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Tigran Sargsyan: Global Crisis Exposed Armenia's Weak Points

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  • Tigran Sargsyan: Global Crisis Exposed Armenia's Weak Points

    TIGRAN SARGSYAN: GLOBAL CRISIS EXPOSED ARMENIA'S WEAK POINTS

    news.am
    Oct 30 2009
    Armenia

    The global economic crisis has, in a sense, played a positive role in
    exposing the weak points of the Armenian economy, RA Prime Minister
    Tigran Sargsyan stated in Parliament, presenting the 2010 draft budget.

    "First, the crisis revealed a low level of economic diversification
    in Armenia, deficit of long-term funds and of relevant institutions.

    Secondly, oligarchic monopolies and a low competition level in the
    Armenian economy, which reduces the price flexibility level. Thirdly,
    poor motivating factors in government agencies. Fourthly, pressing
    grave problems in the education and health systems. The Government's
    2010 strategy is aimed at resolving these problems," the Premier said.

    Presenting the key performance indicators set by the 2010 draft budget,
    the Premier tried to answer the question as to why the Government
    fails to make realistic economic forecasts for 2009-2010.

    "The answer is a simple one: the global economic crisis breaks all the
    laws and does not allow accurate forecasts to be made." He reported
    that next year Armenia is to receive funds from the Millennium
    Challenge Corporation, which will allow the country to keep to the
    2010 expenditure budget. According to him, the expected economic
    growth is 1.2%. "We also plan to maintain social expenditures at the
    2009 level, and I am sure we will accomplish the task," he said. The
    Premier pointed out that the GDP may be a little lower next year as
    compared with this year.

    The Premier also addressed the issue Armenia's national debt. The
    public is concerned over whether the country will be able to pay off
    the debt after receiving loans. "I would like to note that Armenia's
    budget deficit is mainly financed by international donor organizations,
    which prevents market risks. Moreover, the credits issued to Armenia
    by the World Bank, Asian Bank and International Monetary Fund (IMF)
    will be restructured, which will relieve the debt burden on the
    budget. Armenia is not running great risk - if the world economic
    recovery is delayed, Armenia will postpone the payment of its debts
    as well."

    The 2010 budgeted expenditures are 533bn AMD instead of the previously
    forecast 500bn. The target will be exceeded provided a favorable
    economic situation develops. Otherwise, the expenditure budget will be
    executed due to the reserve funds. Next year, the financing of local
    government will total 32.5bn AMD - an increase of 17% as compared with
    this year. A total of 31bn AMD are intended for the Nagorno-Karabakh
    Republic (NKR). According to the Premier, the funds will help the
    NKR ensure its security. Next year the RA Government will continue
    assisting small & medium-size (SME) and backbone enterprises, create
    favorable conditions for export and continue customs and tax reforms.

    "The Government has focused its attention on reforms in the
    pension and insurance systems, which will enhance Armenia's economic
    diversification," the Premier said. The Government also plans reforms
    in the state government, health and education systems.

    From: Emil Lazarian | Ararat NewsPress
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