ARMENIAN PREMIER: THE ANTI-CRISIS EVENTS OF THE ARMENIAN GOVERNMENT ARE DIRECTED AT CREATION OF THE BASIS FOR FURTHER DEVELOPMENT OF THE COUNTRY AND FORMATION OF A NEW QUALITY ECONOMY
ArmInfo
2009-11-18 15:29:00
Arminfo. The anti-crisis events of the Armenian government are directed
at creation of the basis for further development of the country and
formation of a new quality economy, Armenian Prime Minister Tigran
Sarkisyan said in the National Assembly today.
He also added that development of infrastructures, improvement of
business-environment, showing aid to the companies which had losses
because of the world financial crisis and fulfillment of the social
obligations are among the anti-crisis events. Despite the economy
falling in 2009, social sphere was fully financed. Among the priority
programmes of the government the prime minister mentioned the project
on construction of the new nuclear power block. The works in this
direction have been already started. The National Assembly has adopted
the law ‘On construction of nuclear energy block and the government
declared a tender to select the managing and building company,
which will build the power block. The total of 400 thsd dollars have
been already spent to fulfill the project. The second programme is
regarding upgrading of Yerevan power plant. The total of 24 bln drams
were spent in 2009 against 15 bln drams in 2008 for fulfillment of
this project. Within the frames of the building programme of the 5th
energy block of Razdan power plant the investment volumes will amount
to 97 mln dollars in 2009 against 64 mln dollars in 2008. The total
of 4 bln drams investments were made to restore energy transmission
and distribution lines in 2009 against 2 bln drams in 2008. The
total of 384 km roads will be put into operation by the end of 2009
against 163 km in 2008. The credit funds of the KfW bank 30 mln EUR,
European Bank for Reconstruction and Development 20 mln EUR and the
World Bank 30 mln dollars were attracted to restore water supply
systems. Within the frames of the given programme 300 km of water
popes and more than 50 pump stations were reconstructed. Within the
frames of the ‘Millennium Challenges’ programme, being financed by
the US government, the investments for restoration of the water
supply system and rural infrastructures will amount to 21 mln
dollars by the end of 2009. The total of 1760 apartments will be
built and commissioned at the Spitak earthquake zone by the end of
the current year using the state funds at 25 bln drams. Moreover,
certificates at 400 mln drams were given to buy apartments. The
project works on construction of the North-South highway have been
started. Asian Development Bank is taking part in this construction
having given 500 mln dollars to Armenia, the first tranche of which
60 mln dollars has been already endorsed. Although starting of the
Iran-Armenia railway was delayed because of the domestic political
events in Iran, in Armenia directorate of the construction was set
up and funds allocated to start construction. The All-Armenian Bank
was founded in 2009, which will start working actively in 2010.
Another block of anti-crisis measures, taken in 2009, according to T.
Sarkisyan, are the steps aimed at supporting the small and medium
entrepreneurship (SME). In particular, 18,5 bln drams out of the
Russian credit to $500 mln were allocated for crediting of small and
medium entrepreneurship. 3,7 bln drams were directed to implementation
of the small and medium entrepreneurship development programme. SME
enterprises were financed by the funds of the International Bank for
Reconstruction and Development to the sum of 17 bln drams. Armenia
started to use a pilot programme on creation of a company to deal
with export of cheese, for the first time. The programme will allow
500 cheese producers to find new sales markets outside of the country.
Essential reduction of the tax burden, which concerned 32,000 economic
subjects, allowed SME enterprises to save 11 bln drams. Extra-payments
reduced by 20 bln drams, that indicates reduction of the tax burden. A
new mobile operator, Orange-Armenia, appeared in the Armenian market
in 2009, that will significantly increase the competitiveness in this
sphere. The company’s investments in 2009 will make up about $90 mln.
A number of companies also started to provide their Internet-services.
And finally, the third block, where the prime minister included the
big enterprises, assures transparency of their activity, compulsory
audit, customs reforms and GSP+ privileged regime. According to T.
Sarkisyan, the actions the government took, have already given a
positive result, that is testified by the fact that despite the
crisis, Armenia raised its rating by 7 points by WB Doing Business
standards: the republic moved from the 52nd place to the 43rd. The
expansive budgetary policy, which the government choose to assure
the macroeconomic stability, has no alternative under the crisis
conditions, the prime minister thinks. As a result of this policy,
the deficit will make up 7-7,5%. Inflation, as it was scheduled,
will make up 4%+ 1,5%. According to T. Sarkisyan, we succeeded
to avoid sequestrate due to the structural changes, that allowed
to smooth out the crisis consequences. The PM emphasized that all
the anti-crisis measures should be accompanied by enhancement of
efficiency of the state machinery, sharp increase of transparency of
the executive agencies’ work and serious control by the government,
parliament and public.
The prime minister said the crises revealed the vulnerable sides of
Armenian economy. These are the low diversification of economy, the
need for long money, existence of oligopolies and low competitiveness,
ineffective incentive mechanisms, fundamental problems in the education
and heath sectors. The prime minister assured the parliament that
settlement of these tasks will be among government’s prior tasks for
2010. The draft budget for 2010 will make it possible taking all the
anti-crisis measures set forth by the prime minister. The indicators
envisaged in the budget for 2010 depended on the situation at the
moment it was being drafted. In other words, T. Sargsyan highlighted
the necessity for working operatively and reckoning with the changes
of the last 3 months already now. For instance, it is necessary to
include the funds of the Millennium Challenge Fund into the budget
revenues and expenditure submitted to the parliamentarians since the
US partners assure that these funds will be provided. In addition, the
European Commission has approved over 100 million EUR to Armenia. This
means that expenses in 2010 will be commeasurable to the expenses of
2009, the prime minister said.
Considering global forecasts a 1.2% economic growth is envisaged. The
debt burden is within our powers as well. The budget deficit is
mostly financed by international donor-organizations and this means
that the country will be safeguarded against market risks and it will
become possible in future to relieve the debt pressure on the budget,
he said. "If the global economic growth is delayed, the service of
our foreign debt will be postponed as well since these problems will
mean worsening of global indicators," the prime minister said.