– In fact the economic development rate for the past five months is 8,8%, which was more than the predictions of experts and economists. What do you think about this? Is our economy growing?
– The development rate exceeded the predictions of economists. But it is worth mentioning that vulnerable economies with narrow diversification can grow rapidly and slump rapidly as well. We should be careful because in small economies there may be faster development, and it may turn into a slump too. It is important to discuss the risks that exist now too. One of the most important risks is the situation of global markets, specifically the instable situation of foreign debt and currency market in European economies. In consideration of these factors, it is not excluded that a second phase of the crisis may be originated, which may be deeper as the tools the governments of different countries used to overcome the first phase will not be available anymore. They will have to rely on a reduction policy, which will reduce the economic activity more. If it happens, this phase will be more difficult to overcome. This risk is still pending both for the world economy and Armenia.
– Some economists are speaking of another phase of the crisis. What do you think about it?
– This risk exists. The biggest factor of this risk is in Europe and this wave may come from Europe.
– You said that the development of slump of the economic situation in Armenia depends on the development of the international market, but our government claims that the crisis cannot impact on Armenia’s economy as we are not integrated with international markets. What do you think about this?
– These announcements are very strange in a situation when the economic slump is 14,4%. How can they say such things? Armenia had the biggest slump compared to the CIS, Eastern European and the regional countries. It was a result of narrow diversification and the fact that the economy was relying on the dynamics of several sectors, specifically the construction sector, which reached 30% in the composition of the GDP. Neither of the countries in the region had this rate. It is a fact that construction is very instable with its dynamics and vulnerable economy, and as soon as there were the first waves, it suffered. In parallel with that the economy was falling and there were less foreign transfers, which resulted in a rapid slump of the economy.
– The Armenian economy depends on foreign transfers and construction now too. It seems that the other sectors of the economy are suffering. Does it make the economy more vulnerable?
– This is one of the biggest sicknesses of our economy. Such sicknesses cannot be cured in a short period of time and I don’t believe the assurances of the government that they may build a diversified economy during three years. This is a very long and difficult issue, but it should be done soon or later.
– Was the anti-crisis policy of the government effective and adequate to the situation in the country?
– I think these are wasted. It is normal that during the crisis the government had to take non-standard steps such as the creation of an operative ad hoc, but when we look back we see that they did not do too much. Even these actions had a negative impact on the competition environment. If you are giving privileged conditions to a company from one sector, and the other don’t receive anything, it means the competition is suffering from this. I think that the government should stop the work of the operative ad hoc. It is also worth mentioning that it was a global crisis and the government of the country did not have an experience of management in such conditions.
– Do you think that the government cannot evaluate the situation and figure out what to do and that is why their actions are not effective?
– I agree that there is a problem of analyzing in the government. But this crisis was not a trivial crisis and there were no simple solutions. But analyzing skills would help them to be more effective.
– If you try to speak of the problems that Armenia has now. Such problems are corruption, monopolies, shadow economy, etc.
– You should discuss the issue according to separate sectors. Concerning monopolies, there are sectors where there are no full monopolies.
– Which are those sectors?
– There are many of them. For example, there is a healthy competition in the sector of dairy products. But in the sector of sugar import and production there is a total monopoly. However, in terms of the monopolistic situation and competition relations the worst situation is in Armenia.
– The government supported the creation of the “National competition foundation” for the purpose of supporting the competition in the country. Do you think this foundation has done its role? It is more than several years that Armenia is in the last places in the annual reports on competition in the world. In the report of 2009-2010 Armenia was in the 97th place among 133 countries.
– The competition foundation has a very good program and if they implement it, I think the effect will be very positive. For example, the tourism project in the vicinity of Tatev church.
– But there are projects which are on the paper only, and some of these projects are the creation of a pan-Armenian bank, the techno-park of Gyumri, Iran-Armenia railways, etc.
– That’s right, because a lot of time has passed since the announcement about a pan-Armenian bank but nothing has been done so far. The idea is very good though. The problem is that our ideas are very good but the potential is not so good. I don’t understand the government when they say that the construction of Iran-Armenia railways is an anti-crisis project because it needs to be done very fast if they are claiming it is an anti-crisis project. However, it cannot be done rapidly and the effect will not arrive soon.