Tweet
WE NEED DIALOGUE WITH SOCIETY AND BUSINESSES - ROBERT KOCHARYAN
14:56 * 23.01.15
In an interview with the 2rd.am website Armenia's ex-president Robert
Kocharyan spoke of the latest developments in Gyumri, economic and
domestic political situation in Armenia.According to him, Armenia's
authorities should be ready for a candid dialogue with society and
with the business community.
Mr Kocharyan, the first question is about the Gyumri tragedy. As soon
as the murderer was detained, popular unrest spread throughout Gyumri,
which developed into clashes with police amid high emotional tension.
The major reason for the unrest - as well as for persistent popular
discontent - was uncertainty over the following questions: which state
is to try the murderer and where is he to serve his sentence? What
should Armenia's authorities have done in that situation?
The crime committed in Gyumri shocked entire Armenia because of its
extreme cruelty. Public protests could have obviously developed into
large-scale actions with unpredictable consequences. The authorities
should have taken urgent preventive measures. First of all, they should
have clearly assured the public that Armenia's law-enforcement agencies
would investigate the crime and the criminal would be convicted by
an Armenian court (we have a precedent of 1999). I am sure that both
the Armenian and the Russian side needed that because that would
have precluded any attempts to let a particular tragic incident go
all the way to the level of Armenian-Russian relations.
Our officials' confused and contradictory statements only poured oil
on the flames. Regrettably, people vented their anger on Armenian
policemen. In any way, it was a horrifying tragedy and my family and
I are shocked and share common grief.
A slump in the national currency late last year caused a real shock
among the population. Armenia had not seen such a serious depreciation
of the Armenian dram for long. Government officials cited geopolitical
reasons for the situation - rouble downfall, decline in world oil
prices, anti-Russian sanctions. Do external factors alone account for
the 'black December'? Did Armenia's authorities take adequate measures
in that situation? Should further AMD depreciation be expected?
This is the second time for the past five years. Of course, pleading
'external factors' and playing a victim of geopolitical processes
is the easiest way. Russian economy was in a much worse situation in
1998. A 6% economic decline was recorded, and the ruble showed triple
depreciation against the USD. At present, Russia has huge gold and
foreign currency reserves, which rules out a default. With all that,
the Armenian dram showed stability despite Armenia's weak economy
and banking system.
Certainly, external factors play their role, but last December
they exposed our ailing economy rather than caused that unhealthy
situation. However, amid the pessimistic expectations, even minor
speculations may prove decisive despite seeming financial stability.
The Central Bank of Armenia is officially responsible for Armenian
currency and it made certain efforts to stabilize the Armenian dram.
But it was not enough last December. All the branches of power had
to coordinate their actions. But the results showed they were too late.
Economists say that the authorities' reputation and management
efficiency is often more important than fundamental factors during
crises.
As a negative factor, you mentioned also the fall in the prices of
oil. It's just the other way about. Oil-exporting countries take
advantage from falling prices. Cheap petrol and diesel fuel are a
good stimulus for economic development and can make up for the losses
caused by the decreasing transfers from Russia - given cheap energy
carriers' multiplying effect on the economy.
Given the internationally observed trend, the gas supply prices may
be revised too, if of course, the controversial agreement with Gazprom
allows that.
What will be the situation with the [Armenian] Dram? The Dram
exchange rate reflects the general situation of the economy and the
payment balance. Their deterioration will make the Dram cheaper,
while the improvement will foster. The Dram cannot live its own life,
isolated from the general economy. Anyway, sharp fluctuations of the
currency rate are impermissible; they jeopardize the financial sector,
undermining trust in the national currency and hitting our citizens'
pockets.
In one of your interviews last year, you made a prediction that the
country was entering into period of negative expectations. Some of
those expectations have unfortunately come true. Besides, as early
as just a couple of days ago, Moody's downgraded Armenia's sovereign
rating, changing the estimated forecast as "negative". What are your
estimates of Armenia's economic situation for the near future?
