From disaster to new beginning: Government plans to revive Armenian economy in 2021

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YEREVAN, DECEMBER 30, ARMENPRESS. The Armenian government eyes to make the Defense Ministry one of the boosting forces of the economy, and in the next years the military will become one of the largest clients of the economy, according to the Minister of Economy Vahan Kerobyan.

“2020 was a year of decline, but 2021 must become a year of growth,” Kerobyan told ARMENPRESS in an interview on the government’s action plan for reviving the economy.

“There are different assessments, the most optimistic one is perhaps mine. We are going to try to have even a double-digit growth, in order to compensate and even surpass the 2019 results. 2020 was a disastrous year – the coronavirus, war, but this is also a good chance for a new beginning, to rethink the branches of the economy, our lifestyle, to focus on education, science and so on. One of the important issues that the state should focus on is the extension of the value chains through deepening of cooperation. For example, there are good jewelers and good diamond producers in Armenia. But the diamond producers are selling their diamonds abroad, while the jewelers in turn are buying diamonds abroad. It seems like the cooperation should’ve been closer domestically, and the resulting added value that stays in Armenia would be greater, but this cooperation doesn’t exist, everyone is working on their own. As a ministry, our job must be to bring these people together. This is one of the directions, but not the most important one. The most important is to inject blood into the economy’s veins. And that’s called capital. In Armenia the capital continues to be very inaccessible. We have banks that give loans, and this is an established financial system, but this is just one of the financing layers of the economy. We have neither angel funding tools, nor private or venture fund tools, nor corporate bond market, nor an established capital market. These are all the fundamental infrastructures which should feed the economy with capital. Our biggest priority should be to make financial means accessible to the economy and generally businessmen and anyone willing to conduct business,” Kerobyan said.

The minister said they are planning to significantly change the government’s role in investment policy to improve the investment climate. “The state has many resources – property, money, legislative regulations, and we must use this all to encourage the investment environment. For example, we don’t have a good legislation on reservoirs, and reservoirs aren’t being constructed. There is big competition now in terms of solar power stations. Now, if we give good opportunities to people, good business case on reservoirs, then we can create a new investment sector. And those who want to make a one-time investment and receive a 20-year guaranteed profit will immediately enter this business. We will create new opportunities.”

Speaking about the devaluation of the Armenian dram, Kerobyan dismissed concerns and noted that the devaluation is actually boosting exports.

“As an export-oriented country and economy, we should certainly keep our currency in line with those of our main trading partners. And today the Armenian dram is a lot more stable than the currencies of our main partners – EEU countries, Georgia, Iran and many others, where this year they experienced a COVID-19-related currency devaluation of 30-40%”.

“From this perspective we believe that on the contrary this devaluation is far less than the Armenian economy needs,” he added.

Interview by Anna Grigoryan; Editing and Translating by Stepan Kocharyan

 

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