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ARMENIAN MINISTER EXPECTS CONSTRUCTION REBOUND
Ruben Meloyan
Armenialiberty.org
http://www.azatutyun.a m/content/article/1794752.html
Aug 7 2009
The dramatic decline in construction, a key factor behind Armenia's
ongoing economic recession, will ease in the second half of this
year thanks to wide-ranging measures taken by the government, Urban
Development Minister Vartan Vartanian said on Friday.
The volume of construction work carried out in the country shrunk by
more than half in the first half, significantly contributing to a GDP
fall of 16.3 percent shown in official statistics. The construction
sector's rapid expansion in the past decade was one of the reasons
why the Armenian economy grew at double-digit rates before being hit
hard by the global credit crunch.
Accordingly, the sector has been a focal point of government efforts to
alleviate the consequences of the crisis. Last April, the government
approved 20 billion drams ($55 million) in loan guarantees to private
developers struggling to complete their housing projects. Five
construction firms have reportedly received such guarantees since then.
The government also plans to spend just over one quarter of a $500
million anti-crisis loan provided by Russia on housing construction
in Armenia's northern regions still reeling from the devastating 1988
earthquake. Another $33 million portion of the loan is to be channeled
into a recently established state mortgage fund tasked with providing
relatively cheap housing loans to the population.
Armenia -- Urban Development Minister Vartan Vartanian, undated"There
is quite a bit of [construction] activity in the second half,"
Vartanian told RFE/RL. "The government has taken all necessary measures
and I am sure that quite positive results will be observed in the
second half, both in [private] housing construction and projects
financed from the state budget."
Prime Minister Tigran Sarkisian appeared to share the minister's
optimism as he addressed on Friday dozens of construction specialists
who marked a professional holiday, officially known as Builder's
Day. "I am convinced that as a result of the anti-crisis measures
taken by the government we will emerge from the existing situation
with minimal losses," said Sarkisian.
Speaking an economic forum in Yerevan last month, Sarkisian complained
that the Armenian economy has grown too dependent on construction. He
said its renewed growth needs to also be driven by export-oriented
manufacturing sectors.
The government support for the construction industry was strongly
criticized earlier this week by Hrant Bagratian, a former reformist
prime minister currently affiliated with the main opposition Armenian
National Congress. Bagratian said the government should concentrate
instead on stimulating demand for new housing and commercial space. He
did not comment on the state mortgage lending scheme, which is supposed
to serve that purpose.
"I disagree with [Bagrartian's] view," said Vartanian. "In providing
state support, the government does takes the demand into account."
Ruben Meloyan
Armenialiberty.org
http://www.azatutyun.a m/content/article/1794752.html
Aug 7 2009
The dramatic decline in construction, a key factor behind Armenia's
ongoing economic recession, will ease in the second half of this
year thanks to wide-ranging measures taken by the government, Urban
Development Minister Vartan Vartanian said on Friday.
The volume of construction work carried out in the country shrunk by
more than half in the first half, significantly contributing to a GDP
fall of 16.3 percent shown in official statistics. The construction
sector's rapid expansion in the past decade was one of the reasons
why the Armenian economy grew at double-digit rates before being hit
hard by the global credit crunch.
Accordingly, the sector has been a focal point of government efforts to
alleviate the consequences of the crisis. Last April, the government
approved 20 billion drams ($55 million) in loan guarantees to private
developers struggling to complete their housing projects. Five
construction firms have reportedly received such guarantees since then.
The government also plans to spend just over one quarter of a $500
million anti-crisis loan provided by Russia on housing construction
in Armenia's northern regions still reeling from the devastating 1988
earthquake. Another $33 million portion of the loan is to be channeled
into a recently established state mortgage fund tasked with providing
relatively cheap housing loans to the population.
Armenia -- Urban Development Minister Vartan Vartanian, undated"There
is quite a bit of [construction] activity in the second half,"
Vartanian told RFE/RL. "The government has taken all necessary measures
and I am sure that quite positive results will be observed in the
second half, both in [private] housing construction and projects
financed from the state budget."
Prime Minister Tigran Sarkisian appeared to share the minister's
optimism as he addressed on Friday dozens of construction specialists
who marked a professional holiday, officially known as Builder's
Day. "I am convinced that as a result of the anti-crisis measures
taken by the government we will emerge from the existing situation
with minimal losses," said Sarkisian.
Speaking an economic forum in Yerevan last month, Sarkisian complained
that the Armenian economy has grown too dependent on construction. He
said its renewed growth needs to also be driven by export-oriented
manufacturing sectors.
The government support for the construction industry was strongly
criticized earlier this week by Hrant Bagratian, a former reformist
prime minister currently affiliated with the main opposition Armenian
National Congress. Bagratian said the government should concentrate
instead on stimulating demand for new housing and commercial space. He
did not comment on the state mortgage lending scheme, which is supposed
to serve that purpose.
"I disagree with [Bagrartian's] view," said Vartanian. "In providing
state support, the government does takes the demand into account."