I cannot, unfortunately, say anything encouraging. If the economic
policies remain unchanged, then it isn't absolutely clear what should
improve the situation or cause an economic growth, motivating its
increased effectiveness. The downgrading of Armneia's sovereign rating
by Moody's will make the foreign borrowings far more expensive for
us, especially light of an increased foreign debt. In the mid-term
perspective, the EEU economy will be in a state of recession; hence
it is very difficult to assume any essential role there. The strictly
devalued Ruble will seriously change the structure of the trade with
Russia, without offering any advantage to our economy. There is a low
likelihood of serious investments from Russia; due to the sanctions,
they themselves have a problem with the refinancing of Western loans.
We are not particularly attractive to western companies because of
our membership in the EEU. It isn't clear what our trade volumes
with Iran will be. The international prices for colored metals
are not going to rise, as the forecasts suggest; it's going to be
just vice versa. The introduction of stricter norms by Armenian
banks raise the borrowed money's price, making business crediting
expensive. As for the development sector, [its prosperity] is not
even to be dreamed of given such a micro-economy, population flow
and decadent moods. With the economy's monopolization increasing,
the investment volumes decrease steadily, degrading the investment
activity. The internal political situation is not likely to improve,
as the political monopoly continues. So without drastic changes, it
will be extremely difficult to resolve those numerous problems. We
never hear any keynote speech from officials apart from speeches that
everything is fine or will be fine. It is obvious that the evaluation
of the country's situation drastically varies from the authorities to
the society, with either one or the other not being able to develop
the necessary understanding of the reality. Perhaps the authorities
really think that everything is all right or have been persuaded that
nothing has changed. Neither scenario leaves room for optimism.
This automatically gives rise to the question as to what the
authorities should do to extricate themselves from this difficult
situation.
They have to first of all admit the existing fundamental problems
and dispose themselves for an open dialogue with the society and
the business community over ways towards overcoming the situation
in the country, and the crisis. The groundwork of the success behind
the authorities' work is trust, which is missing today. The country
needs drastic changes, but I do not absolutely mean constitutional
reform. I wouldn't like to one by one enumerate all the obvious
and necessary steps. In Armenia, particularly its government, there
aren't few people who realize what needs to be done first. The biggest
impediment towards success would a conflict between the political
elite's economic interests with the long-term interests of the country.
http://www.tert.am/en/news/2015/01/23/Robert-qocharyan/1567795
From: Emil Lazarian | Ararat NewsPress
14:56 * 23.01.15
In an interview with the 2rd.am website Armenia's ex-president Robert
Kocharyan spoke of the latest developments in Gyumri, economic and
domestic political situation in Armenia.According to him, Armenia's
authorities should be ready for a candid dialogue with society and
with the business community.
Mr Kocharyan, the first question is about the Gyumri tragedy. As soon
as the murderer was detained, popular unrest spread throughout Gyumri,
which developed into clashes with police amid high emotional tension.
The major reason for the unrest - as well as for persistent popular
discontent - was uncertainty over the following questions: which state
is to try the murderer and where is he to serve his sentence? What
should Armenia's authorities have done in that situation?
The crime committed in Gyumri shocked entire Armenia because of its
extreme cruelty. Public protests could have obviously developed into
large-scale actions with unpredictable consequences. The authorities
should have taken urgent preventive measures. First of all, they should
have clearly assured the public that Armenia's law-enforcement agencies
would investigate the crime and the criminal would be convicted by
an Armenian court (we have a precedent of 1999). I am sure that both
the Armenian and the Russian side needed that because that would
have precluded any attempts to let a particular tragic incident go
all the way to the level of Armenian-Russian relations.
Our officials' confused and contradictory statements only poured oil
on the flames. Regrettably, people vented their anger on Armenian
policemen. In any way, it was a horrifying tragedy and my family and
I are shocked and share common grief.
A slump in the national currency late last year caused a real shock
among the population. Armenia had not seen such a serious depreciation
of the Armenian dram for long. Government officials cited geopolitical
reasons for the situation - rouble downfall, decline in world oil
prices, anti-Russian sanctions. Do external factors alone account for
the 'black December'? Did Armenia's authorities take adequate measures
in that situation? Should further AMD depreciation be expected?
This is the second time for the past five years. Of course, pleading
'external factors' and playing a victim of geopolitical processes
is the easiest way. Russian economy was in a much worse situation in
1998. A 6% economic decline was recorded, and the ruble showed triple
depreciation against the USD. At present, Russia has huge gold and
foreign currency reserves, which rules out a default. With all that,
the Armenian dram showed stability despite Armenia's weak economy
and banking system.
