YEREVAN, March 14. /ARKA/. The situation with the coronavirus COVID-19 can give a good reason for creation of domestic production in Armenia, Gagik Makaryan, head of the Republican Union of Employers of Armenia, told reporters on Friday. He said that the situation with coronavirus for Armenia contains risks that could affect the economy. But on the other hand, there are factors which, when used correctly, can significantly increase the level of diversification.
Among the risks, he singled out a reduction in supplies from Iran and China – the key suppliers of cheap products for Armenia, whose total share in the turnover is about 9% or $ 560-580 million.
According to him, Armenia can replace these goods with relatively cheap similar products from Russia, however, taking into account the problem of unemployment and poverty in Armenia and the fact that many SMEs are engaged in trade, this can seriously affect both small and micro businesses, and strike hard at the pockets of ordinary citizens. According to the expert, the state should play the role of a regulator in this matter – it should control deliveries so that they are not from infected regions. This is also important for maintaining stable prices and solving suppliers’ problems in such force majeure circumstances.
“The state should use the situation in its own interests by trying to curb local production, also by providing subsidies, encouraging cheap loans and providing state guarantees for production, which can replace imported products in their own interests, for example, to provide assistance or provide subsidies,” said Makaryan.
As a negative factor, he pointed out a sharp decrease in the tourist flow to Armenia from Iran and other countries, which will immediately affect SMEs and the services sector.
At the same time, he said, this can play a positive role, as many Armenian citizens who spent their holidays abroad will spend it in Armenia and accordingly spend their money here. “We can also benefit. If we quickly overcome the situation with coronavirus, Armenia will become very attractive to foreign tourists, especially from Russia,” Makaryan said.
As another factor that will impact the economy, he pointed out labor migrants who will be forced to stay in Armenia due to quarantine declared in many countries. Consequently, there will be a need to create new jobs amid reduced transfers and rising unemployment.
“In general, the economic rhythm in the world has slowed down, but this is a great chance to create our own production, new jobs and increase economic independence,” Makaryan said.
Eight cases of COVID-19 have been confirmed in Armenia. The first case was recorded on March 1. A -29-year-old Armenian citizen who was airlifted from Iran, tested positive for the virus. Then two Armenian citizens (45 and 27 years old) and a 51-year-old Italian citizen who returned from Italy were found to have coronavirus. On March 12, two new cases of coronavirus infection were recorded in residents of Ettchmiadzin who had previously been in contact with one of those infected. In total, 88 people are currently isolated. -0-