A FORCE MAJEURE YEAR AND SIMILAR EXPECTATIONS
Lragir.am
13:55:24 – 26/12/2008
The year 2008 was that of force majeure both in terms of external and
internal policies, stated the director of the Politeconomia Institute,
political and economic expert Andranik Tevanyan on December 26 at the
Pastark press club. According to him, March 1 was a home political
challenge which resulted from the mistake of the government and
had a negative impact on the country. Among external challenges,
Andranik Tevanyan notes the recent activity regarding the talks for
the Karabakh settlement in which Serge Sargsyan said willing for
concessions, and which did not come into being because Ilham Aliyev
wanted more than the seven regions. Thanks to Aliyev’s appetite, the
talks for Karabakh did not take a bad turn, which was brought about
by cooperation between Russia and Azerbaijan; in order to thwart the
program of Nabucco, Russia won over Azerbaijan and made Armenia agree
to concessions in the Karabakh issue, and Lavrov stated that all the
issues except that of Lachin have been agreed on.
According to Andranik Tevanyan, the most serious challenge of the year
is the global economic crisis, noting that the government’s statements
about having tackled its first wave are true to the extent that the
government tackled the first wave through silencing the crisis.
However, the expert says that the economy of Armenia underwent regress
without the economic crisis because after the 2007 parliamentary
election a one-party system was shaped which launched a policy of
economic bolshevism.
The first and heavy expression of this policy was, according to
the economic Tevanyan, the elimination of the lump-sum tax, which
increased the tax burden of small and midsize businesses, multiplying
their tax liabilities.
By the way, Andranik Tevanyan thinks that the dissatisfaction of
those people caused the great opposition surge in the presidential
election because the government had eliminated the source of income
of 300-400 thousand people.
Generally, the policy of economic bolshevism, which was determined by
the desire of the government to accrue wealth, adopted a tactics of
economic redistribution through tax repression. According to Andranik
Tevanyan, the government also set to collect a big budget because it
thinks the best way of ruling people is to collect everyone’s money,
especially that the lack of public control over budget outlays enables
making big money in legal ways.
For instance, the 2009 budget twice exceeds that of 2007, whereas the
GDP has not doubled, and there is no proportionality, Andranik Tevanyan
says, noting that the 2009 budget is a budget which generates rather
than tackles crisis. Andranik Tevanyan says it is a heavy burden for
the economy impacted by the global crisis, and it is not ruled out that
the government may face necessity of sequest ering in the middle of the
year, that is to cut down both budget expenses and outlays. Otherwise
the consequence will be heavier, the economist thinks.
Generally, he thinks that in 2009 Armenia will face social tension,
cut in jobs and remittances will be felt acutely. In order to tackle
this, the government must adopt a policy of cheap money, not revaluate
the dram artificially, especially that there is no external inflation
pressure because the global crisis causes prices to drop. According
to the economist, the government must relieve the tax burden, decrease
the tax on profit, charge the VAT from the economy rather than on the
border not to deprive the businesses of working capital which they
need in time of crisis. Andranik Tevanyan says if the government
does not revise its policy and does not take the necessary steps,
the situation will be very complicated. In addition, this situation,
according to the economist, may cause the rate of crime to go up, which
is typical of crisis. The government has not boosted the budget of
the police, and a policeman will have to do more work for the same pay.