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  • Dollar Grows Against Importers

    DOLLAR GROWS AGAINST IMPORTERS
    Naira Hayrumyan

    Story from Lragir.am News:
    http://www.lragir.am/engsrc/economy26544.html
    Published: 16:35:22 - 13/06/2012


    Apparently, the dollar rate in Armenia is growing with the blessing
    of the power. As the famous businessman Hrayr Hovnanian said if the
    government didn't interfere, the prices would have soared after the
    dollar rate had reached AMD 415 from 370 per dollar.

    Does Armenia benefit from the growth of the dollar ? According to
    economists, dollar is not growing. It is the real rate which is about
    450 drams for one dollar.

    What causes dollar abnormality in Armenia? It is noy clear.

    Importer-monopolists buy cheap dollars in Armenia and use them abroad
    and gain huge profit on the difference of the exchange rate. Since
    the greater share of the Armenian mutated economy is import.

    Why has the government decided to cut the profits of importers? Under
    the influence of international organizations which point out to
    this circumstance? Most probably, the government has realized that
    no one will invest in export-oriented production and in the domestic
    economy unless it is possible to obtain surplus profits. Apparently,
    they thus decided to let the dollar rate grow.

    As to the importers, most probably they have somehow come to terms.

    Perhaps, they were "pledged" a law on super profit or enforcement of
    the applicable laws to deal with growth of prices.

    Import is the bugbear of the Armenian economy. News.am calculated that
    the importers of Brazilian pork which costs 3500 drams in Armenia
    receive AMD 2000 net profit from each kilogram. In other countries,
    it is clear robbery, while here such importers boost prices when the
    dollar rate grows.

    Why would anyone invest in local pig farms when it is possible to
    make a fortune by importing pork? Meanwhile, net profit from locally
    produced pork would be AMD 1000.

    But the growth of the dollar and backstage pressure on importers do
    not solve economic problems. All this must be accompanied by public
    actions such as legislation boosting exports, publication of the true
    amounts of profits of importers and taxes they pay. But the main thing
    is the adoption of a law on excess profit to introduce progressive
    tax. It would be nice to use price limits in such priority areas
    as agriculture.

    Because the importers can pay taxes, as Samvel Alexanyan does, the
    fifth or sixth in the list of taxpayers. But by doing so he does not
    cease to rob us, obtaining fabulous profits at our expense.



    From: Emil Lazarian | Ararat NewsPress
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