Our society is informed once again. In his interview, CB Chairman Tigran Sargsyan once again mentioned that the national AMD is going keep revaluating. The explanation is again the same: “significant financial inflows, in particular foreign transfers, and at least 10% economic growth.” These are the factors that conduce to strengthening the national currency. The CB chairman is not the only one to claim these things. The society is not surprised any more by the continuous revaluation. They are only interested in one thing. Till when? The revaluation of the AMD, which started in 2003, has caused numerous negative consequences. In the opinion of domestic and foreign experts this process has already changed the surrealistic economy of Armenia. The revaluating AMD broke the margin of 500 AMD per 1 USD in December 2005. It overcame the line of 400 per 1 USD in August 2006. At the moment Sargsyan was giving an interview, the USD was worth 340 AMD. So far, no reasonable answer was given to this process. Because of this, I will dare to bring up my own explanation. I won’t hide that I’m not the author of this reason. My explanation is based on economics just as our overall economy is. It means that it doesn’t have classical grounds. It’s all about ambitions. Ambitions, that is, simple, human weaknesses. First let’s start by the review of the official statistics. In 1998-1999 the Armenian GDP was a little less than 2 billion USD. During these years the statistics service was calculating the GDP per capita. This is a serious index for the assessment of a country’s economy. But no one was serious about this because our country officially has 3 million 700-800 thousand population. Then our country suddenly started to develop by a double-digit economy. Meanwhile the main macroeconomic index was increasing – the GDP of 1999, which was 987, 4 billion AMD jumped like a tiger to 2665036,5 billion AMD in 2006. (I think it’s time to apologize to readers who don’t trust official data. Besides that it’s very hard to figure out the major difference between the two numbers. But being loyal to our state figures we have to mention big numbers.) For a long time the National Statistics Service was refusing to seriously relate to those numbers. But something changed in 2005. In the GDP index of that year, the number was mentioned in a special line in currency per capita. This year, this number was shown in USD – the GDP 2005 per capita is $1513. Let’s remind that the census has already been conducted and the population of the country was “unloaded” by about 750,000. It’s not hard to imagine the next index based on the fact that our economy keeps developing like a leaping tiger. In 2006 the GDP was 1989 USD per capita. They also for the fist time mentioned this index in Euros – 1587 Euros per capita. It’s already clear that another double-digit number is planned to show for 2007. This means that if last year the GDP was 2665036, 5 billion AMD then this year it will be over 3000000. “What a big and absurd number is this?” you may ask. And I will have to answer you in this way by breaking the law, “It has a long-term purpose.” This index has an ambitious essence. Do you remember that the CB chairman mentioned that during the past 3-5 years the USD was devalued by about 50% in Armenia and that that process is going to continue? Now I think it’s time to present the non-economical reason which, in the opinion of many experts, becomes a reason for such a process. Moreover, it even shows to what extent the USD is going to be devalued in the near future. Don’t be surprised if by the end of the year the USD costs 300 AMD or even a bit less. In the event of such circumstances, our country will show a very interesting index. The multi-digit number of the GDP will be shown in a quite compact USD ratio. It will turn out that due to our government the GDP reached the 10 billion USD margin. The GDP per capita will be 3000 USD. Can you imagine what a glorious speech President Kocharyan is going to make at the completion of his term in office? When Kocharyan came to power the GDP was only 2 billion USD, and now he’s going to pass his legacy to the next president with a 10-billion USD GDP. The leading economists will also accompany him. Who cares about the actual situation of the country? This is not important any more. What is important is that the GDP was raised 5 times. This will be possible if the USD reaches the 300 AMD margin and less. In the number game, the economy has really sprung like a tiger. Only de facto though! Too bad I’m not the author of this explanation, which looks pretty reasonable.
