Change Needed in Distribution of Foreign Credits: Union chair says economic indexes “disturbing”

Safaryan urges to focus on making investments into small and medium business

A state must play the manager’s part rather than serving as a night guard in its economic policy, stimulating development of the branches, helping a country overcome world economic crisis, says Vazgen Safaryan, Chairman of the Domestic Commodity Producers' Union of Armenia. (The Union, founded in 1999, is comprised of about 500 members, who are directors of enterprises in Armenia.)

Speaking at a Thursday news conference Safaryan reported that the economic indexes of this year are disturbing, as the ratio between Gross Domestic Product (GDP) and foreign debt has reached 46 percent. Economists generally agree that a country is insolvent, if its foreign debt surpasses 50 percent of its GDP.

Safaryan says the State must conscientiously distribute foreign credits, stimulating the development of the industry, whereas, as Safaryan says, the $500 million credit received from Russia was, for unknown reasons, spent on Armenia’s construction sector.

“It is not right to stimulate the development of construction, as far as it gives profits only once, meanwhile investing credits in small and medium-sized businesses, the profit becomes permanent,” says Safaryan, who is also a leader of the United Progressive Communist Party of Armenia.

According to him, it is time to adopt a law on industry development and on proper distribution of credits.

“The Sub-commission of the Public Council (adjacent to the president) is drafting a conception of industry development, but it will take too long until that document is ready, until it is submitted to the Government, and later to the National Assembly, whereas reforms directed at the development of domestic production should be realized now,” Safaryan concludes.