IT IS NOT FAVORABLE FOR PEOPLE WHO RELY ON ARMENIA
James Hakobyan
Lragir.am
11 Aug 06
In Armenia a home political panic occurred, and the reflection of it is
not only the "maneuver" of the Republican Party. The exchange rate of
the dollar is perhaps a more vivid example of this panic. Of course,
when it is 40 degrees C outside, not only the dollars but also the
presidents on it would love to float, but it is impossible to float
all the time, for one can become tired and get drowned. And it is
not only impossible to swim all the time but also to remain in the
government. The elite in Armenia understood this, or part of this
elite. And the panic shows that they not only understood but also
understood everything may happen earlier than they could imagine. And
since it is not too late, they must use the possibilities of power. And
the exchange rate is one of these possibilities, maybe even the best
one. It is clear to a young child that with a low exchange rate of the
dollar one can buy a lot of dollars with fewer drams. It seems that
presently it is not favorable to buy dollars because it is growing
cheaper. On the other hand, it is not favorable for those people who
rely on Armenia, in other words, the citizens who do not have bank
accounts abroad and offshore companies. The same child would realize
that the government elite and big businessmen have such bank accounts
and companies. Consequently, they prefer the dollar to the dram. Hence,
by bringing down the exchange rate of the dollar they manage to buy
millions of dollars for a cheaper price at the expense of citizens,
who receive transfers, and tourists. It should be done as quickly as
possible, as long as they are in power. And they do.
However, they do this not only at the expense of citizens and
tourists. They accumulate millions at the expense of foreign projects
implemented in Armenia. These are implemented in dollars. It is clear
that in Armenia the dollar is exchanged for drams, consequently, the
cheaper they buy the dollars of Lincy, for instance or international
loan projects, the more they will buy. In fact, they are not worried
that the dropping exchange rate causes the costs of these projects
implemented in dollars to go up. For instance, if Lincy’s 60 million
dollars was calculated several years ago by an exchange rate, during
the implementation of the project, when the dollar amount comes to
Armenia, the exchange rate is quite different. With 60 million dollars
we deal with a difference of several million drams.
But we the citizens of Armenia deal with this difference. The
government does not have anything to do with it, the government is
concerned only about their own purse.
Especially that the sudden fluctuations and dropping of the exchange
rate of the dollar provides excellent conditions for maneuvers. The
point is that during implementation of Lincy or any big loan projects
some amount of money becomes "material for digestion".
Therefore, the money is never enough for the projects. The evidence
to this is the first project of Lincy, when the volume of work was
reduced because the money was not enough. For instance, in Gyumri
high rises were built with fewer floors. Hence, the juggling of the
exchange rate of the dollar is an excellent way for the government
to justify the shortage of money. The exchange rate went down, day
by day, and the money of the project is not enough. Let them not give
more money, at least they will not demand account for the past.