It is said that during elections promises are given by candidates, and later professionals have to be responsible to citizens for those promises. In our country this formula is the same. In addition, there are some harsh critics and aggressive moods too.
I have numerously criticized the economic policy implemented by the authorities and tried to propose solutions for the problems. However, those critics and suggestions that are being done now are out of economic dynamics and logics.
First of all let’s see who the ones that are criticizing are. It is normal if those criticizing are citizens, who have suffered by unfair privatization, monopoly, corruption, businessmen or economists. But if it is done by those people, who were the ones who cooked that pie, the only thing we can do is asking them what was happening in 1990-1998.
Privatization. Most part of the national wealth of our country was privatized in violation of the law on privatization adopted in 1992 and upon privatization those entities were underestimated. Let’s remember about the fact that the wine factory of Meghri was privatized against 22 certificates (the market price of each certificate was about 3000) or 66 thousand drams. The heads of ANM chapters bought the wine factory of Parakar by paying just 315 certificates, the sewing factory of Aparan by paying 250 certificates, the shoes company of Yeghvard – 3880 certificates, the watch factory of Yerevan – 17.240 certificates and other companies. It is worth mentioning that during the first president’s tenure the main rule of privatization was violated, which is that a company should be privatized only if it is working with losses and it is justified that its management by the state is ineffective. There is no example showing that in that period there was any company which worked with loses before privatization and started to work with profits after it. It is the vice versa: many companies that worked with profit were underestimated and privatized, the companies stopped operating and their properties were sold and embezzled.
Monopolies. Let’s not forget that one of the worse monopolies, Armentel was privatized during the tenure of ANM and even now we can’t get rid of the results of that poor transaction. I think there is no sense to refer to each field separately where the tradition of monopolizing started. The mentioned tradition also includes embezzling properties of factories, raw materials and even new equipments and exporting them as cheap metal. Such fact is also exporting numerous military technical units as cheap metal from the country, which was in war. There is no need to speak more in consideration of the fact that people remember everything and that there are some security issues.
Currency exchange rate variation. In 1993 by ignoring the currency purchase parity principles (we don’t know who those genius economists were who made those calculations) the relation of dollar was defined not at 100 dram per dollar, but at 1:14,5. As a result of this wrong calculation inflation grew to hyperinflation just during several days. Another major mistake was the lack of coins with issuing paper money in circulation. Thus, if the price of one box of matches had to be 10 luma, in the absence of such coins the price was increased to the extent of corresponding to the smallest paper money. This is another reason of the national rapid inflation, which continues to undermine the national currency now too.
Banking system. Generally the monetary policy implemented during the tenure of ANM was specific in consideration of malformation of the banking system. It is very surprising that there is a provision in the platform of the first president, which concerns him because he didn’t even try to solve that problem during his office. This is the provision concerning the credits deposited with the Savingsbank, the responsibilities for which are given to the next governments. Now the first president promises that he will “Form the credit debts to citizens from the Soviet times as state obligations and cover those debts twice faster in twice more capacities than contemplated by the law adopted in 2005”.
In fact, the above mentioned points are not separate parts selected from the program. It is a pity that the first president’s team members in charge of economic issues are too far from willing to make simple economic calculations. Such calculations are missing not only in the program named as “Quiet thoughts”, but also in the candidate’s public speeches. As soon as the government announced about increasing pensions by 60% the other candidates started competing and promising to increase more. Some of the candidates promised to increase the pensions twice, others – for three times, but the first president promised to increase pensions by four times. Let’s make calculations: if pensions are equal to one hundred dollar now, after increasing the pensions by four times each pensioner will get about four hundred dollar, thus if we multiply the mentioned amount by six hundred thousand pensioners, we will see that the first president will need twice more money than the existing budget in order to cover only stipends. Has any economist participated in making such “realistic” calculations? We don’t understand this point at all also in consideration of the fact that the first president also promises to decrease the taxes.
We can bring more examples. In such case we don’t expect any in-depth economic knowledge on the part of the candidate, but his team members should think more before giving such unrealistic promises. These are promises, which don’t help the candidate’s image. By the way, the topic “team and team members” is more modern. These are the people, who will be more responsible later than now. They will bear more responsibility in the future when they try to fulfill their promises. However this topic is out of our observations and is to be discussed separately…