INTERNATIONAL STRUCTURES CONCERNED OVER ECONOMIC SITUATION IN ARMENIA

PanARMENIAN.Net
17.10.2009 GMT+04:00

Regional integration will provide economic growth in regional states,
IMF Executive Director Ambroise Fayolle stated, commenting on possible
consequences Armenia will face with RA-Turkish border opening. "IMF
experience in other regions proves opening of border and regional
integration promote economic development in the country," he said.

Still, Ambroise Fayolle fount it difficult to provide exact forecasts
over consequences of opening border with Turkey for lack of research
data on he issue.

/PanARMENIAN.Net/ 2010 Economic growth in Armenia will comprise
1.2%, Ambroise Fayolle stated. "RA economy will be restored through
government-implemented money-and-credit and fiscal policy as well
as international financial assistance, registering a minor growth of
1.2%," he noted.

In this context, Fayolle noted that Armenia was among states, most
impacted by financial crisis; still they "hope to be mistaken in
forecasts".

IMF forecasts 15% economic downturn in 2009 in Armenia.

*

President Serzh Sargsyan and the board of International Monetary
Fund’s (IMF) Executive Directors, have made assessments on Armenia-IMF
cooperation. Fund representatives stressed that Armenia had perfectly
complied with its commitments.

During the meeting, parties exchanged views on problems caused by
global financial-economic crisis. Sargsyan said that all possible
measures were being taken for making effective use of existing
potentials and financial resources.

*

Armenia, of course, must be prepared for different scenarios in
the process of normalization of Armenia-Turkey relations, RA prime
minister of Armenia Tigran Sargsyan said.

"Naturally, we must be prepared to different developments." According
to the Prime Minister Armenia must be ready for the scenario when
the border with Turkey may not open. "For this case, the government
has already developed a strategy," the Prime Minister said.

Tigran Sargsyan added that the Armenian-Turkish relations are
conditioned only by the opening of the border. "First and foremost,
these relations are moral, psychological, and cultural. In this
respect, we and the Turks have the feeling of inferiority originating
primarily from the Armenian Genocide, " the Armenian prime minister
stressed. He emphasized, that the recognition of the Armenian Genocide
by Turkey first of all is on the agenda.

*

The European Commission proposed on the 14 of October 2009 to the
Council to provide macro-financial assistance to Armenia, in the form
of a loan of up to ~@65 million and of a grant of up to ~@35 million.

The assistance will support the adjustment program agreed by the
Armenian government with the International Monetary Fund to help the
country through the global crisis.

The proposed financing will complement the financial resources provided
by the EU, in the form of budget support programs financed under the
European Neighborhood and Partnership Instrument.

*

The World Bank Managing Director, Ms. Ngozi Okonjo-Iweala, will travel
to Armenia, Georgia and Azerbaijan on October 17-21. The aim of her
visit is to discuss with the respective governments, development
partners and civil society the impact of the financial crisis in the
South Caucasus and to find ways to help ease the crisis and enable
sustainable economic growth.

*

A memorandum on the "Legal Protection of Small and Medium Enterprises’
Economic Competition" was signed in Yerevan on October 16.

The trilateral memorandum was signed by RA State Committee for the
Protection of Economic Competition, YSU Center for European Law and
Integration and Brave legal company.

The document is aimed raising society and business circles’ awareness
of protecting competition.

*

Armenia ranks as the 10th country in fight against money laundering
and terrorism funding, Head of RA CBA Financial Monitoring Centre
Daniel Azatyan told a news conference in Yerevan.

He told journalists that a leading country in the list is Slovenia;
Cyprus, Hungary and Baltic states come next. All CIS countries
fall behind Armenia, with Russia ranking as the 13th and Ukraine as
the 25th state directly followed by Georgia. Azerbaijan is the 25th
country in the list. Countries like Serbia, Macedonia and Montenegro
were not included in evaluation report.

*

RA Government intends to gain time till the crisis is overcome in
developed countries, ARF Dashnaktsutyun financial counselor, RA MP
Ara Nranyan told PanARMENIAN.Net reporter, commenting on RA government
-implemented anti-crisis policy.

According to him, in the beginning of 2009, RA Premier issued
statements on the necessity of anti-crisis activities, yet, upon
receiving international credits, structural changes scheduled were
forgotten.

In this context, ARF Dashnaktsutyun financial counselor added that
the next crisis will affect RA economy more severely unless structural
changes are introduced to increase the level of economic security in
the country.

*

Discussion of the draft law "On the anti-trust regulation" was held
in Yerevan. The working group is coordinated by the chairman of the
"Political Economy" research center Andranik Tevanyan.