Certainly, external factors play their role, but last December
they exposed our ailing economy rather than caused that unhealthy
situation. However, amid the pessimistic expectations, even minor
speculations may prove decisive despite seeming financial stability.
The Central Bank of Armenia is officially responsible for Armenian
currency and it made certain efforts to stabilize the Armenian dram.
But it was not enough last December. All the branches of power had
to coordinate their actions. But the results showed they were too late.
Economists say that the authorities' reputation and management
efficiency is often more important than fundamental factors during
crises.
As a negative factor, you mentioned also the fall in the prices of
oil. It's just the other way about. Oil-exporting countries take
advantage from falling prices. Cheap petrol and diesel fuel are a
good stimulus for economic development and can make up for the losses
caused by the decreasing transfers from Russia - given cheap energy
carriers' multiplying effect on the economy.
Given the internationally observed trend, the gas supply prices may
be revised too, if of course, the controversial agreement with Gazprom
allows that.
What will be the situation with the [Armenian] Dram? The Dram
exchange rate reflects the general situation of the economy and the
payment balance. Their deterioration will make the Dram cheaper,
while the improvement will foster. The Dram cannot live its own life,
isolated from the general economy. Anyway, sharp fluctuations of the
currency rate are impermissible; they jeopardize the financial sector,
undermining trust in the national currency and hitting our citizens'
pockets.
In one of your interviews last year, you made a prediction that the
country was entering into period of negative expectations. Some of
those expectations have unfortunately come true. Besides, as early
as just a couple of days ago, Moody's downgraded Armenia's sovereign
rating, changing the estimated forecast as "negative". What are your
estimates of Armenia's economic situation for the near future?
I cannot, unfortunately, say anything encouraging. If the economic
policies remain unchanged, then it isn't absolutely clear what should
improve the situation or cause an economic growth, motivating its
increased effectiveness. The downgrading of Armneia's sovereign rating
by Moody's will make the foreign borrowings far more expensive for
us, especially light of an increased foreign debt. In the mid-term
perspective, the EEU economy will be in a state of recession; hence
it is very difficult to assume any essential role there. The strictly
devalued Ruble will seriously change the structure of the trade with
Russia, without offering any advantage to our economy. There is a low
likelihood of serious investments from Russia; due to the sanctions,
they themselves have a problem with the refinancing of Western loans.
We are not particularly attractive to western companies because of
our membership in the EEU. It isn't clear what our trade volumes
with Iran will be. The international prices for colored metals
are not going to rise, as the forecasts suggest; it's going to be
just vice versa. The introduction of stricter norms by Armenian
banks raise the borrowed money's price, making business crediting
expensive. As for the development sector, [its prosperity] is not
even to be dreamed of given such a micro-economy, population flow
and decadent moods. With the economy's monopolization increasing,
the investment volumes decrease steadily, degrading the investment
activity. The internal political situation is not likely to improve,
as the political monopoly continues. So without drastic changes, it
will be extremely difficult to resolve those numerous problems. We
never hear any keynote speech from officials apart from speeches that
everything is fine or will be fine. It is obvious that the evaluation
of the country's situation drastically varies from the authorities to
the society, with either one or the other not being able to develop
the necessary understanding of the reality. Perhaps the authorities
really think that everything is all right or have been persuaded that
nothing has changed. Neither scenario leaves room for optimism.
This automatically gives rise to the question as to what the
authorities should do to extricate themselves from this difficult
situation.
They have to first of all admit the existing fundamental problems
and dispose themselves for an open dialogue with the society and
the business community over ways towards overcoming the situation
in the country, and the crisis. The groundwork of the success behind
the authorities' work is trust, which is missing today. The country
needs drastic changes, but I do not absolutely mean constitutional
reform. I wouldn't like to one by one enumerate all the obvious
and necessary steps. In Armenia, particularly its government, there
aren't few people who realize what needs to be done first. The biggest
impediment towards success would a conflict between the political
elite's economic interests with the long-term interests of the country.
http://www.tert.am/en/news/2015/01/23/Robert-qocharyan/1567795
From: Emil Lazarian | Ararat NewsPress