There is a joke: two guys are talking to each other and talking about the funerals of their fathers. One of them says that there were so many people that there wasn’t any free place to stand. The other one says that during the funeral of his father there were so many people there that they brought two coffins for everyone to see.
Maybe the comparison is not appropriate, but this is what I thought first when I found out that there were two conferences dedicated to the changes in the currency exchange rates-one of which was organized in the parliament, and the other one at the Armenia Marriott hotel by the participants of the “anti-criminal” political program initiated by oppositional parties.
Both of these conferences were organized to discuss the same issue; however the topics had different namtes. The parliament called it “AMD growth”, but the participants of the discussion at Marriott hotel named it “Fall of the USD”. There is a good joke about the same “thing” being in two different places, but that thing is not “a good thing”. Nevertheless, there are officials that say that “it” is a good thing.
Let’s start from the parliament. The main speaker was head of the Armenian Central Bank, Tigran Sargsyan. He said that the growth of the national currency was causing many problems for several groups of citizens (exporters, citizens receiving money transfers from abroad, citizens that get their salaries and make savings in USD). The CB president also spoke about the reasons for exchange rate growth. As it was expected, the first factors in the list of reasons were “the rapid economic growth” (mainly in the field of services and construction) and big investments in Armenia (in USD). I don’t want to give explanations as a professional, nevertheless, it is worth mentioning that the head of the CB thinks that the CB does what it has to do well, controls the inflation rate and the changes are conditioned only by market factors. As for the fact that our economic policy is not due to the exchange rate, but inflation, it is not the fault of the Central Bank since that policy was adopted by the parliament. The CB president also discussed the recommendation of adopting a policy of fixed rates and brought the example of Argentina and said that such a policy may bring to an economic collapse. The CB president concluded that “there is no alternative to the policy of controlling inflation”. Sargsyan could not speak about the other solutions that he would propose since there wasn’t enough time.
As for time, the only one in the parliament that needed much time was Hmayak Hovhannisyan. Hovhannisyan first of all spoke about the “mechanisms” of the CB and then discussed with Gagik Minasyan whether it was efficient to use the word “mechanism” or not. Gagik Minasyan found a contradicting idea during the speech of Tigran Sargsyan. Tigran Sargsyan said that rich people benefited from the increase in prices since they kept their savings in dollars. Based on that, he brought up an example of money investments and spoke about the 45 buildings that are being built in the center of Yerevan. Hmayak Hovhannisyan said that oligarchs did not keep their money in their homes and invested that money in real estate in order to save their money. Nevertheless, the people that get $150-200 don’t have an opportunity to save their money. The deputy wanted to say more, however he didn’t have time and compared the session with despotism. However, the deputy had an opportunity to express his ideas and went to the conference at the Marriot at 13:30 along with some of his fellow deputies.
The atmosphere at the Marriott was different from that of the parliament and the main difference was the fact that the discussion was headed by Aram Karapetyan and Artashes Geghamyan.
Artashes Geghamyan brought figures from the reports of the statistic services and showed the huge losses that the state had. Mr. Geghamyan said that the reason that the exchange rate changes were conditioned by market factors was just a trick since the economy registered a double-digit economic growth mark in 2002-2003 and parallel to that the national currency didn’t grow, but rather went down. He said that the real reason was “production expenses”. “They had to spend a lot of money in 2003 and thus they decided to pay those expenses by taking the money from the people. And they managed to do it this way”, said Mr. Geghamyan.
Geghamyan said that it was not correct to compare the current situation with “the Dutch illness” since in spite of them we haven’t found any mining resources and our export is going down. He also that the current situation is beneficial for importers since they are close to the authorities and have monopolies in the market. H. Hovhannisyan also spoke about what he had said (or wanted to say) in the parliament. This time Paruyr Hairikyan didn’t speak about Armenian grammar and generally said that it was absurd to discuss issues with the authorities.
The CB representative was Vardan Aramyan, who was given an opportunity to speak as well. Aramyan was pressured and criticized a lot. In other words, his colleagues let him down by asking him to go there. V. Aramyan said the exact words that the CB president had said in the parliament a couple of hours before that. Nevertheless, here the participants were more active, especially after the speech of Artashes Geghamyan. It is worth mentioning that V. Aramyan used professional terms and explained the issue in the “language of their profession”, which was not understandable and was boring for most of the people gathered; they were confused. That confusion could lead to something worse if Aram Karapetyan didn’t say that the participants should thank that guy for at least being brave enough to go there and take part in the discussion.
The discussion about the anti-criminal program participants was closed by head of “Fatherland and Honor” party, Garnik Margaryan. Margaryan said that the only solution was to make the current “criminal” authorities resign as soon as possible. Mr. Margaryan said that it would help solve the economic problems since there were clever people that would help them do that.
Now let’s try to summarize all the information mentioned above. We don’t know who said that it was a hearing, but I think that a hearing is not the word here because everyone was speaking more than listening.. I think that it would be better to use the word “speaking”, of course if it were applicable to use such word.
In spite of the fact that the speaker of the parliamentary hearing, G.Minasyan, head of the NA faction on finance and budget issues, had come to the parliament with optimism and hoped to lead the hearings to a happy ending, however the other deputies were not optimistic and the end was not so good as G. Minasyan expected. Everyone had come to the parliament with the purpose of developing their own theories and advocating their own approach.
The CB said that they were doing everything that was correct in the given conditions. We wonder who is in charge of that “correct” policy. Oppositional powers believe that the current Armenian authorities are to blame for the problem, but they say that the problem has to do with the criminals. The opposition recommends making the authorities resign to solve those problems. However, it is a fantasy to believe that one day the political powers may collaborate jointly and propose solutions for the purpose of working the problems out.
Recently, “168 Hours” organized discussions at the “Pressing” club of “168 Hours” dedicated to the causes and effects of the currency exchange rates.. At the end of the discussion we asked all the economists to send us their point of views, theories and solutions. We also wrote that we were ready to coordinate all that information, send it to the interested groups and parties and organize a larger discussion on that topic in the future. However, we haven’t received any solutions and proposals so far. We understand that it may not be interesting for the government. However, we wonder why neither of the other groups or parties wants to make recommendations and come up with solutions. Aren’t they interested in solving the problem? Are they afraid? Doesn’t it matter to them? Do they think that nothing will help solve the problem? Aren’t there any specialists? However, we don’t think that anything may help the problem since there have been many such discussions, but the problems have remained unsolved. We don’t think that the mentioned discussions may help solve the problem and everything will stay as it is: the rates will change again, people will be disappointed, the opposition will criticize the current policy, and the authorities will continue doing what they are doing now. No, please don’t get the wrong idea; Armenia will have double-digit economic growth marks again.
P.S. All the abovementioned information reminded me about the saying about a crayfish, swan and pike, which were not able to carry a carriage in one direction. Recently I read a new version of this saying: the swan and pike don’t want to go anywhere; they buy beer and drink it while trying the lobster.