RESULTS OF 2009 ANTI-CRISIS ACTIVITIES OF GOVERNMENT PRESENTED AT SITTING OF BOARD OF TRUSTEES OF NATIONAL COMPETITIVENESS FOUNDATION

Noyan Tapan
Feb 15, 2010

YEREVAN, FEBRUARY 15, NOYAN TAPAN. At the February 14 sitting of the
Board of Trustees of the RA National Competitiveness Foundation,
the Armenian Prime Minister, Chairman of Board Tigran Sargsyan
presented the results of the 2009 anti-crisis activities of the
Armenian government.

In particular he said: "Economic recovery tendencies were observed in
the last months of 2009. After a 18.4% economic decline, we started
recovering slowly, month by month and finished last year with a 14.4%
decline and a GDP of 3 trillion 165 billion drams. The industry
declined by 7.8%, interestingly, the fall in mining industry made
7.6%. In the 14.4% economic decline, 11.2% was due to the halt of
work in construction sector. Construction accounts for about 30%
of GDP, so 25% reduction in construction had a negative impact on
all the macroeconomic indices. At the same time there was a growth
in metallurgy, particularly we finished the year with a 20% growth
in aluminium production."

T. Sargsyan attached importance to 17% growth in the IT industry, which
was conditioned by both the entrance of the third operator and a 12%
increase in the number of enterprises. He said: "The peculiarity of
2009 was that in parallel with 14.4% decline last year, we had a 1%
growth in retail trade and a 1.3% growth in the sector of services.

Several factors affected the retail trade growth. First, the shadow
sector was actually reduced thanks to the use of cash registers and
the fact the citizens started demanding their cash register receipts.

As a result, more turnover was recorded. The second explanation is that
state expenditures grew in 2009, in particular pensions and social
benefits rose by 16% and 12% respectively; family allowances grew
considerably – from 3,000 to 18,000 drams, while lump sum payments
for families with three and more children grew from 300 thousand to
430 thousand drams, and the number of births in the country in 2009
exceeded the same index in 2008 by over 3,000, which was also due to
reforms in obstetrics. The quality of obstetrical services was improved
greatly with state financing in 2009. A survey conducted by the USAID
showed that corruption in this sector was reduced from 80% to 20%."

Speaking about the programs envisaged by the 2010 state budget, the
prime minister forecast a 1.2% economic growth. Comparing the January
index with the respective index in 2009, he said that tax collection
was by 5 billion drams more, as a result of which the January program
was overfulfilled by 2 billion drams. The same rate of work was
maintained in February. In the prime minister’s words, the effect of
large-scale anti-crisis work will become more noticeable in the second
and third quarters of this year. He added that under the medium-term
program developed jointly with the International Monetary Fund,
the share of the budget deficit in GDP is to decline year by year.

During the sitting, the results of the feasibility study on a program
of the Science and Education Competitiveness Center, the process of
unifying of the Armenian Tourism Development Agency and the National
Competitiveness Foundation, as well as the tourism promotion project
were presented. The sitting participants discussed cooperation between
the National Competitiveness Foundation and the USAID.

The National Competitiveness Foundation’s study on the development
of oncology in Armenia and the government decision to purchase a
cyclotron were also discussed.

The Information and PR Department of the RA Government reports that
later Armenian President Serzh Sargsyan honored the sitting with
his presence.