Yesterday the National Statistics finalized the preliminary results of the past 10 months economic indices once again confirming that in Armenia the GDP slumped by 17.5%.
As we have already written a slump was registered in all the sectors. The worst was hit the construction sector – 41.6%. According to the National Statistics Service (NSS), despite the essential slump, the construction makes approximately 1/5 of the GDP. The NSS provides data about the foreign policy as well. The level of exportation was decreased by 40.7% and the importation decreased by 28.5%. But the structure of exportation is no less interesting in accordance with certain products. The statistical report says 48.8% decline in the construction sector lowered GDP growth indicator of Jan-Oct 2009 by 13.5 points, while at the same period a year earlier construction added 3.2 points to it. Official figures show that 10.7% decline in industry, including energy sector, hobbled GDP growth by 1.5 points against 0.7-percent favorable impact a year earlier. The table of the indices based on the NSS results evidently demonstrates the miserable situation in this sector. For example, exportation of metals of Armenia makes the majority of our exportation rates – 33.64%. The ratio of raw materials for minerals is not little either. It is over 18%. It turns out that only these two sectors over half of the exportation structure of Armenia. And this is registered in the case when the slump of the first one compared to the last year made 42.1% and for the second one – 33.5%. In all the other cases, as you see, we deal with ridiculously low figures. The ratio for construction and this structure of exportation best portray the diversification level of economy. Or it’s more accurately to say the absence of the latter. The government has recently started to speak about this issue more often. And several days ago during his interview to the Radio Liberty Aristomene Varoudakis, head of the bank’s Yerevan office, also spoke about this issue. In his words, Armenia shouldn’t rely only on one branch of economy in order to overcome the economic challenges. “When 30 percent of the economy is composed of income produced in one sector – in the case of Armenia construction; and when 40 percent of your exports are mining exports, then you are at risk,” Aristomene Varoudakis said. “So I think the main lesson that has been learned is that in order for Armenia to continue to grow as fast as in the past and reduce poverty in the future, the economy will need to be much more diversified.” Of course his data are different from the ones of the NSS, which can be explained by the differences of methodology. The important thing is that the meaning is the same. It is necessary to diversify the economy. It is hard not to agree with the thought that it is possible mechanically or with mere words. But there are several buts… Both the WB and the other financial organizations are responsible for the miserable state of our economy because all this has happened in front of their eyes and was supported by their recommendations. It is the result of their incorrect politics. We may think what’s done is done and that most importantly the WB and the IMF have decided to correct their mistake. However, Varoudakis’s statement, “if Armenia wishes to return to its previous rates,” doesn’t give us any grounds to think this way. This is stipulated by a simple reason that if the previous rates were considered “growth” then the criteria of growth haven’t changed. So the first place still occupies the numbers despite the fact that these numbers are there to only compliment others. And before learning the lessons from the crisis and prior to diversification of the economy it is necessary to do a very important thing – correct the mistakes, which unfortunately doesn’t take place so far.