"2008 WAS THE HARDEST YEAR IN THE PAST TEN YEARS"
A1+
[08:43 pm] 18 September, 2008
"2008 has been the hardest year for Armenia in the past ten years in
terms of inflation", told "A1+" former head of the Central Bank of
Armenia, economist Bagrat Asatryan. He commented on how the recent
international economic crisis could influence the economy of Armenia.
"Last week was set apart with the significant decline of stocks
in the market and serious events which took place in the financial
market. Early this week the nearly 160-year running "Lehman brothers"
company filed for bankruptcy, and many other huge investment companies,
banks and auditory organizations faced difficulties", said Asatryan.
The U.S. Federal Reserve is taking unprecedented measures to overcome
the crisis, however, the crisis is still not over and it is still
unclear as to what we will see in the American and international
markets.
How is the situation in Armenia? According to Bagrat Asatryan, Armenia
will see the influence a little later because, from the way he sees it,
"in terms of the financial market, Armenia is like a little mountainous
village where the snow has fallen, roads are closed, there is no
telephone and nothing will happen until the snow doesn’t melt, but
now it’s time to think about the melting of the snow".
Asatryan says that today the matter of huge concern and one that
is inevitable is the evaluation of the dram and the devaluation of
the dollar. It is not that apparent to the average Armenian citizen
because, as a rule, the fixed means of exchange is the dollar, but,
as Asatryan says, "we can’t only measure the dram with the dollar
because the direction in which our economy is headed doesn’t deal
with dollars, but rather with euros and when we talk about the dram,
we must not forget about the dollar-euro relation where we have a 10
percent dram devaluation. According to Asatryan, as a result of that,
this year we will see:
decline of economic rise
devaluation of the dram, as well as the dollar next year
high level of inflation (this year we have 10 percent and next year
it won’t be to our benefit)
flow of emigrants (Asatryan declares that Armenia will have a flow
of emigrants based on the results of 2008).
Asatryan believes that Armenia faces a dead end despite the fact
that economic issues are conventional and are not highly dependent
on the crisis.
"In order to solve the problem, we must do what we should have done
until now. We must reinitiate economic development and for that we
need political will and political solutions. Market relations are
impossible in a country where there is no democracy and no protection
of human rights-the two contradict one another."