IMF’S TALES AND ARMENIAN BUSINESS IN RUSSIA

news.am
Feb 18 2010
Armenia

Mark Lewis, Chief of the International Monetary Fund (IMF) mission in
Armenia, who recently visited the country, forecast economic growth of
about 2% for this year. Hopes are mostly placed on the Armenian mining
industry, agricultural and services sectors. The situation is clear in
the country’s mining industry. A few years ago the Zangezur Copper and
Molybdenum Combine topped the list of Armenia’s largest taxpayers; in
2006, the enterprise ensured 1/10 of all the tax revenues. However,
with the global crisis, all the hopes for the largest companies
collapsed like a house of cards.

James McHugh, the then IMF Resident Representative in Armenia, did
not say a single word about the large-scale housing construction,
monopolized economy and low-level economic diversification. Nor did he
say anything about the disastrous consequences of AMD revaluation. On
the other hand, IMF representatives would sing praises to Armenia’s
economic policy. Now we have "found out" that the Armenian economy
was not at all "all right."

At present, however, we are not "reassured" with 2% economic growth.

Nothing is easier than making economic forecasts. Any figures can be
cited. Who is going to remember the "old forecasts"?

In the middle of 2009, Nienke Oomes, the then IMF Resident
Representative in Armenia, stated that the IMF did not forecast a
two-digit decrease in Armenia’s GDP, but a decrease of 9.5%.

Unfortunately, despite the IMF experts’ forecasts, Armenia did register
a two-digit decrease in its GDP.

We can only guess at what is going to happen in the future. The
situation is unpredictable, which may be the reason why, more
and more often, Armenian businessmen set their eyes on the other
CIS member-countries and foreign states. For example, some Armenian
businessmen recently announced their intention to construct two jewelry
and diamond-cutting factories in Ulyanovsk, Russia. On the other hand,
the once prosperous Armenian diamond-cutting industry has actually
closed down and desperately needs bulk orders.

Specialists express varied opinions of the IMF’s role in national
economies. Many independent experts analyzing the efficiency of loans
issued by the IMF and World Bank arrive at deplorable conclusions. The
programs funded by the banks normally fail to produce results in the
developing countries. The explanation is a simple one: widespread
corruption, low professional level of program builders and executing
officers, etc…