Monday,
Few Small Businesses Qualify For Cheap Credit
• Naira Nalbandian
Armenia -- An empty street cafe in Yerevan, March 14, 2020.
Less than 500 small and medium-sized businesses have qualified so far for
low-interest loans which the Armenian government hopes will help them remain
afloat during a recession caused by the coronavirus pandemic.
The commercial bank loans subsidized by the government are repayable in three
years, with a grace period set for the first two years. They are meant for those
Armenian firms whose annual revenues ranged from 24 million drams to 500 million
drams ($50,000-$1 million) last year. The scheme is part of a broader
coronavirus-related stimulus package approved by Prime Minister Nikol
Pashinian’s cabinet late last month.
Government officials said on Monday that only 1,200 of some 70,000 small and
medium-sized enterprises (SMEs) registered in Armenia have applied for such
cheap credit. They said the government has approved only 461 of those loans
applications worth a combined 5.2 billion drams ($10.8 million).
Ruben Osipian, the head of a small business association, estimated that the real
number of SMEs active in the country stands at around 5,000. Many of them
register their workers as individual entrepreneurs to pay fewer taxes, he said,
adding that this explains why the number of registered firms is much higher.
Osipian said that the number of loan applicants is very low even considering the
actual number of SMEs. He claimed that many of them are unable to meet the
lending criteria set by the government.
The requirements include only include not only the minimum annual turnover of 24
million drams but also the absence of any delays in payment of taxes or loan
repayments carried out last year.
Osipian complained that his own firm both had a smaller turnover and was fined
by tax authorities for not submitting a financial report on time. For the same
reason, he said, it is also not eligible for government grants to be provided to
those small businesses that have not laid off any workers in recent weeks.
Pashinian announced on Friday that almost 11,300 entities have already received
such grants totaling 1.8 billion drams. He said that the government has also
approved 6 billion drams in cash payments to more than 86,500 employees of
various private firms forced to halt their operations since March 13.
Pashinian put the amount of overall coronavirus relief allocated by the
government to date at 43.4 billion drams ($90 million).
Armenian Health Minister Issues Coronavirus Warning
• Harry Tamrazian
• Naira Bulghadarian
Armenia -- Health Minister Arsen Torosian speaks at a meeting of a task force
coordinating the Armenian government's response to coronavirus outbreak,
Yerevan, .
As the spread of coronavirus in Armenia continued unabated on Sunday Health
Minister Arsen Torosian warned that the authorities may soon be unable to
hospitalize or isolate most infected people.
The Armenian government imposed serious restrictions on people’s movements and
ordered the closure of most businesses in late March amid a rapid increase in
coronavirus cases in the country. The daily rises in the number of such cases
fell significantly afterwards, leading the government to reopen some sectors of
the domestic economy already on April 13.
The government allowed late last week the resumption of more types of business
activity and eased its restrictions on transport links between Yerevan and the
rest of the country.
Meanwhile, the Ministry of Health reported a larger number of new coronavirus
cases in the course of the week. It said on Monday morning that 62 more people
tested positive for the virus in the past 24 hours.
The total number of cases thus reached 1,808, up from 1,339 cases recorded one
week ago. The nationwide death toll from the virus rose from 22 to 29 in the
same period.
In an interview with RFE/RL’s Armenian service, Torosian complained that because
of the “multitude” of infection sources the health authorities increasingly have
trouble tracing people who have come into contact with COVID-19 patients.
Torosian said that hospitals and healthcare workers treating patients are
another cause of the continuing infections. “We are now concentrating on
stopping the spread of the disease inside medical centers and protecting doctors
as well as those patients that are not infected with coronavirus,” he said.
The minister also blamed the rising COVID-19 numbers on people’s increased
movements inside the country. “We can see that their growing mobility is leading
to new cases and are now preparing for a situation where we may not hospitalize
all [infected people] or keep them in hotels,” he warned.
Armenia -- Workers disinfect an ambulance outside Surp Girgor Lusavorich
hospital in Yerevan, April 8, 2020.
All people testing positive for the virus in Armenian have been taken to
hospitals or hotels requisitioned by the authorities and turned into temporary
medical centers. According to the Ministry of Health, 931 people were treated or
monitored by medical personnel there as of Monday morning. Almost 850 other
Armenians have recovered from COVID-19 to date.
The ministry said earlier that that it has set up 1,500 hospital beds for
COVID-19 patients across the country.
“I certainly don’t want that day to come, but one day we will not be able to go
after every case and it will not make sense to seal off any town or village
anymore,” Torosian told RFE/RL’s Armenian service.
From that moment onwards, he said, the health authorities will stop
hospitalizing infected individuals showing mild symptoms of the disease or none
at all and will only treat patients who are in a serious condition. “We don’t
know when that day will come,” he said.
Since the beginning of March, the authorities have also quarantined thousands of
people who have been in contact with COVID-19 patients or returned to Armenia
from other countries. They all have undergone coronavirus tests at the end of a
two-week confinement.
In Torosian’s words, some 2,200 people remain in quarantine and about 3,000
others are self-isolated in their homes at present.
