NCI Determines Trends of Armenian Economic Growth

The National Citizens’ Initiative
75 Yerznkian Street
Yerevan 375033, Armenia
Tel: (+374 – 1) 27.16.00, 27.00.03
Fax: (+374 – 1) 52.48.46
E-mail: [email protected]

July 8, 2004

National Citizens’ Initiative Determines Trends of Armenian Economic Growth

Yerevan–The National Citizens’ Initiative (NCI) today convened a
specialized policy roundtable on “The Trends of Economic Growth in Armenia.”
The discussion, focusing on the challenges of this vital issue of public
concern, brought together government officials, academic circles, experts of
the field, public figures, and the media community to define the priorities
and development opportunities in the economic sphere, to make realistic
assessments of the current state of affairs, and to address the imperative
of a true struggle against corruption and the shadow economy.

Karapet Kalenchian, director of administration of the Armenian Center for
National and International Studies (ACNIS), greeted the audience with
opening remarks. He stressed the significance of economic reforms and
pointed to several mechanisms for achieving the objective. “In order to
settle a number of issues of strategic importance, in particular
strengthening the new independent state system and improving the living
standards of the population, we need to create prerequisites for the
proportional development of modern industry, the agricultural sector and
other fields of the economy, to improve tax policy, and to provide sustained
economic growth so that every Armenian family really enjoys its benefits,”
Kalenchian said.

Gagik Vardanian, the Republic’s deputy minister for trade and economic
development, addressed “The Strategic Directions of Armenia’s Economic
Development in Light of the Global Information Revolution,” detailing key
issues of efficiency and productivity in the Armenian economy. In his
opinion, information technologies provide great access and thus facilitate
quick orientation in the market as well as application of state-of-the-art
networks and electronic equipment, all of which lead to sustained progress
in the economy. “Given their efficiency in all spheres of life, the Armenian
government attaches primary importance to ITs. It has worked out a
development concept and a program of activities to face the challenges of
the world market,” he noted. “The government of Armenia has adopted
strategic programs for the country’s sustainable regional economic
development in order to play an active role in integrating into the global
information field.”

Gagik Makarian, director of the “Haiconsult” firm, delivered an illustrated
paper on “The Key Obstacles to Armenia’s Economic Growth and the Ways to
Overcome Them.” “It is senseless to speak of sustained economic growth
unless we struggle against corruption and the shadow economy, make a due
assessment of the operational branches of industry, provide mechanisms for
an attractive investment climate, make export volumes predictable, and draft
appropriate tax and customs legislation,” Makarian opined. According to him,
there are about 20 negative factors that impede economic growth in Armenia
in view of the relevant transportation expenses, unfair and unequal
competition, poor marketing experience, the political situation in the
country, and a number of other circumstances.

Yerevan State University economics professor Gagik Galstian entitled his
presentation “The Anatomy of Armenian Economic Growth.” “Economic growth is
not an end unto itself.” he said. “If there is growth there should be
prosperity, whereas the living standard of the population as measured by
substantive food intake per capita has been reduced twice over the last
decade.” An analysis of the data from 2003 brought Galstian to a pessimistic
conclusion: Armenia’s living standard is today on par with that of 1977 in
terms of its Gross Domestic Product, with 1980 in terms of its industrial
productivity, and with 1956 in terms of its cargo transportation and
residential construction. Thus, society is lagging behind by more than 25

The formal interventions were followed by exchanges of views and policy
recommendations among the public figures and policy specialists in
attendance. Noteworthy were contributions by MP Shavarsh Kocharian of the
National Democratic Party; former minister of state Hrach Hakobian;
economist Edward Aghajanov; Artak Zeinalian of the Republic Party; Stepan
Mantarlian of Armaveni consulting company; Alexander Butaev of National
Democratic Union; Petros Makeyan of the Democratic Fatherland Party; Ruzanna
Khachaturian of the People’s Party of Armenia; law professor Hrair
Tovmasian; and many others.

ACNIS analyst Hovsep Khurshudian closed the meeting with summary remarks.
“Unfortunately, it is difficult to conclude the seminar on an optimistic
note regarding Armenia’s economic growth,” he said, underlining that
economic growth remains erratic, illusory, and narrow-based despite
government assurances. “Moreover, the authorities have demonstrated little
or no political will to struggle against corruption, as they are mired in
the very clan system which impedes competition.”

The National Citizens’ Initiative is a public non-profit association founded
in 2001 by former foreign minister Raffi K. Hovannisian, his colleagues, and
fellow citizens with the purpose of realizing the rule of law and overall
improvements in the state of the state, society, and public institutions.
The National Citizens’ Initiative is guided by a Coordinating Council, which
includes individual citizens and representatives of various public,
scientific, and educational establishments. Five commissions on Law and
State Administration, Socioeconomic Issues, Foreign Policy, Spiritual and
Cultural Challenges, and the Youth constitute the vehicles for the
Initiative’s work and outreach.

For further information, please call (3741) 27-16-00 or 27-00-03; fax (3741)
52-48-46; e-mail [email protected]; or visit

From: Emil Lazarian | Ararat NewsPress