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Bagratian: Armenian Import sector should be gradually demonopolized

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  • Bagratian: Armenian Import sector should be gradually demonopolized

    Hrant Bagratian: Armenia's import sector should be gradually
    demonopolized in order to overcome crisis

    http://www.nt.am/news.php?shownews=1012945

    YEREVAN, MARCH 13, NOYAN TAPAN. The consequences of the global
    financial and economic crisis will have a much longer impact in Armenia
    than in Western countries as Armenia has been affected not only by the
    financial crisis but also by a structural one, the former prime
    minister of Armenia Hrant Bagratian said at the March 13 press
    conference. According to him, in the past 4 months about 800 million
    USD from Armenia's foreign reserves was spent to maintain artificially
    the exchange rate of the dram. In his opinion, this sum was spent to
    sell dollars cheaply to 3-4 persons-importers. Whereas, as he noted,
    the authorities should have adopted a floating exchange rate policy
    long ago, as a result of which the damage done to exporters would not
    have been so great.

    H. Bagratian said that in 2008, Armenia's GDP fell by 10% in October on
    September and by 31% in November on October. Then GDP grew in December
    on November, and a sharp decline of 62.8% was recorded in January 2009
    on December 2008. After showing a two-digit economic growth for the 8
    consecutive years, the country went into an economic decline. According
    to the former prime minister, the level of unemployment is high in
    Armenia, the mining industry and construction have come to a halt, and
    the gem and jewelry sector has suffered a decline.

    In the words of H. Bagratian, the authorities are currently intervening
    in formation of the exchange rate and, more dangerously, in inflation.
    "They seem to do something to please the people, but it will crash
    later because the economy is a market one," he noted.

    He expressed an opinion that in order to get out of the current
    situation, first of all it is necessary to let the dram's exchange rate
    float, then to review the banking policy. Besides, the import sector
    should be demonopolized gradually. Whereas, in his words, the
    authorities are not conducting a correct policy of struggle against
    consequences of the economic crisis so as "not to hit the pockets of a
    number of oligarchs". In this case, according to him, the whole
    consequence of the economic crisis "will lie on the shoulders of the
    poor".

    H. Bagratian forecast that the depreciation of the dram will continue
    and during a year the exchange rate of the dollar will fluctuate within
    400-850 drams.
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