Prime minister Tigran sargsyan totally believes in people’s saying that repeating is good for science. Based on the content and geography of his announcements it is evident the ones that need repetition and knowledge are the MPs of the National Assembly.
On Saturday Tigran Sargsyan made a presentation on the implementation of the budget 2009 in the parliament. It is normal that he had a speech, but it is not normal that in his speech of 6-7 pages there was nothing new. All what was said on Saturday had been said in January, February and other periods as well. “As we know, the crisis affected the Armenian economy starting from October 2008, and the fall reached the maximum point in July 2009. It is worth mentioning that one of the negative reasons was the composition of the GDP before the crisis, in which around 27% was occupied by the capital construction business sector, and 61% of this proportion, or the 16,4% of the GDP, was occupied by the sector of non-production building construction,” said the prime minister.
Since October everyone was serious and concerned of the crisis besides the government members and some MPs, for example the head of the NA financial and credit committee Gagik Minasyan (the prime minister made the presentation to his committee specifically). Everyone discusses the ratio of the construction sector in the GDP without any reason. However, this time the prime minister added some new things, specifically he said that 11% of the economic slump out of the slump of 14,2% during 2009 was due to the construction sector. It means, that if the construction sector is not taken into account, the economic slump would be 3.2%. It is very strange that in parallel with criticizing the construction “balloon” the government is taking measures to revive the same “balloon”. Below are some examples.
-On the account of the state budget 2009 the RA city construction ministry and regional administration offices ordered and implemented construction of and capital reconstruction of 266 buildings, which amounted to 14 billion dram (227 educational institution buildings).
-In 2009 in Gyumri city totally 22 high storey buildings with 1056 apartments were built and 220 houses were built in Spitak. The budget provided financial support to finish the construction of 3 high storey buildings in Stepanavan city, and reconstruct 20 apartments in #34 building of Maralik.
-The budget provided 25 billion dram for construction purpose in the earthquake zone.
-The operative headquarter also decided to provide guarantees worth of 3,5 billion dram to 5 construction companies in 2009.
Of course no one says that building educational institutions or construction in the earthquake zone is a bad thing. However, it is not good to represent it is an anti-crisis action. It turns out that these works would not be done if there was no crisis. In addition, the prime minister claims that the “National Mortgage Company” was established to solve the people’s social problems, as well as activate the construction sector. Up to now this company has provided financial loans and credits worth of 4.4 billion.
All these efforts are done for the praised sector of construction, which has brought a result this year, i.e. in the period of January-April 2010 the growth of this sector reached 8.8%.
What else have they done? This question s adequate because during the past year they have done a lot of actions connected with borrowings and credits. As the PM said in his speech, Armenia received $350 million from the World Bank, $500 from the International Monetary Fund, $80 million from the Asian Development Bank, $500 million from Russia, $100 million from the EU, etc. It means that during 2009 Armenia received totally $1.5 billion. A part of this money was spent on covering a part of the budget. Another part was spent on improving the business environment and supporting small and medium businesses. By saying that they are supporting it does not mean that they have helped the businesses because they gave this money with very high interest rates. Most of the money was spent on improving the infrastructures “for the purpose of opening new jobs in a short time and supporting the development of the GDP, and in the long-term run it supports the growth of the economic efficiency and the production by establishing firm grounds for future economic development.” It covers the financial support for construction, road construction, drinking water pipes reconstruction, reconstruction of different water storage and pumping units, building water pipes, etc. The operation and reconstruction of Yerevan HES is included in this work as well.
It is hard to say that these were anti-crisis efforts because these things had to be done anyway. In fact the money received from other countries was received not on anti-crisis projects but to float on the surface of the water. Everything is simple. In other words, it is like a man who is not doing the right thing and is always being faced with difficulties. Later this man borrows money, but he does not spend this money to continue his work and project but spends on daily expenses such as food and cigarettes.
As for the lessons learnt from the crisis, diversifying the economy, construction growth and exporting production, these are not real at present and they are speaking only beautiful words and there is nothing behind those words.