Economist’s tips: the proper use of resources may help overcoming crisis

Economist Tatul Manaseryan, adviser to the Speaker of the National Assembly of Armenia, believes that if domestic and Diaspora resources are properly used, Armenia will see economic growth next year exceeding the government target of 1.2 percent.

So far this year Armenia has seen an 18.3 percent decline. The World Bank and International Monetary Fund have predicted that Armenia’s contraction will have reached 15.6 by year’s end, indicating a “growth” that decreases the pace of decline.

The economist believes that first it is necessary to pay attention to the most important and most competitive sector in Armenia, energy.

“In this respect the agreement achieved with Turkey to export 4.5 billion kw/h electricity from Armenia, is already a progress. It is necessary to remember that we use only one third of our resources, and we have two thirds left,” Manaseryan says.

The economist separates agriculture as one of the weakest spheres in Armenia. “We have serious problems here, as far as nothing is done for the creation of a sufficient level of competitiveness. But the regresses in the agricultural sector are common for all Commonwealth of Independent States (CIS).”

As for the construction sector, being in the focus of attention of the Armenian Government, the economist believes that it is necessary to pass from residential building, and to concentrate instead on industrial constructions, developing free economic zones in Armenia.

The next sphere refers to the necessity of technical rearmament.

“Armenia did not manage to technically rearm during the world economic crisis, as other countries did. I mean the possibility of becoming free from the value added tax (VAT) by means of importing equipments totaling $1,000,000 (380,000,000 drams), so that the small and medium-sized business can make use of the possibility that the crises created,” Manaseryan says.

Manaseryan believes that the banking sphere is also problematic, because banks keep on lending State-allotted money at high interest rates – 15-22 percent, “whereas in fact, the interest rate must be no high than 5-6 percent.”