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Prime Minister's Sensational Statement
Prime Minister Tigran Sargsyan made a sensational statement. He said
Armenia will start issuing government bonds. He added that it will
allow Armenia to pay its debt to Russia.
This statement indicates a fundamental change of the country's economic bias.
Issuing bonds might have advantages because it will make Armenia part
of the world market, reducing the influence of local oligarchs and
monopolists on the country.
Currently, the exchange rate, precious metals and food are set by
local tycoons. Entering the open market will make it difficult to hold
down the exchange rate of the dram, which means that export will be
more profitable than import.
However, it may also play a negative role. First, purchase of
government bonds of Armenia will mean that Armenia may appear in a
deeper debt pit. Our foreign debt is already approaching half of the
GDP, meanwhile it may become known that our foreign debt has been
obtained by Turkey.
There is another circumstance. Armenia is likely to repay its debt to
Russia, which means that Yerevan wants to settle its accounts with
Moscow to move towards Europe with a light heart. Evidence to this is
the agreement of Armenia to the rise of gas price. It means that
Yerevan did not come to compromise with Russia, while the West will
help Armenia to handle the rising price of gas, possibly by means of
issuing state bonds.
However, sudden entry of Armenia to the international market may
produce the effect of turbulence, the country may lose control, and
the liberalized economy will appear in the hands of others. Mining
will be shared between the British and Germans, air transportation
between Americans and Arabs, banks between the British and French.
The economic isolation of Armenia is against the country indeed. It
produces the effect of a castle in siege. Sooner or later Armenia will
have to open up but Prime Minister Tigran Sargsyan must provide
safeguards against loss of the national branches of economy.
For example, it is said that the bankruptcy of Armavia may result in
disappearance of national aviation. Liberalization of mines may result
in the loss of control over our subsoil.
Armenia could discuss and adopt a law similar to laws in Arab and many
other countries. The law would provide that only joint companies with
citizens of the country could be set up.
Besides, the government must make a list of branches of economy,
enterprises and resources which are national wealth. It is necessary
to set quotas for the use of branches of economy. Otherwise, the
sensation of the prime minister will mark the beginning of the
disaster of the independence of Armenia.
Naira Hayrumyan
20:51 16/05/2013
Story from Lragir.am News:
http://www.lragir.am/index/eng/0/comments/view/29901
Prime Minister Tigran Sargsyan made a sensational statement. He said
Armenia will start issuing government bonds. He added that it will
allow Armenia to pay its debt to Russia.
This statement indicates a fundamental change of the country's economic bias.
Issuing bonds might have advantages because it will make Armenia part
of the world market, reducing the influence of local oligarchs and
monopolists on the country.
Currently, the exchange rate, precious metals and food are set by
local tycoons. Entering the open market will make it difficult to hold
down the exchange rate of the dram, which means that export will be
more profitable than import.
However, it may also play a negative role. First, purchase of
government bonds of Armenia will mean that Armenia may appear in a
deeper debt pit. Our foreign debt is already approaching half of the
GDP, meanwhile it may become known that our foreign debt has been
obtained by Turkey.
There is another circumstance. Armenia is likely to repay its debt to
Russia, which means that Yerevan wants to settle its accounts with
Moscow to move towards Europe with a light heart. Evidence to this is
the agreement of Armenia to the rise of gas price. It means that
Yerevan did not come to compromise with Russia, while the West will
help Armenia to handle the rising price of gas, possibly by means of
issuing state bonds.
However, sudden entry of Armenia to the international market may
produce the effect of turbulence, the country may lose control, and
the liberalized economy will appear in the hands of others. Mining
will be shared between the British and Germans, air transportation
between Americans and Arabs, banks between the British and French.
The economic isolation of Armenia is against the country indeed. It
produces the effect of a castle in siege. Sooner or later Armenia will
have to open up but Prime Minister Tigran Sargsyan must provide
safeguards against loss of the national branches of economy.
For example, it is said that the bankruptcy of Armavia may result in
disappearance of national aviation. Liberalization of mines may result
in the loss of control over our subsoil.
Armenia could discuss and adopt a law similar to laws in Arab and many
other countries. The law would provide that only joint companies with
citizens of the country could be set up.
Besides, the government must make a list of branches of economy,
enterprises and resources which are national wealth. It is necessary
to set quotas for the use of branches of economy. Otherwise, the
sensation of the prime minister will mark the beginning of the
disaster of the independence of Armenia.
Naira Hayrumyan
20:51 16/05/2013
Story from Lragir.am News:
http://www.lragir.am/index/eng/0/comments/view/29901