WORLD BANKS URGES GOVERNMENT OF ARMENIA TO REFUSE FROM PROTECTIONISM
ArmInfo
2009-02-25 14:58:00
ArmInfo. World Bank urges the Government of Armenia to refuse from
protectionist policy, Director of WB Yerevan Office Aristomene
Varoudakis said at a press conference in Yerevan Wednesday.
He said the government has recently come out with an initiative of
raising customs duties for finished imported products to support
local producers. He said the competition between imported and local
production in the domestic market of Armenia is not significant. At
the same time the rise of customs tariffs for import will lead to
rise of prices that will first of all affect the unsecured sections
of the population, he said.
Afterwards, the government will have to think of how to help the poor
and make compensations, WB Director said.
Alongside with raising customs tariffs, he said, the government has set
up an Operative Staff reporting to the Prime Minister of Armenia which
studies government credit projects, government guarantees and subsidies
to the private sector. World Bank is rather skeptical about direct
assistance to business. This will not settle the fundamental problems
of the local business, A. Varoudakis said. He believes that enterprises
face problems for lack of demand for their production and government
tries to artificially stiffen business competition. WB Director is sure
that the pressure on the state budget will considerably increase if the
government helps all the enterprises experiencing difficulties, since
they will rise in number due to the crisis. He said the protectionist
policies are waged in many states and even in the states with high
level of incomes. WB leadership believes that protectionist measures
protract the restoration of global economy, he said.
To recall, the Government of Armenia has already provided government
credits and guarantees to a number of local enterprises. The largest
government credit of $10 million was provided to Zangezour copper
and molybdenum plant.