THE LIGHT DARK ECONOMY OF SUNNY ARMENIA

Lragir.am
18-09-2007 15:25:04

The budget is calculated by the rate of exchange of currency. The
budget of 2008 must be calculated by the present exchange rate of
the dram because a major fluctuation of the exchange rate of the dram
is unlikely in the upcoming few days, said Gagik Minasyan, chair of
the Standing Committee of Finance and Budget on September 18 at the
Hayeli Club. He thinks the 2.5 billion budget is realistic. He says it
is possible to provide this index through economic growth and battle
against black economy.

It is obvious that we have considerable reserves. I would like to
mention two. The first is the black economy, and I have said that in
the past few years the rate of growth of return on tax has exceeded
the growth of the GDP, and it means that we gradually increased budget
receipts. It should be noted, however, that the rates observed so far
are not sufficient, and we have considerable reserves. The first is
battle against black economy. The other is the enhancement of the
role of economic competition. Obviously, we have problems, Gagik
Minasyan says.

What he says is strange because the same monopolists and black
businesses ran in the parliamentary election and supported the
Republican Party and other pro-government parties. It is not clear how
the government is going to battle the businessmen who helped it come
to power. "I don’t want to evaluate. I want to mention the fat that
over the past 5-6 years black economy has been cut, so the answer of
the question is obvious," Gagik Minasyan says. On the other hand, he
says the government does not know where the black economy is. In that
case, how does it battle black economy and expect to have such a big
budget. Gagik Minasyan says they do not know where black economy is
but the ratio of return on tax to the GDP shows that tax collections
do not overlap with the growth of the GDP, in other words, there is
shadow economy.

As to the worries that with an economy based on building, dropping
amount of export and volume of industry we are on the verge of an
economic crisis, Gagik Minasyan is not worried. He says when a branch
of economy declines, the other branch develops because the Armenian
economy is not built on one sphere, and is diversified. "Like the
river which is nourished by a lot of obituaries. The amounts of
water in different obituaries are different. The amount of water is
different in different years as well. The obituaries keep the water
flowing in the river. Such is our economy, and not only ours but also
the economies of other countries of the world," Gagik Minasyan says,
reassuring that the budget of 2008 will be performed.

The opposition member of parliament Larissa Alaverdyan, Heritage
faction, who was hosted at the Hayeli Club for a debate with Gagik
Minasyan on the budget does not doubt. Nevertheless, Larissa Alaverdyan
says without changing the methodological approach to the budget we
will have a budget of survival, "a budget of justification of the
government." "The huge cash circulation shows there is no political
will to cut black economy," Larissa Alaverdyan says.

According to him, the Armenian black economy is lightest of all
because Armenia is not the country which can have major black economy.