Vazgen Safaryan: Armenia needs to recover industrial country status

ArmInfo. Today we have an objective to rehabilitate the status of Armenia as an industrial country, Vazgen Safaryan, Chairman of the Union of Manufacturers and Businessmen of Armenia (UMBA), stated at a press conference on November 30.

The expert justified own opinion by the positive dynamics of industrial production volumes within the unfavorable situation with an economic stirring at 0,4 %(January-October 2016). According to his wording, during January - October the industrial sector demonstrated a growth for 4,5% in  annual  view  with secure production volumes at AMD 1.1. trln. At the same time, the positive tendencies within economic activities slowing down (from 3,5% in January-October of 2015) are present in the export sector, the expert mentions. "Following the latest data the total volume of the products export from Armenia exceeds AMD 1,4 bln with annual growth at 19,8%. It is not excluded that by the end of the year these volumes could reach AMD 1.6-1.7 bln, and that will become a historical maximum for our country in respect to recent years.

The UMBA Chairman sees the solution in establishing the Ministry of Industry and Foreign Trade. "As far as we are EEU members, we should have such an entity here, as it is in Belarus, Kazakhstan and Russia. The retitling of Economy Ministry to Ministry of Economic Development and Investments is not what we did expect. We expected that the Prime Minister will initiate an establishment of such an industries management entity, which should lead to feasible changes," he stated. "But, to our regret, the GDP is capsulated mostly by agricultural export", the expert clarified adding that the essential growth of agricultural export to Russia in 2015 formed about 133 thousand tons, which is the result of joint efforts of vendors and Ministry of agriculture. Safaryan noted, that a special attention should be paid to machinery and equipment manufacturing. "We should bring the government to an idea that we should implement a transition to the final product manufacturing," he said.

Answering ArmInfo reporter's question regarding the competitiveness of Armenian machinery manufacturing, Safaryan mentioned that considering the Rostech Corporation  proposal made to Armenian President, the Economic Development Ministry holds  a  number of meetings with machinery industries top managers to evaluate the capacity of Armenian manufacturers in such kind of contracts. In respect to the issue mentioned negotiations are being held with Russian party regarding investments, and the Armenian side will pay out the debt with the final product.

To note, the economic activity growth in Armenia slowed down to 0.4% in Jan-Oct 2016 from 3.5% in Jan- Oct 2015, with services and industry remaining the key drivers. In Jan-Oct 2014, the economic activity growth was much higher - 4.2%. By the preliminary data of the National Statistics Service, in October 2016 economic activity dropped by 18.7% (down 7.8% versus Oct 2015). The production volume in the reported period grew for 6,5% up to AMD 1.152 trln versus the 4,6 % growth a year ago. The volume of equipment and machinery production, computer, optical and electronic processing during January-September 2016 formed AMD 11,5 bln within tha annual growth at 14,8% versus AMD 9.6 bln and annual drop down for 5,4% for the same period of the last year.