All forecasts concerning Armenia’s economy degradation are reality. Such announcement was made by economist Andranik Tevanyan during yesterday’s press conference. He says that the illusion of the economic stability is a result of the fact that the national currency is keeping stabile, which provides short-term stability, but in the mid-term and long-term context it reminds about a situation when a drug addict is given drug and he feels good at the moment but everyone knows what will happen later. According to Tevanyan, the Armenian government does not do anything besides installing cash machines, asking for borrowing from other countries and making people play lotteries. However he believes that the economy is in very bad situation and the stability of the currency is illusion and the government is keeping such stability on the expense of spending the foreign currency reserves. If the reserve fund is equal to the capacity of import for one year, it means that the country is in good stand and secure situation, when it is equal to the half of the import capacity, the situation is becoming dangerous. Tevanyan says that currently the reserve fund of US dollar in Armenia amounts to the 3-4 months capacity of import as the total sum of imported products is about 3-4 billion and the dollar reserve is less than one billion. The economist says that instead of real activities the government is busy with campaign tricks and does not have a crisis fighting plan. He says that the government is advertising itself and campaigning for its image, for example by informing that it has cancelled the income tax and other taxes of the carpet production field. This is a simple campaign trick and does not bring to any positive results. Tevanyan says that during the past several years carpet production has not been profitable in Armenia, thus there was not profit tax to pay. He says it is funny to cancel the tax of a business that does not have any profit to pay that tax. Besides that, carpets produced in Armenia are for export, which means that such businesses don’t pay VAT because the export is free of VAT anyway. The economist says that according to the law when carpet producers import raw materials for carpet, they pay VAT, but upon exporting they are to get that money back. He says that often businesses don’t get the mentioned money back despite the law requirement. In fact it means that the government’s decisions allegedly aimed at encouraging businesses don’t have any factual benefits and are used for campaign purposes only.
In order to prevent the crisis and encourage development the economist recommends to change the tax legislation and significantly decrease the taxes, temporarily stop the installation of cash machines for small businesses, find a political solution in the field of big businesses, provide equal opportunities in business, adopt an anti-monopoly law, establish a corresponding ad hoc independent commission, implement a policy of low interest rate and slowly transfer to the policy of floating rates, as well as subsidize agriculture.
Lragir.am