Current Armenian authorities 'unable to address deepening economic challenges' - economist

The devaluation of our national currency against the backdrop of foreign currency appreciation is linked to a deepening economic crisis amid the current authorities' inability to handle the economic situation, Armen Grigoryan, the head of the ARF-D's Committee on Economic Affairs, said yesterday,  commenting on the situation on the domestic market.

In an interview with Tert.am, the economist cited particularly recent official records revealing an essential decline in practically all the sectors of the economy (with the promised investments not beingin place and the tax revenues decreasing steadily).

"Those are phenomena that bring about negative outcomes, which in turn produce their direct impact on the financial stability and the social situation," he said, highlighting a noticeable surge on the domestic consumer market.

The economist noted that the higher prices for electricity and natural gas will directly reflect also on the cost price of the domestic product. "This situation will continue as long as the state's leadership has not changed," he added.  

Asked to comment on the reports that the outgoing transfers (approx. $12,9 million) outnumbered the incoming private transfers in the past months, Grigoryan noted that financial resources "normally select stable economic and political systems".

"Due to the current authorities' wrong economic policy choices, our state has become non-attractive for investors. The flow of money is linked to a range of conditions, the most important dealing probably with the existing situation after the war and the transfer of deposits to foreign countries' banks. In some cases even, the deposits were taken out of bank accounts to be put into other banks' safe deposit boxes. Also the amendments to the law on the banking secret reflects certain distrust in the financial sector. A number of profit generating industries in Armenia - such as the services sector - have sustained tremendous damage," he said, noting that many businesses transfer their resources abroad to carry out economic activity.

Blaming the authorities for not being sufficiently competent to offer reasonable solutions or evaluate the situation adequately, the economist cited the repeated warnings by expert circles against the practice of "sticking to empty promises". "They didn't listen to, or understand, anything, insisting on their liberal course. And this is actually why we have what we have at present," Grigoryan added.

Asked about the "economic revolution" model, promised by the authorities about three years ago, the economist referred to the repeatedly voiced theses proving the wrongfulness of the concept.

"Economy and revolution are contradictory phenomena. Economy needs stability, reliability and an opportunity for a long-term evaluation, whereas revolutions imply a phase of reforms. An economic revolution was among the authorities' most unsuccessful brands so to speak. It is likewise the authorities' style to blame everybody apart from themselves - including the opposition that had no leverage at all -  for their own failures. They blamed the impoverished for poverty - just by saying 'Put it out of mind' - and blamed our citizens for the failure [to combat the coronavirus] pandemic. They blamed almost everybody for illiteracy in the techniques waging a war. But they themselves are to blame for everything; I don't think anyone has doubts about that," he added.

As an important tool to promote a sustainable economic growth, Grigoryan stressed the importance of developing a specific program and plan of actions, conducting a proper assessment of resources and attracting professionals to do evaluations and SWOT analyses in different sectors of the economy .

"None of the enumerated factors is in place today. What we need, consequently, is political changes to evaluate the existing situation and put forward systemic solutions," he added.