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World Banks Urges Government Of Armenia To Refuse From Protectionism

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  • World Banks Urges Government Of Armenia To Refuse From Protectionism

    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.
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