POSSIBLE TO OVERCOME THE FINANCIAL-ECONOMIC CRISES BY COMMON SENSE
GEVORG HARUTYUNYAN

Hayots Ashkhar Daily
28 Nov 08
Armenia

The National Assembly confirmed the bill on the state budget of 2009,
by 81 for, 2 abstained and 5 against. On this occasion the
correspondent of Hayots Ashkharh daily had interview with the Chairman
of the NA Committee on Financial-Credit and Budgetary issues Gagik
Minasyan.

`Mr. Minasyan what economic and financial goals will the state budget
of 2009 pursue and what problems will it solve?’

`The income section of the state budget of 2009 makes up 905,4 billion
drams, the expenses ` 945,4 billion drams and the deficit ` 40 billion
drams. 9.2% economic growth is previewed and the index of the inflation
is 4+- 1,5%. These are the main indexes characterizing the state budget
of the coming year.

In my view if in 2009 the world market appears under serious financial
and economic influences, the indexes of our budget will be rather
affectionate. So what we need is to predict all the possible and main
risks and elaborate measures to mitigate their influences.

The economic and financial crises are usually spread by means of the
financial system. Thanks God our banking system is rather stable and
predictable. It is the consequence of the strictness of bank
legislation, according to which the central bank controls the activity
of the commercial banks. This is the reason why unlike many other
countries we managed to resist the first, financial section of the
economic crises and we managed to avoid the chain manifestations of
bankruptcy.’

`What do we need to mitigate the influence of the world recession?’

`The second stage of the crises, financial-economic crisis is quite
predictable. The volumes of consumption and economic activeness will
reduce in the world economy and in this case we will also bear serious
risks. Our exporting values will also reduce, because we mainly export
products of mineral-raw sphere, the consumption of which has
significantly reduced in the world market. The consequences can differ.
The budgetary entrances can also reduce because those assortments will
not be produced and will not be exported. Certain job cuts are also
expected especially in Syunik and Lory. The reduction of money
transfers is one of the possible risks, as it is not a secret that the
majority of our citizens work overseas and their families solve their
social problems by the financial means received from overseas. Whereas
in the Russian Federation for example the financial economic crises has
significantly spread and the volumes of construction has abruptly
decreased. And it is also not a secret that our country receives the
main money transfers from the Russian Federation. And if due to
recession our compatriots are deprived of their jobs in overseas and
they return to Armenia, we will face the second consequence: surplus of
employees.’

‘What change is excepted in the prices of our goods-market?’

`Financial-economic crisis leads to the fall of economic activeness.
They usually don’t buy the things that they don’t need at that moment.
According to the rules of the market the reduction of demand leads to
the drop of prices. Essential drop of prices is noticed especially in
the fuel market.

In this regard it is noteworthy that in our country the prices of the
goods are far not elastic and they are not as flexible as the prices of
the international market. But due to the active interference of the
Committee on the Protection of Economic Competitiveness the prices of
some assortments have dropped. In my view this process should be
ongoing.

I’m confident the stable state of our banking system will make our
compatriots and the citizens of other countries who have problems with
other banking systems, to make investments in Armenian trustworthy
banks. It is a serious method to overcome the crisis, and correct
activity in this sphere can insure a flow of huge financial means, big
quantity of credit means and reduction of interest rates. As a
consequence of the before mentioned, we can manage to ensure even
greater index of economic growth, than previewed.’

From: Emil Lazarian | Ararat NewsPress