THE RICH SUFFERED MORE

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12:53 pm | April 14, 2009

Economy

The UN predicts that 51 million people will be unemployed and the
world will suffer from humanitarian crisis in 2009.

The fact remains that the rich have suffered more from the economic
downturn than the poor. According to the International Monetary Fund,
the reason for that is because the poor mainly consume food products,
while prices for food have gone down worldwide due to the global
crisis. According to IMF Armenia Representative Ninke Omes, the rich
have recourses and rich friends and are able to easily overcome the
crisis. However, the poor don’t have that opportunity.

During today’s conference entitled "Social Impact of the Global
Economic Crisis on Armenia", Omes also brought up a couple of
circumstances that may help the poor overcome the crisis. For example,
the low inflation and stability of the financial sector are important
for, say, the needy to get loans. It is also important for encouraging
exports as a result of the floating exchange rate because that will
lead to creation of jobs. Omes believes that imports are also important
because the needy will be able to purchase products at a low price.

RA Prime Minister Tigran Sargsyan presented the plans and strategy
of the RA Government aimed at povery reduction. According to him,
pensioners are protected and the government has revised the budget
and made changes in expenses by making the transition to an operative
management, that is, quarterly expenses. According to Sargsyan, the
700 milion drams conceded to the RA districts is not used effectively
and the World Bank will also concede means for effective use.

RA Minister of Labor and Social Issues Arsen Hambartsumyan was
optimistic and noted that Armenia has made the transition from the
list of low-income countries to the countries with medium income. He
also noted that compared to 2004, in 2008 extreme poverty reduced by
54%. According to him, the rise of prices, 25% slash of transfers and
the reduction of people leaving for work abroad will have a negative
impact on the situation in the country.

The RA government’s anti-crisis plan is aimed at preventing,
extenuating the effects and stabilizing. The government needs
regulation of the legislation, increase in management effectiveness
and more. There are already 400 social programs in nearly 300 districts
and work is being done to provide 5,000 citizens with jobs.

Head of the World Bank Armenia Office Aristomene Varudakis underscored
that the WB predicts that Armenia will find itself in the risk zone and
may lose all that it has achieved if it does not take concrete steps.