Monday, November 28 2016 16:20

ArmInfo. Famous Armenian economist Tigran Jrbashyan has resigned from the position of director of American Chamber of Commerce in Armenia (AmCham)  with mixed feelings. On the one hand he is satisfied with the work that has been done for further development of this structure, on the other hand he has deep feeling of disappointment with the state authorities' inability to set right priorities of economic development focusing on development of business environment and to refuse from vicious practice of managing economy at the expense of increasing the debt burden.

During the meeting with journalists today Tigran Jrbashyan has criticized economic policy conducted in Armenia. According to him all the attempts of the business community, one of the members of which was AmCham, to motivate the authorities to initiate crucial economic reforms that might be launched by adopting conceptually new Tax Code were not welcomed in National Assembly of the country. "We thought that we have reached agreement with the MPs to reformat the work basing on direct ties between entrepreneurs and legislations, using the mechanisms of public hearings and dialog, however this does not happen and the interests of the business were once again ignored", the expert noted. He stressed that the Tax Code, which should have become the first serious document aimed at development, has in fact become instrument of fiscal policy aimed at exclusively replenishment of state budget at the expense of further reduction of business activity. He stressed that the country has no other alternative than to start seriously develop business environment, increase internal capital investments and attract foreign investments.

It is impossible to further rely on vicious practice used for all these years based on increasing the foreign debts at the expense of which state capital investments are made and external demand is stimulated. "Such a flawed formula in economic policy may be used only in short-term perspective, as a measure for overcoming crisis conditions. We had started using it since the end of 2000ies and as a result we have witnessed deterioration of business climate conditions, significant reduction of amounts of capital investments in the main capital and unprecedented decline of direct foreign investments during the whole period of Armenia's independence", Jrbashyan stressed. According to him by the end of the year real GDP of the country will not reach even 1%, while amount of foreign investments will hardly exceed $100 mln.  Gross fixed capital formation (GFCF) does not exceed 21% in the country. "We currently need talks and slogans least of all. We should  restructurise the whole economic model, achieve of reallocation of public incomes considering stimulation of economic activities. Of course, we can continue to increase debt burden for some more time,  restructurise it supporting our vitality, however without drastic reforms in the economy nothing will work out", the expert emphasized expressing weak hope that after the new parliamentary elections in early April the situation may change.

To note, Armenia's aggregate state debt will reache54.6% of the country's GDP by the end of 2016. In 2017 according to Armenia's Finance Ministry's forecasts the indicator will reach 56.1%. Already in 2020 $921 mln will be spent on redeeming and servicing state debt, $164 mln of which will be spent as repayment of interest rates.

To note the amount of transfers to Armenia in 2014-2015 has declined by $700 mln, in 2016 decline by $140 mln is forecasted. Lacking about $900 mln the government increased the foreign debt almost equally.  As a result, as Finance Minister of Armenia Vardan Aramyan stated the country's foreign debt in 2014, 2015, 2016 increased almost by $900 mln. "In other case sharp devaluation of national currency and weak economic growth would be registered in Armenia", the Minister summarized.