James Hakobyan
31 Aug 06

The hit of the anniversary of independence is the depreciation of
the dollar, or according to official Yerevan, revaluation of the dram.

The wording does not interest the society, like with regard to
independence. Most citizens of Armenia living independently over
the past 15 years are no longer interested whether the country they
live in is characterized as independent or not. It does not interest
them because for 15 years independence remained at the level of
wording instead of turning into a way of life. And by describing
the depreciation of the dollar as the depreciation of the dram the
government was unable to settle the problem. In other words, it was
unable to dispel the doubts that a big game is hiding behind these
wordings, and the society was removed from the field even before the
game starts.

And this prevents from getting the complete picture of the situation
because on the one hand you are in the field, on the other hand,
however, you can only see what the TV set of the checkroom shows.

Meanwhile the TV shows what a skillful economic and monetary policy
the country conducts, harmonizing the revaluation of the Armenian
economy and the national currency. People suffering from this harmony
naturally do not believe the TV set and have already stopped believing
that happiness is in harmony.

They do not believe on seeing another example of harmony between the
international financial organizations and the government of Armenia,
namely the Central Bank. Over the upcoming fortnight the delegation
of the IMF will be visiting Armenia. No doubt it will again utter
words of praise for the monetary policy of the Central Bank. And
the whole paradox is that these words are based on the international
monetary tendencies. In other words, when they approve the policy of
the Central Bank, they proceed from the situation in the developed
countries of the world, i.e. curbing of inflation, a fluctuating
exchange rate. Presently this is the accent of the monetary policy
conducted in developed countries. And it appears that the praise of
the international financial organizations for the Central Bank of
Armenia is quite justified. In addition, these organizations praise
the Central Bank not only in public speeches but also in internal
reports and recommendations, which are extended to the Central Bank
in the form of analyses.

It appears that the international organizations approve a policy
which harms almost half, even more than half of the country's
population. There is a nuance, however, which the international
organizations diplomatically avoid to state publicly and apply only
in private contact with the Central Bank. The problem is that by
emphasizing the correct monetary policy of the Central Bank in the
documents of these closed contacts and praising the attitude of the
organization with regard to the exchange rate, the international
financial organizations, particularly the IMF point to an underlying
circumstance - the absence of a strategy of development of the
country. They say this is the reason why the policy of the Central
Bank becomes target of strictures.

In other words, when there is no strategy, it is natural that separate
steps will not produce any results, since results should be expected
from complex steps. It is impossible to cut the leg of a man and take
it forward waiting that the head will come forward. The head will
howl of pain but will not walk forward because an organism moves
together. The problem is that there is no movement. In this case
the Central Bank does what it should in accordance with the rules,
in other words, in accordance with the theory. And this action is
approved by the international financial organization because it fully
complies with their idea about the theory.

It appears that we deal with an almost ideal state: there is a theory
and there is an action that complies with the theory. And strange
though it may seem, this ideal state leads to an undesirable result for
the public. No doubt, this result is determined by objective factors
as a result of which the dram really revaluates and the dollar really
depreciates, and interference with this process may lead to undesirable
consequences for the economy and the financial market. The problem is
that ideal actions are good for an ideal environment only. And the
atmosphere in Armenia is far from being ideal and gets even farther
by a daily decrease by one or two drams.

It is clear that "nature" is to blame for natural decrease.

In this case who is accountable for the artificial decrease? Who
imposes an ideal reaction on the reality, which is far from the ideal,
creating an illusion of harmony to the image of the mixed action?