“Now we have a very important document, which is very important for becoming a topic of active discussions,” said economy minister Tigran Davtyan to journalists and added that the mentioned document was a result of experts’ research.
According to the minister, the mentioned ‘interesting document’ is dedicated to Armenia’s production and export issues. The document involved the strategy of economic development and answers to a number of questions such as how the strategy of the country will be in terms of economic and production issues. “In fact the document has two levels. It involves the economic and production principles, i.e. the tools. It also sets forth 11 sectors, which are priority for Armenia. From this prospective we will try to explain the situation with numbers and specific information, what our policy will be and what capacities and turnout we are expecting to have,” said the ministry of economy and presented the first three priority sectors. The priority three sectors are precise machine building, pharmaceutics, food production, including wine and cognac production. “These are priority sectors for us because they are very important first of all from the prospective of export,” said T. Davtyan. State officials of course know how the people and society relate to different strategies and projects. As a rule projects stay on the paper. From this prospective the prime-minister says that this document is going to be different as it will specify the actions by the government to develop the economy. This will be more specific. MP Gagik Minasyan says that the export projects will enable to increase the export capacity to 3.5 billion dollars in 2015, and 5.5 billion in 2020. In other words, the officials in charge of the economic policy believe that the mentioned strategy will help to recover the economy and foster export.
On the other hand, if we look at the official statistics, the situation with export is not so bad. For example, during the period of January-September of this year the growth of export was 32%. During an interview Tigran Davtyan said that the export tendency was good and they expected 20-25% export growth in the end of the year.
However, in fact there is the other side of the coin too and the mentioned growth of export is not such a big deal for the economy. Why this 32 or 20-25% growth is not a real growth? In order to answer to this question we can analyze the composition of export of different types of products and prices. This information is published by the state incomes agency on quarterly basis. The latest information published by this body concerns January-September 2011. Let’s look into this data, where the export capacity for the first nine months is higher (39%). During January-October 2011 the export capacity was 985.3 million dollars, whereas during the previous year it was 709 million.
In addition, there is another document called “Higher customs fee products exported from Armenia” (1-9 months 2011). The first place in this list is given to copper materials and the export of this line during January-October was 201 million dollars. This is the one-fifth part of the entire export capacity. In the same period of the previous year the customs value of export was 149.4 million. This means that only in the line of mine stones and copper the export has grown by 50 million dollars, or by 34.6%. However, the picture is totally different when we look at the capacity of the export (how many tons). This year 85.590 tons have been exported, which is less by 1.7% than in the previous year. In other words, the export growth was due to the increased prices.
In a word, 54.2 million dollars out of the exported primary products value of 201 million was due to inflation.
The chart below illustrates calculations concerning several types of products to show how inflation has influenced on the foreign trade.
Only the increased prices of gold have resulted in adding 15.4 million dollars to the export, and the increased prices of diamond add 32.8 millions. We have discussed only the mining sector products, but if we look into the other sectors as well, we will see that inflation has resulted in the growth of export capacities.
Of course there may be people who will say that in almost all countries inflation is resulting in the increase of export values. But if it is the case, why would the government spend resources and time on developing shiny strategies? Instead of that they can pray to ask the international prices of metals grow. This can help because last time the government prayed for the agriculture sector harvest and it helped.