Tsarukian’s Right-Hand Man Arrested
• Naira Bulghadarian
Armenia -- Sedrak Arustamian, chief executive of Multi Group holding company,
September 18, 2007.
The top manager of companies belonging to Prosperous Armenia Party (BHK) leader
Gagik Tsarukian was remanded in custody on Saturday after law-enforcement
authorities brought fresh criminal charges against him.
A court in Yerevan allowed them to hold Sedrak Arustamian, the chief executive
of Tsarukian’s Multi Group holding company, in detention for at least two months
one day after his arrest.
Arustamian was charged with bribery and money laundering. Investigators gave no
details of the accusations denied by him.
Arustamian’s lawyer, Hovik Sukiasian, said the accusations stem from about $20
million which his client had lent to two other persons a decade ago.
“They [investigators] are telling him, ‘Since you did not earn interest [on the
loans] it means that you paid bribes,” Sukiasian told RFE/RL’s Armenian service.
He insisted that Arustamian had lent the hefty sums for purely commercial
purposes and simply agreed afterwards to delay their repayment.
The lawyer did not deny or confirm media reports that the charges are connected
with a criminal case against Gagik Khachatrian, a former finance minister who
was arrested on corruption charges last August.
Arustamian was already indicted earlier in two separate criminal inquiries
conducted by the Investigative Committee.
The law-enforcement agency claimed last September that Tsarukian’s right-hand
man helped a Chinese construction company building a 56-kilometer highway in
northwestern Armenia evade 240 million drams ($503,000) in taxes. It said the
company also paid an Armenian firm owned by Arustamian 117 million drams in
fictitious consulting frees as part of the scam.
The Investigative Committee announced on April 8 that Arustamian is also
prosecuted for his refusal to stop the “illegal” construction by Multi Group of
a luxury hotel in downtown Yerevan launched in early 2018.
Arustamian rejects all accusations leveled against him.
Tsarukian is one of Armenia’s richest men. His BHK opposition party controls the
second largest number of seats in the Armenian parliament.
BHK representatives have so far reacted cautiously to the criminal cases against
Tsarukian’s close associate. The tycoon himself has not commented on them.
IMF Plans $280 Million In Emergency Funding For Armenia
• Sargis Harutyunyan
U.S. -- A man walks past the International Monetary Fund logo at its
headquarters in Washington, May 10, 2018.
The International Monetary Fund will likely disburse next month $280 million in
emergency loans designed to help Armenia fight the coronavirus outbreak and
mitigate its economic consequences, a senior IMF official said over the weekend.
Yulia Ustyugova, the fund’s resident representative in Yerevan, told RFE/RL’s
Armenian service that the IMF is also planning $140 million in additional
funding to Armenia.
The Armenian government announced last week plans to borrow around $540 million
for cushioning the impact of an unfolding economic recession in the country.
Finance Minister Atom Janjughazian said the government needs to offset a major
shortfall in its tax revenues and to continue financing coronavirus relief
measures.
Ustyugova said that IMF officials have recommended the $280 million disbursement
to the fund’s executive board, which should approve it in the second half of
May. She said the sum includes a $248 million “stand-by arrangement” which was
allocated to Armenia in May 2019 and has not been used by the latter until now.
“Also, the [Armenian] authorities have requested additional financial help from
the IMF to help pay for the economic support program and necessary healthcare
expenditures in the current environment,” said Ustyugova.
“So $280 million will be available in the second half of May. The program itself
will last until May 2022, and about $140 million will additionally be available
after May 2020,” added the IMF official.
Armenia -- IMF Resident Representative for Armenia Yulia Ustyugova is inteviewed
by RFE/RL, Yerevan, November 18, 2019.
She insisted that the emergency borrowing is justified even though it will lead
to a sizable increase in Armenia’s foreign debt. “The measures that need to be
taken right now will help to avoid more painful and prolonged socioeconomic
damage in the future,” she said.
The Armenian government has promised a wide range of coronavirus-related
compensatory measures, including cash payments to a large part of the
population, financial assistance to businesses and loan subsidies for farmers.
According to Janjughazian, it plans to spend $150 billion drams ($315 million)
for this purpose this year.
Ustyugova praised the government’s “swift” response to the economic fallout from
the global health crisis. “We welcome the package of economic policy measures
that was announced by the authorities,” she said.
In its World Economic Outlook released earlier this month, the IMF forecast that
the Armenian economy will shrink by 1.5 percent this year due to the coronavirus
pandemic. The Armenian Ministry of Finance expects a 2 percent drop in GDP.
Ustyugova stood by the IMF projections. “We currently see the pandemic having a
very sharp but also very short-lived impact on Armenia,” she said. “So we expect
the peak of the shock to happen around the second quarter, with some slight
recovery starting already in the third quarter [of this year,] and an
acceleration of economic activity in the fourth quarter to 2021.”
The IMF cautioned at the same time that a prolonged COVID-19 pandemic would lead
to a sharper GDP contraction. “There are lots of risks to these projections and
the risks, I would say, are tilted to the downside,” she said.
Reprinted on ANN/Armenian News with permission from RFE/RL
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