ARMENIAN ECONOMY SERIOUSLY SICK: EX-PREMIER

ARKA
Apr 17, 2009

YEREVAN, April 17. /ARKA/. Armenian economy has always been and
remains seriously sick, Armen Darbinyan, rector of Armenian-Russian
(Slavonic) University, Armenia’s former finance minister, said Friday
at a conference of the genesis and prospects of the global crisis.

He called it a Dutch disease (or the Groningen effect – i.e. an
economic effect connecting natural resource development with shrinking
industrial output – ARKA).

"Though we are not an oil producer, we get unearned currency that
affects our domestic policy much," Derbinyan was quoted saying.

According to the RAU rector, Armenia has failed to shift from the
import substitution to exports boosting policy.

"We have failed to find a way to boost exports and increase
foreign-currency earnings," he said, pointing out the lack of economic
guidelines.

"We were talking about turning Armenia a tourist resort at the peak of
the Dutch illness, when we dollar proceeds were chocking our economy,"
Darbinyan added.

Touching upon the total hunger for investments, he said Armenia failed
to find effective measures to attract foreign investments, citing a
slowdown in direct investments in Armenian business. "According to my
estimates, it is around $350mln, which is nothing compared to around
$3bln currency transfers," the RAU rector said.

According to the RA National Statis tical Service (NSS), foreign
investments inflow rose 48.8% year-on-year to $1,257.6mln in 2008
(without loans extended by state agencies and banks).

During the period under review, direct investments in Armenia’s
economy totaled $1,000.9mln – a 71.9% year-on-year rise. Overall,
foreign investments were 79.6% of total foreign inflow last year,
compared to 68.9% in 2007.

According to the monthly review of the Central Bank of Armenia,
some $1,635.3mln was transferred to individuals in Armenia via the
country’s banking system – a 23.9% ($315.8mln) year-on-year rise.

From: Emil Lazarian | Ararat NewsPress