ARISTOMENE VAROUDAKIS: ARMENIA NEEDS DIVERSIFIED ECONOMY

news.am
Nov 27 2009
Armenia

Aristomene Varoudakis, Head of the WB office in Yerevan believes
Armenia needs economic diversification. When the construction sector
ensures 30% of profit, and the mining industry ensures 40% of exports,
it means that economy is in danger. If Armenia is to return to the
two-digit growth, it has to diversify its economy.

It is not a mechanical process. Rather it needs improved
business environment and huge investments in the transport and IT
infrastructures, as well as highly skilled personnel, Varoudakis said
in an interview with Radio Liberty.

As to the gravity of the situation in Armenia in the context of
Armenia’s foreign debt, which is expected to reach U.S. $3bn by the end
of this year and U.S. $3.5bn by the end of 2010 (50% of Armenia’s GDP),
Varoudakis said that there is not a universal figure, 50% or 60%. Any
country has a number of factors allowing it to have a certain foreign
debt. The first factor is economic growth rates, which enable countries
to cover their debts due to tax revenues. Secondly it is diversified
and competitive economy, and, of course, efficient tax administration.