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ABEL AGHANBEGIAN: UNLIKE RUSSIA, ARMENIA HAS NO "SAFETY CUSHION" TO RESIST FINANCIAL CRISIS
Noyan Tapan
Oct 23, 2008
YEREVAN, OCTOBER 23, NOYAN TAPAN. The international financial crisis
has mutually exclusive impacts on Armenia's economy: on the one hand
in case of a correct economic policy, the sharp fall in oil prices
must result in a decline of gasoline prices, while on the other hand
the changes in foreign currency prices must contribute to structural
changes in the export.
Economist, Academician of Russia's Academy of Sciences Abel Aghanbegian
expressed this opinion at the October 23 round table on the subject
"The Economies of Armenia and Russia Today and Tomorrow" organized
by A. Aghanbegian Higher School of Corporate Management functioning
under the patronage of the RA National Academy of Sciences.
He said that at the same time Armenia will encounter some difficulties
in terms of investment and charity funds attraction. Another difficulty
is related to the growth in prices of imported goods due to increased
inflation in exporting countries. Besides, a decline has occurred in
the number of those who came to Russia and olther countries affected
by the financial crisis to work temporarily there, as well as in their
incomes. For example, in this connection "there is a real disaster in
Moscow because almost half the construction work in that city is done
by Tajiks, Ukrainians and representatives of other nationalities, and
they have been dismissed from their jobs". For this reason there will
be a decline in the considerable amount of remittances sent to Armenia
from abroad that will result in a growth of domestic inflation which
in its turn will depreciate savings to be followed by the slowing
growth in the interest rates of bank deposits.
A. Aghanbegian pointed out the decline in the number of tourists to
Armenia as another negative effect of the international financial
crisis. According to him, in 2007, 510 thousand tourists visited
Armenia and spent 450 million dollars here.
Nevertheless, in his words, the impact of the crisis on Armenia will
not "so terrible as on Russia, even though Armenia has no "safety
cushion" that Russia has".
It was mentioned that the consequences of the international financial
crisis are more serious in Russia than in many other countries,
but Russia has a greater reserve of firmness due to its 7-8% average
annual economic growth in recent years. Its economic growth will only
slow down and make 4-5% in 2009 as compared with the previous year -
against 0-3% growth in other countries. Besides, Russia is currently
in third place in the world by its rerseves that amount to 800 billion
dollars. Prior to crisis, Russia's gold reserves made 600 billion
dollars, the Stabilization Fund's resources from the sales costs of
oil at high prices made 170 billion dollars, and the budget surpus
amounted to 80 billion dollars. The indicated resources are used first
of all for offsetting the insufficient liquidity of the Russian banks
forming the system, which allows to prevent bankruptcy of such banks
and to overcome the crisis, whereas there were such cases in the U.S.
A. Aghanbegian noted that for efficiently managed companies that
produce goods in demand, the financial crisis represents a period
of new opportunities to occupy markets and acquire assets (companies
and securities) at a cheap price.
In his words, many experts forecast that the stage of overcoming the
current international financial crisis will be much longer and more
painful, as compared, for example, with the 1998 financial crisis.
Noyan Tapan
Oct 23, 2008
YEREVAN, OCTOBER 23, NOYAN TAPAN. The international financial crisis
has mutually exclusive impacts on Armenia's economy: on the one hand
in case of a correct economic policy, the sharp fall in oil prices
must result in a decline of gasoline prices, while on the other hand
the changes in foreign currency prices must contribute to structural
changes in the export.
Economist, Academician of Russia's Academy of Sciences Abel Aghanbegian
expressed this opinion at the October 23 round table on the subject
"The Economies of Armenia and Russia Today and Tomorrow" organized
by A. Aghanbegian Higher School of Corporate Management functioning
under the patronage of the RA National Academy of Sciences.
He said that at the same time Armenia will encounter some difficulties
in terms of investment and charity funds attraction. Another difficulty
is related to the growth in prices of imported goods due to increased
inflation in exporting countries. Besides, a decline has occurred in
the number of those who came to Russia and olther countries affected
by the financial crisis to work temporarily there, as well as in their
incomes. For example, in this connection "there is a real disaster in
Moscow because almost half the construction work in that city is done
by Tajiks, Ukrainians and representatives of other nationalities, and
they have been dismissed from their jobs". For this reason there will
be a decline in the considerable amount of remittances sent to Armenia
from abroad that will result in a growth of domestic inflation which
in its turn will depreciate savings to be followed by the slowing
growth in the interest rates of bank deposits.
A. Aghanbegian pointed out the decline in the number of tourists to
Armenia as another negative effect of the international financial
crisis. According to him, in 2007, 510 thousand tourists visited
Armenia and spent 450 million dollars here.
Nevertheless, in his words, the impact of the crisis on Armenia will
not "so terrible as on Russia, even though Armenia has no "safety
cushion" that Russia has".
It was mentioned that the consequences of the international financial
crisis are more serious in Russia than in many other countries,
but Russia has a greater reserve of firmness due to its 7-8% average
annual economic growth in recent years. Its economic growth will only
slow down and make 4-5% in 2009 as compared with the previous year -
against 0-3% growth in other countries. Besides, Russia is currently
in third place in the world by its rerseves that amount to 800 billion
dollars. Prior to crisis, Russia's gold reserves made 600 billion
dollars, the Stabilization Fund's resources from the sales costs of
oil at high prices made 170 billion dollars, and the budget surpus
amounted to 80 billion dollars. The indicated resources are used first
of all for offsetting the insufficient liquidity of the Russian banks
forming the system, which allows to prevent bankruptcy of such banks
and to overcome the crisis, whereas there were such cases in the U.S.
A. Aghanbegian noted that for efficiently managed companies that
produce goods in demand, the financial crisis represents a period
of new opportunities to occupy markets and acquire assets (companies
and securities) at a cheap price.
In his words, many experts forecast that the stage of overcoming the
current international financial crisis will be much longer and more
painful, as compared, for example, with the 1998 financial crisis.