Interview with the economist Dr. Ashot Yeghiazaryan Mr. Yeghiazaryan, according to the National Statistics Service, in the first quarter of this year the index of economic activity is high, about 6.6%. What does this mean? What factors of growth are there in the economy?
Provided we do not doubt the credibility of official data, we may say the following: our economy has shrunk to the point that short-term fluctuations of growth indices are possible. However, in a more long-term period, the evaluation will be in line with the general situation. In this respect, I don’t see factors of growth. In a short-term perspective, we may see such fluctuations but I repeat that unless we trust the credibility of these indices. The government assures that 850 million dollars will be invested in 2017, and in the next few years 3.2 billion drams. How realistic is this?
Part of the investments are projects in the implementation stage. For example, the investments in Amulsar provide a high level of investments for a specific period of time. Or, projects are implemented on funding provided by international organizations, the project of Vorotan Cascade, projects are implemented in the sphere of mining which ensure investments. However, the other part of investments which is not included in this number is merely pledges or negotiations, the issue of their economic feasibility is open. And it still has to be identified whether these investments will be fully implemented or not.
Second, the total volume of these investments is rather small to result in more or less acceptable economic growth. In this situation we can ensure economic growth, more or less, if the level of investments is at 1.5-2 billion dollars. However, there are no such investments. Those 3.2 dollars which are for several years and are not certain yet is a very small number. Has the climate for investments improved, are there changes?
There is an important point. Even if progress is achieved towards improving the climate, it is too little to bring investments. Investments are usually made in specific spheres and must be feasible. In other words, investments must pay back, the goods or services received in the result of investments must be competitive otherwise investors will not dare do that. And given the situation of Armenia which has serious limitations relating to foreign markets, its economic policy and transportation, it is impossible to have competitive goods and services. Besides, there are limitations with partners which could help resolve the issue of finding new markets in Europe and the Near East.
This is a very serious issue, it has always been a serious issue. It is not accidental that the post-Soviet states, including Armenia, were providers of raw materials. It means they did not have other competitive industries and did not make strategic investments in those industries. That economic space which includes Armenia as well has such an infrastructure where over time investments were made in raw materials only. And the issue is much serious than the primitive approach that money is needed: there will be investments, manufacturing will be created, jobs will be created. This is not valid for the modern economy. It is necessary to have competitive products to place on the market and only then will investments be feasible and realistic.