Foreign loans should be invested in main branches of economy - Vazgen Safaryan

To suppress inflation it is necessary to develop the economy, instead of establishing high interest rates, Vazgen Safaryan, Head of the Union of Local Manufacturers, told a news conference on Monday.

"Our financial policy, with a 7.20% interest rate, is strictly fiscal, and it produces dire consequences on businesses. Such high interest rate is not a tool for suppressing inflation. We are required to develop our economy, and to do that we need investments," he said.

In that context, the expert particularly stressed the importance of investing international loans in the main branches of industry.
Agreeing with Safaryan on the issue, Mkrtich Minasyan of the Republican Party in parliament said economic growth should exceed the inflation rate.

"We must be primarily concerned with speeding up the economic growth so as it could surpass the inflation rate," he said, adding that economy and banks should be responsible for regulating the inflation.

Minasyan also said that back in December 2010, the cabinet had submitted to the National Assembly a tax package establishing simplified and more transparent procedures for small businesses. The proposal, he said, envisages annual license payments for small trading units.

"This applies to around 20,000 individual entrepreneurs who can benefit from such privileges," he said.

At the end, Safaryan spoke of fair vendors' complaints, saying that high customs duties on import resulted from a state policy.

"Instead of importing products from Turkey we must think of boosting the local production, particularly light industry. For that, we need tax and customs privileges and free economic zones. A lot of Armenia businessmen and entrepreneurs are currently abroad, looking forward to tax privileges that could enable them to develop light industry in Armenia," he added.