Government must launch unstoppable reforms
Below is an exclusive interview by RA Prime Minister TIGRAN SARGSYAN to the ARKA News Agency.
ARKA: Mr. Premier, how well is the Government prepared to relieve the negative influence exerted on Armenia’s economy by the continuing rise in the world prices?
T. Sargsyan: The principal threat to us is a price rise. International experts say that low prices should be forgotten for the following 15 years. Of course, this is a painful process, first of all for transitional economies, for the countries struggling against poverty. So the Government’s measures must be adequate to the challenges.
It will be an urgent priority. This first of all requires effective coordination of the Government’s monetary and financial policies – the Central Bank is supposed to assume part of the responsibility, with the rest of the responsibility to be laid on the fiscal policy.
We must first of all consider social programs, which are supposed to protect the most vulnerable sections of the population.
ARKA: Do you share the opinion that Armenia needs qualitative reforms, a kind of “economic revolution”?
T. Sargsyan: I certainly share this opinion, as these are the principal theses put forward by President Serge Sargsyan, which were also discussed by the ex-president Robert Kocharyan. We are starting reforms of the second generation, which first of all implies the necessity for involving professionals in the process.
ARKA: Which reforms can be expedited?
T. Sargsyan: Among the priority tasks are specifically a project of making Armenia a regional financial center, foundation of a pan-Armenian bank, development of the capital market in cooperation with the OMX, development of the postal service and foundation of a post bank, introduction of compulsory insurance, creation of a universal e-database in the health system, adoption of legislation on investment funds, introduction of corporate management principles into joint-stock companies, formation of consumer protection institutes on the financial market.
ARKA: Is any special program being elaborated to redress the imbalance between Armenia’s capital and regions?
T. Sargsyan: If you remember, one of the priorities of the program presented to Parliament by Serge Sargsyan is Armenia’s regional development. Imbalance reduces the potential for economic growth. It is obvious that Yerevan hinders Armenia’s economic development, while Yerevan’s development is being hindered as well. A new concept of Armenia’s regional development must of course deal with the problems.
ARKA: Armenia has been recording two-digit economic growth over the recent years. What do you think, will the planned key inflation and GDP indicators be ensured?
T. Sargsyan: As regards inflation, the planned indicator for this year can hardly be ensured as the global situation is most unfavorable, and we have no instruments to absorb the negative inflationary fallout. As regards economic growth, I hope that the budgeted figures will be ensured.
ARKA: What is your viewpoint on Armenia’s national debt? Is the Government going to issue Eurobonds?
T. Sargsyan: Armenia has a moderate foreign debt and we are not afraid. Everything depends on the purposes you borrow money for. If your investments contribute to the increase in your national produce, such a debt is a necessity for the countries that must eradicate poverty. So we have no problems here.
The issue of our own bonds depends on our progress in implementing our project of forming a financial center and in the project of developing the financial market jointly with the OMX.
ARKA: What do you think of the possibility of enhancing the Diaspora’s efficiency in Armenia’s economic development?
T. Sargsyan: I think that we are not making full-scale use of this factor now. It would be naïve to think we are. But, if you remember, this is one of the priorities of the Serge Sargsyan-headed Government, and one of its principal theses is the unification of the Armenian people and the use of the Armenian Diaspora’s potential.
ARKA: In what state have you left Armenia’s banking system?
T. Sargsyan: We can state that we have a stable banking system, that is, we may not be concerned over it. Its potential for stability is so great that we may not be afraid of any international financial crises. In this aspect, a conceptual solution to the problem has been found, and this stability only needs maintaining.
The Central Bank personnel have rather serious intellectual potential, which we must use. I think that this potential may be of benefit to the Government as well.
ARKA: Looking back at the achievements of the last ten year, what is your view of Armenia in five years or so?
T. Sargsyan: About what we have not done. We delayed pension reforms and mortgage. We have not a mortgage fund so far, which is unpardonable. We delayed the concept of financial center, reforms of post service, foundation of a post bank and creation of a universal database on health system. We have no effective investment laws. Open joint-stock companies have not established themselves in Armenia, and the institute of banking ombudsman has not been founded. We are just launching financial education programs for the population.
It would also like to point out crediting in Armenia’s regions, social programs for rural settlements and settlements located far away from Yerevan. We have numerous unresolved problems, and they are all our faults.
In principle, if the Government does not want to be a provisional one, it must launch unstoppable reforms. But if the Government works for the situation of the moment, it will be a short-lived one and can be dismissed in a few months. However, if we launch all the aforementioned long-term projects, they can not be stopped. For example, if we start a pension reform, it cannot be stopped, but must be carried through. The same can be said of the insurance and social reforms. This is teamwork, and dissolving the team means destroying the country. So my task is to launch the reforms.
ARKA: The last question. How does the new Premier plan to work with the press?
T. Sargsyan: I think that the previous experience of our cooperation was positive in that we tried to be as transparent as possible, implemented special programs for our work style to be clear. However, I should point out with regret that we did not see a reciprocal attitude on the part of mass media, as personal insults and biased assessments of our activities constituted a rather high percentage.
I think that the yellow press plays quite a role in our life. I understand that any society will have such kind of press, but when it prevails it means that society has rather serious problems. This situation requires serious bilateral reforms, which must be initiated by the Government. –0--