As he said in an interview with a PanARMENIAN.Net reporter, the
Armenian economy suffers several diseases: monopolies, non-market
relations of various commodity and service markets, leading to the
merge of business and politics.

"Of course, we do not think results will be very tangible for our
society, but it is a step forward, and making such steps we can
ultimately achieve some success on the way to normal market relations,"
he added.

According Andranik Tevanyan, this is largely dependent on the political
forces of Armenia, society, and on the relationships inside the system.

He stressed the importance of establishing the antimonopoly authority,
which, together with the State Commission for the Protection of
Economic Competition of Armenia (SCPEC) Armenia will monitor and
regulate relations in the economy. "That is a new structure to prevent
creation of unnatural monopolies and to regulate natural monopolies,
establishing the rate of profit for them," Andranik Tevanyan said.

Cooperation of the two agencies, he believes, will optimize the
anti-monopoly activities in the country.

*

Opening of RA-Turkish border will create potentials for installing
new optical Internet network, UITE Executive Director Karen Vardanyan
told a news conference in Yerevan. "There are no serious problems
from technical viewpoint, and after opening of border the problem
will be resolved within shortest terms," he noted.

Besides, expert believes that optical Internet via Turkey will create
better information security guarantees. Even though no specific
agreement has been reached so far, many big companies such as ArmenTel
and Turkish Telecom are interested in the project, he said.

To become a technological country, Armenia should improve the
efficiency of the fiscal authorities, Karen Vardanyan, UITE executive
director told a press conference today. According to him, UITE launched
the "customs and tax reforms in cooperation with public and private
sectors", which will speed up the production chain and change the
approaches of the fiscal authorities, those reforms will enable to
make IT-products more affordable and suitable for the foreign market.

"Now the fiscal authorities are working against this chain, pursuing
only short-term benefits, like filling the state budget," he said.

The main problem existing in IT industry: double taxation. A number
of products (robotics, automated control systems) should be deprived
from it. The program, according to Karen Vardanyan, will reduce
corruption risks and enable Armenian companies to compete in foreign
markets. The main consumers of Armenian IT-products are the U.S.,
Europe and Russia. "The ration of exports and internal consumption
now reached 60 per cent and 40 per cent, while in 2006 the ratio was
80 per cent and 20 per cent," he said. The vision of UITE for the
nearest future is 50 per cent to 50 per cent, Karen Vardanyan said.

*

RA Government should determine priority spheres for country’s future
development, Karen Vardanyan said. "We should decide what country we
want in 10-15 years’ time, and what spheres should be locomotives for
its development," he said. Government determines situational problems
and elaborates stable strategy for country’s development, expert finds.

Vardanyan positively assessed Armenian Government’s anti-crisis
measures towards maintaining the level of social expenses, however,
"if that is not accompanied by strategic development, we may face
great problems in future."

Besides, Armenian Government has reduced 2010 budgetary expenses for
developing IT sphere.

*

ArmRosGasprom hold negotiations with Gazprom Export to reduce
prices for gas deliveries from Russia to Armenia, spokesperson of
"ArmRosGazprom" Shushan Sardaryan told PanARMENIAN.Net. According
to her, the long-term contract between two partners provides an
incremental tariff policy.

Shushan Sardaryan informed that the contract stated that between April
1, 2009 and March 31, 2010 the price for 1000 cubic meters amounts to
200 USD, and in April, during transition to the next phase of tariff
policy, the prices may decrease. "We are negotiating with Gazprom
Export, a possible price reduction for gas delivered from Russia to
Armenia", – she said.

The pricing policy for Russian gas were discussed during the meeting
of the Presidents of Armenia Serzh Sargsyan and President of Russia
Dmitry Medvedev in Moscow.

*

The Central Bank of Armenia is waiting for the economic situation to
clear up, said Nienke Oomes, IMF Resident Representative in Armenia.

"I positively assess the CB policy. Economy is being stabilized and
maybe the CB will reconsider its position in a month," Ms. Oomes told
a PanARMENIAN.Net reporter.

She also emphasized that Armenia’s economy strongly depends on
Russia’s.

As to the crediting system, Ms. Oomes remarked that commercial banks do
not allow credit as they fear not to get the funds back. "Crediting
by commercial banks will be possible if the country’s economy is
stabilized," she said.

*

Russian and Armenian presidents Medvedev and Sargsyan met Friday
during a summit of the post-Soviet Commonwealth of Independent States
in the capital of Moldova, with Azerbaijani President Ilham Aliyev
also taking part in the meeting chiefly dedicated to discussions of
the Nagorno Karabakh issue.