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ARMENIA: ILLUSIVENESS OF FINANCIAL RESOURCES' SOURCES
Vestnik Kavkaza, Russia
June 9 2014
9 June 2014 - 10:34am
Susanna Petrosyan, Yerevan. Exclusively to Vestnik Kavkaza
After the dismissal of the government and the appointment of new
ministers, Armenia has entered a period of concrete actions which
must rely on real financial resources. The government is faced
with a lack of financial resources and a need to find sources of
them. Three financial sources should be considered in this case:
internal resources, foreign loans and investments.
Speaking about the first source, as a result of Tigran Sarkisyan's
policy aimed at protecting the interests of monopolies and oligopolies
and the absence of equal conditions for competition, small and
middle-sized business was almost destroyed. The authorities are trying
to fill the gap that appeared by increasing prices, for example the
upcoming rise in electricity power prices, or by launching hidden
forms of taxes, for instance the defined contribution pension system.
The West has significantly reduced loans in the last 2-3 years. Mostly
small loans ($30-50 million) are being allocated, directed at
realization of local programs on development of the management system,
agriculture, and so on. The reason for such behavior of the West
could be the huge foreign debt of Armenia - more than $4 billion,
as well as breaking promises on fulfillment of certain reforms by
the Armenian authorities.
Russia acts carefully as well. It is unsatisfied with "the effective
use" of the Russian loan of $500 million for overcoming the crisis.
However, the Russian government has recently decided to allocate
$300 million for modernization of the Armenian NPS; but the sum will
be allocated to Russian companies, and the Armenian government will
hardly spend it on settlement of social issues.
As for investments, they have reduced drastically in Armenia in
the last year. This is explained by the absence of real guarantees
providing security of financial investments. Prime Minister Ovik
Abramyan takes active but ineffective steps in this direction.
Recently he said that Armenian embassies should turn into marketing
and investment companies which would provide financial inflows into
the country.
Meanwhile, ambassadors expressed their indignation to Abramyan that
their offers for attracting investments face no serious support from
ministries. Abramyan ordered the relevant ministers to deal with
preparing investment programs directly.
Of course, the idea of involving embassies in attracting investors
is good, but it needs time and certain conditions. The Prime Minister
probably expects to get investments from Armenian businessmen from the
Diaspora. However, the idea seems to be an illusion, as the Diaspora
is unhappy about the Armenian-Turkish protocols.
The government, which aims to attract financial resources for providing
the promised economic growth and management of the country, has faced
real problems. And a settlement of the problems seems to be illusive,
as internal resources have run out; the West and Russia don't want to
give loans, while the experienced Diaspora tries to distance itself
from the problems.
http://vestnikkavkaza.net/articles/politics/56203.html
From: Emil Lazarian | Ararat NewsPress
Vestnik Kavkaza, Russia
June 9 2014
9 June 2014 - 10:34am
Susanna Petrosyan, Yerevan. Exclusively to Vestnik Kavkaza
After the dismissal of the government and the appointment of new
ministers, Armenia has entered a period of concrete actions which
must rely on real financial resources. The government is faced
with a lack of financial resources and a need to find sources of
them. Three financial sources should be considered in this case:
internal resources, foreign loans and investments.
Speaking about the first source, as a result of Tigran Sarkisyan's
policy aimed at protecting the interests of monopolies and oligopolies
and the absence of equal conditions for competition, small and
middle-sized business was almost destroyed. The authorities are trying
to fill the gap that appeared by increasing prices, for example the
upcoming rise in electricity power prices, or by launching hidden
forms of taxes, for instance the defined contribution pension system.
The West has significantly reduced loans in the last 2-3 years. Mostly
small loans ($30-50 million) are being allocated, directed at
realization of local programs on development of the management system,
agriculture, and so on. The reason for such behavior of the West
could be the huge foreign debt of Armenia - more than $4 billion,
as well as breaking promises on fulfillment of certain reforms by
the Armenian authorities.
Russia acts carefully as well. It is unsatisfied with "the effective
use" of the Russian loan of $500 million for overcoming the crisis.
However, the Russian government has recently decided to allocate
$300 million for modernization of the Armenian NPS; but the sum will
be allocated to Russian companies, and the Armenian government will
hardly spend it on settlement of social issues.
As for investments, they have reduced drastically in Armenia in
the last year. This is explained by the absence of real guarantees
providing security of financial investments. Prime Minister Ovik
Abramyan takes active but ineffective steps in this direction.
Recently he said that Armenian embassies should turn into marketing
and investment companies which would provide financial inflows into
the country.
Meanwhile, ambassadors expressed their indignation to Abramyan that
their offers for attracting investments face no serious support from
ministries. Abramyan ordered the relevant ministers to deal with
preparing investment programs directly.
Of course, the idea of involving embassies in attracting investors
is good, but it needs time and certain conditions. The Prime Minister
probably expects to get investments from Armenian businessmen from the
Diaspora. However, the idea seems to be an illusion, as the Diaspora
is unhappy about the Armenian-Turkish protocols.
The government, which aims to attract financial resources for providing
the promised economic growth and management of the country, has faced
real problems. And a settlement of the problems seems to be illusive,
as internal resources have run out; the West and Russia don't want to
give loans, while the experienced Diaspora tries to distance itself
from the problems.
http://vestnikkavkaza.net/articles/politics/56203.html
From: Emil Lazarian | Ararat NewsPress