to understand what countries have the resources for foreign debt. All is not well in Armenia: imports are three times higher than exports, investments and transfers have significantly reduced. According to some forecasts, the volume of transfers will be reduced this year at 600-700 million dollars. The government is trying to close one debt through new loans or through the formation of new debt, that is, a pyramid is building which could fail, according to all economic laws, and the country could be declared bankrupt.
- Last month, for the first time in many years, the IMF downgraded its forecast for economic growth in Armenia to 0%, whereas in autumn 2014 it was 4.5%. Meanwhile, Prime Minister Hovik Abrahamyan announced expected GDP growth of 3%. How can we relate these two forecasts?
- The Prime Minister's statement on GDP growth of 3% is not taken seriously in expert circles. If the government gave a figure of 0%, it would show the real attitude. The application of an expected economic growth of 2.5-3% is a reflection of a very dangerous approach. Most likely, the authorities will try to do everything possible to "squeeze out" 3% growth from the economy, and this will greatly hurt businesses, citizens and free enterprise. For example, today one of the major challenges of the Russian economy is not the problem of overcoming the crisis, but what price it will require. In the case of the use of the maximum resources to overcome the crisis, there will be no way to overcome problems in the economy in the coming years. The approach used by our authorities will lead to the fact that the business circles, which were willing to work actively, will just suffocate. Meanwhile, everything does not end with 2015, we will not have the necessary resources and economic base for 2016-2017, after the implementation of this logic. The economy operates by its own rules, and if something breaks down in the body, it can be very difficult to recover.
- Does what you say that the government statement on a three-percent economic growth is trying to hide from the public the true state of affairs? Or is it a manifestation of a certain optimism on the part of the government?
- The government should be realistic. Once again I give Russia as an example, where there is a different tonality in the position of the representatives of the economic bloc. Moreover, the approaches of all poles are equally represented in the media. And the government of Armenia doesn't realize that the country is in a serious crisis, so there is no anti-crisis program. The calculations of experts show that in the context of the three months of this year, collection of taxes decreased. According to unofficial data, over the past two months, many budget organizations did not receive funding, there is an internal order to drastically reduce all costs. The government is trying to hide it. It is possible that there is a political background: the authorities are concerned that opponents can accuse them of inconsistency, the inability to manage to solve the most important problems. However, no matter how much they try to hide the true picture, there are a number of objective indicators. In particular, the reduction in turnover of 6% shows a decrease in the level of purchasing power of the population, or points to a reduction in its numbers. The second important factor is the consumption of electricity, which today is 82%, that is, consumption decreased by 18%. Thus, to determine how real talk about economic growth is, it is necessary to take into account a number of objective data.
- You often point to the fact that the solution of economic problems must be sought in the political arena ...
- Serious economic problems in the absence of a political solution or political approaches turn into some thoughts written on a piece of paper. I do not see that the government has approaches that will allow business to develop. I recall Adam Smith, who said that the development of an economy requires peace, easy taxes, and a tolerable administration of justice. We don't have low taxes: by raising social security taxes, they increased from 35 to 46%. We do not have tolerable administration of justice either. All changes in tax legislation are made with a single purpose - to fill the budget. We have no changes aimed at facilitating economic activity, at improving conditions for the creation of the investment field.
- How do you assess the latest amendments to the law 'On Corporate Tax' adopted by the Parliament in the first reading, according to which Armenian companies and Armenian citizens working abroad in the construction and tyre-fitting areas, must be registered in Armenia and pay the local tax authorities 13% tax?
- Transfers which are mostly sent by our migrants from Russia had a big advantage recently, since they avoided all public corruption schemes. Now the authorities have decided that Armenian citizens working abroad have to pay taxes to Armenia. This state makes people, who were acting within the law before, find ways to circumvent the law. Everything is not so clear in the new bill, but I try to find some logic in this step. The authorities want to create a monopoly in the field of construction work abroad (primarily in Russia, where many Armenians are working). For example, the hiring companies for construction work in Russia may be organized here. The adoption of these amendments and a regular implementation of the idea of a monopoly with working business mechanism. These are the usual approaches in Armenia, approaches that destroy competition, the ability fo free activities, a choice, an alternative, and there cannot be economic development in such circumstances.
