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Hrant Bagratian: Armenia's import sector should be gradually
demonopolized in order to overcome crisis
http://www.nt.am/news.php?shownews=1012945
YEREVAN, MARCH 13, NOYAN TAPAN. The consequences of the global
financial and economic crisis will have a much longer impact in Armenia
than in Western countries as Armenia has been affected not only by the
financial crisis but also by a structural one, the former prime
minister of Armenia Hrant Bagratian said at the March 13 press
conference. According to him, in the past 4 months about 800 million
USD from Armenia's foreign reserves was spent to maintain artificially
the exchange rate of the dram. In his opinion, this sum was spent to
sell dollars cheaply to 3-4 persons-importers. Whereas, as he noted,
the authorities should have adopted a floating exchange rate policy
long ago, as a result of which the damage done to exporters would not
have been so great.
H. Bagratian said that in 2008, Armenia's GDP fell by 10% in October on
September and by 31% in November on October. Then GDP grew in December
on November, and a sharp decline of 62.8% was recorded in January 2009
on December 2008. After showing a two-digit economic growth for the 8
consecutive years, the country went into an economic decline. According
to the former prime minister, the level of unemployment is high in
Armenia, the mining industry and construction have come to a halt, and
the gem and jewelry sector has suffered a decline.
In the words of H. Bagratian, the authorities are currently intervening
in formation of the exchange rate and, more dangerously, in inflation.
"They seem to do something to please the people, but it will crash
later because the economy is a market one," he noted.
He expressed an opinion that in order to get out of the current
situation, first of all it is necessary to let the dram's exchange rate
float, then to review the banking policy. Besides, the import sector
should be demonopolized gradually. Whereas, in his words, the
authorities are not conducting a correct policy of struggle against
consequences of the economic crisis so as "not to hit the pockets of a
number of oligarchs". In this case, according to him, the whole
consequence of the economic crisis "will lie on the shoulders of the
poor".
H. Bagratian forecast that the depreciation of the dram will continue
and during a year the exchange rate of the dollar will fluctuate within
400-850 drams.
demonopolized in order to overcome crisis
http://www.nt.am/news.php?shownews=1012945
YEREVAN, MARCH 13, NOYAN TAPAN. The consequences of the global
financial and economic crisis will have a much longer impact in Armenia
than in Western countries as Armenia has been affected not only by the
financial crisis but also by a structural one, the former prime
minister of Armenia Hrant Bagratian said at the March 13 press
conference. According to him, in the past 4 months about 800 million
USD from Armenia's foreign reserves was spent to maintain artificially
the exchange rate of the dram. In his opinion, this sum was spent to
sell dollars cheaply to 3-4 persons-importers. Whereas, as he noted,
the authorities should have adopted a floating exchange rate policy
long ago, as a result of which the damage done to exporters would not
have been so great.
H. Bagratian said that in 2008, Armenia's GDP fell by 10% in October on
September and by 31% in November on October. Then GDP grew in December
on November, and a sharp decline of 62.8% was recorded in January 2009
on December 2008. After showing a two-digit economic growth for the 8
consecutive years, the country went into an economic decline. According
to the former prime minister, the level of unemployment is high in
Armenia, the mining industry and construction have come to a halt, and
the gem and jewelry sector has suffered a decline.
In the words of H. Bagratian, the authorities are currently intervening
in formation of the exchange rate and, more dangerously, in inflation.
"They seem to do something to please the people, but it will crash
later because the economy is a market one," he noted.
He expressed an opinion that in order to get out of the current
situation, first of all it is necessary to let the dram's exchange rate
float, then to review the banking policy. Besides, the import sector
should be demonopolized gradually. Whereas, in his words, the
authorities are not conducting a correct policy of struggle against
consequences of the economic crisis so as "not to hit the pockets of a
number of oligarchs". In this case, according to him, the whole
consequence of the economic crisis "will lie on the shoulders of the
poor".
H. Bagratian forecast that the depreciation of the dram will continue
and during a year the exchange rate of the dollar will fluctuate within
400-850 drams.