PROGRAM OF NEW GOVERNMENT WILL NOT HAVE DESCRIPTION OF 21st CENTURY’S ECONOMY, ECONOMIST EDWARD AGHAJANOV SAYS

Noyan Tapan
May 1, 2008

YEREVAN, MAY 1, NOYAN TAPAN. The program of the new Armenian
government will not have a description of 21st century’s economy,
as this program gives priority to mining industry and metallurgy,
economist Edward Aghajanov said at the May 1 press conference. By
observations of international experts, Armenia will become either
marginal or competitive country. In order to achieve the latter,
according to E. Aghajanov, a shift should be made from the traditional
mode of economy to an innovation economic mode.

He said that the president and prime minister of Armenia have no idea
about the real state of the country, while in this case it is no use
speaking about the country’s development and creating a financial,
educational, health center in the region. "Our authorities are fond of
fairy tales. They are not aware that billions rather than millions
must be spent to achieve it," the economist said. In his words,
it is unrealistic to speak about such things when there is no stock
exchange and banking system in the country.

"When will our authorities become sober and take a serious approach
to this terrible situation: the competitiveness of the country has
fallen, the share of exports in GDP has declined to a terribly low
level – 12.5%, which has never happened in Armenia before," he said.

He pointed out that VAT makes up 51.2% of tax revenues of the
Armenian state budget. Whereas, 11 years ago VAT made up only 30%
of tax revenues. Besides, the share of income and profit taxes
in the total amount of tax revenues has declined as compared with
1996. "There is no such thing in any country. The opposite has to
happen. It means that in 1996, the tax burden was mainly on business,
whereas now it lies on people as it is the consumer who pays VAT,"
E. Aghajanov said. According to him, when buying bread, the Armenian
population in fact pays more money as VAT to the state than all the
businessmen taken together pay profit taxes.

From: Emil Lazarian | Ararat NewsPress