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MP SAYS RUSSIAN LOAN ENRICHED SOME PEOPLE
The spending of the sum raised from the first tap of Armenian bonds
deserves a serious consideration at the National Assembly, says Member
of Parliament Artsvik Minasyan of the ARF, economist. He is going to
raise this issue with the parliament soon.
In an interview with Lragir.am Artsvik Minasyan said soon they may
come up with a motion for consultations between the government and
the National Assembly on foreign debt-related issues.
On Thursday the meeting of government decided to spend 500 million
out of 700 million dollars raised from the first tap of Armenian
sovereign bonds on repayment of the Russian loan.
"It is already a habit of the government to act independently from
the National Assembly and conduct a policy that may jeopardize
our country and our parliament later. Such an immense sum should
undergo parliament's consideration, money raised from sovereign bonds
tapping must undergo a thorough consideration. The government acted
independently, first it boosted the foreign debt without consulting
the parliament, now it is spending it without asking our opinion,"
Artsvik Minasyan.
The government explains early repayment of 500 million dollars borrowed
from Russia in 2009 by its terms and conditions. The minister of
finance Davit Sargsyan said interest on the Russian loan is Libor+3,
a floating rate, whereas the government prefers sovereign bonds with
fixed interest.
The economist Artsvik Minasyan was surprised to hear such an
explanation because he notes that historically Libor has never been
above 1%, which means that interest on the Russian loan could not be
above 4%.
"Maximum 5%. Compare it with interest on sovereign bonds which is above
7%. Besides, the Russian loan was for 15 years, the sovereign bonds are
7 years. Third, when we borrowed the Russian loans, we disclaimed the
liabilities of the Russian Eximbank to Armenian private and state-run
companies. Then the government said that we disclaimed that money
because the Russian loan was borrowed on favorable conditions. So
what has happened over the past 4 years that the favorable terms and
conditions of the loan deteriorated?" he noted.
In fact, Artsvik Minasyan says, the reason for early repayment is
cleaning traces because it was not spent effectively, and some people
came into a fortune. According to him, the government is trying to
help some people avoid responsibility.
"In order to shed responsibility they refreshed the foreign debt
portfolio to clear the traces. Even the Control Chamber report stated
that the Russian loan was not spent effectively. Now the government
says dear people, dear members of parliament, forget about that loan,
it does not exist any more, now we are handling the sovereign bonds.
However, they are ingenuous if they think that they can thus clear
the traces," he noted.
The member of parliament says there is no logic in the government's
step to borrow money with higher interest rate to repay a loan with
a lower interest rate. This step is also obscure in the context of
Armenia's statement to become a member of the Customs Union.
"So what are we doing now? On the one hand, we are boosting our
dependence on the countries other than Russia because bonds were
bought by American and British investors, on the other hand, we are
headed for the Customs Union. I see no logic," he noted.
He also asks the government why it repays a loan which it claims to
be effectively directed to the economy instead of investing the money
raised from bonds in the economy.
Roza Hovhannisyan 10:59 05/10/2013 Story from Lragir.am News:
http://www.lragir.am/index/eng/0/country/view/31029
The spending of the sum raised from the first tap of Armenian bonds
deserves a serious consideration at the National Assembly, says Member
of Parliament Artsvik Minasyan of the ARF, economist. He is going to
raise this issue with the parliament soon.
In an interview with Lragir.am Artsvik Minasyan said soon they may
come up with a motion for consultations between the government and
the National Assembly on foreign debt-related issues.
On Thursday the meeting of government decided to spend 500 million
out of 700 million dollars raised from the first tap of Armenian
sovereign bonds on repayment of the Russian loan.
"It is already a habit of the government to act independently from
the National Assembly and conduct a policy that may jeopardize
our country and our parliament later. Such an immense sum should
undergo parliament's consideration, money raised from sovereign bonds
tapping must undergo a thorough consideration. The government acted
independently, first it boosted the foreign debt without consulting
the parliament, now it is spending it without asking our opinion,"
Artsvik Minasyan.
The government explains early repayment of 500 million dollars borrowed
from Russia in 2009 by its terms and conditions. The minister of
finance Davit Sargsyan said interest on the Russian loan is Libor+3,
a floating rate, whereas the government prefers sovereign bonds with
fixed interest.
The economist Artsvik Minasyan was surprised to hear such an
explanation because he notes that historically Libor has never been
above 1%, which means that interest on the Russian loan could not be
above 4%.
"Maximum 5%. Compare it with interest on sovereign bonds which is above
7%. Besides, the Russian loan was for 15 years, the sovereign bonds are
7 years. Third, when we borrowed the Russian loans, we disclaimed the
liabilities of the Russian Eximbank to Armenian private and state-run
companies. Then the government said that we disclaimed that money
because the Russian loan was borrowed on favorable conditions. So
what has happened over the past 4 years that the favorable terms and
conditions of the loan deteriorated?" he noted.
In fact, Artsvik Minasyan says, the reason for early repayment is
cleaning traces because it was not spent effectively, and some people
came into a fortune. According to him, the government is trying to
help some people avoid responsibility.
"In order to shed responsibility they refreshed the foreign debt
portfolio to clear the traces. Even the Control Chamber report stated
that the Russian loan was not spent effectively. Now the government
says dear people, dear members of parliament, forget about that loan,
it does not exist any more, now we are handling the sovereign bonds.
However, they are ingenuous if they think that they can thus clear
the traces," he noted.
The member of parliament says there is no logic in the government's
step to borrow money with higher interest rate to repay a loan with
a lower interest rate. This step is also obscure in the context of
Armenia's statement to become a member of the Customs Union.
"So what are we doing now? On the one hand, we are boosting our
dependence on the countries other than Russia because bonds were
bought by American and British investors, on the other hand, we are
headed for the Customs Union. I see no logic," he noted.
He also asks the government why it repays a loan which it claims to
be effectively directed to the economy instead of investing the money
raised from bonds in the economy.
Roza Hovhannisyan 10:59 05/10/2013 Story from Lragir.am News:
http://www.lragir.am/index/eng/0/country/view/31029