OPPOSITIONAL ARMENIAN NATIONAL CONGRESS OFFERS ITS WAYS OUT OF CRISIS DEVELOPED IN ARMENIA

ArmInfo
2009-03-04 10:36:00

ArmInfo. Having refused of the policy of a fixed rate of the
national currency, the Armenian authorities confirmed the forecast
of the oppositional Armenian National Congress (ANC), its economic
Commission, in particular, the first President Levon Ter-Petrosyan
saying the authorities fail to long carry out a fixed rate policy,
the ANC statement, received by ArmInfo, says.

As the message recalls, on March 3, the Central Bank of Armenia made
a decision on refusal from a policy of a fixed rate of the national
currency, as a result of which the Armenian dram has cheapened by
20% at once. ‘CB gave no clear explanations on the further policy
with respect to the national currency, and this decision created a
chaotic situation in the market’, the message says. It also emphasizes
that the ‘decision, which led to the present situation, is a result
of ignoring the whole depth of the global financial crisis by the
authorities’. ‘The Armenian National Congress has multiply warned
about the necessity of carrying out of a floating rate policy and
termination of wasting of foreign reserves under the conditions of
the global economic crisis’, the message says.

‘The policy of the incumbent authorities is a result of a possibility
for conscious use of the situation fo r robbery rather than a result
of non-understanding of the reality’, the message says. Over $800
mln were thrown in the internal market of Armenia from the foreign
assets over the last 4-5 months under the guise of maintenance of the
national currency, which found their place in the pockets of about
twenty oligarchs and officials.

‘The depreciating dram and its aftermaths were the result of the
transfer capital formed by Kocharyan’s administration and the
model based on criminal and oligarchic system which the present
administration was loyal to yet not long ago’, the statement says. It
says that if the country started the policy of ‘floating rate’
instead of the fixed rate in October-November, it would be possible to
considerably soften the aftermaths of the crisis. In the meanwhile,
the sharp rise of the US dollar on March 3 led to hourly growth of
prices, uncontrolled high inflation, low danger of external assets,
4-fold excess of import over export, and an unprecedented low level of
tax collection (40-50%), as well as the problem of liquidity growing
day by day. All this may lead to social catastrophe, bankruptcy of
small and medium-sized business, worsening of financial figures of
commercial banks, hereby bringing surplus profits to importer-oligarchs
and high-ranking officials.

All this creates atmosphere of public distrust in the government
policy. In such situation, it is necessary to transfer to the policy
of ‘floating rate’ immediately, to rule out the interference of the
Central Bank and to stop wasting external assets. It is necessary
also to take immediate measures to prevent surplus profit from
essential commodities, to monitor the import of goods, to reduce
gas and electricity tariffs. In addition, regulating bodies should
implement transparent policy and toughen control to prevent monopoly
in the market. The Congress also proposes revising the budget for
2009 to reduce expenses on government staff and to stop funding the
projects not aiming economic growth.

To overcome the crisis it is necessary to temporarily stop reformation
of tax administration, in particular, reduce the tax base for the
small and medium entrepreneurship, stop the policy of compulsory
installation of cash registers, postpone the terms of fulfillment
of the requirements with respect to the taxi drivers. To prevent
withdrawal of the bank deposits, it is also necessary to increase the
guarantees on return of deposits from the present 2 mln drams to 5
mln drams, notify the population about the measures to be taken and
provide the public with daily and true information.