Armenia takes a step forward in civilized society building

PanARMENIAN.Net - The national currency exchange rate is not likely to undergo sharp depreciations. "Economy and Values” research center proposed to the Government of Armenia to develop a strategic model of stable development of the country.

"We need to develop a model of sustainable development, instead of having the economy, where the money remittances fuel the construction sphere, experiencing problems with deficit," he said.

In addition, according to Hergnyan, long-term strategy of Armenia cannot rely on the fact that the country has open communications, since "they can close". The model of sustainable development should be based on the lessons Armenia learnt in a crisis, as well as on technological potential, on the knowledge-based economy.

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For the development of the real estate market Armenia has a huge potential, the chairman of the Economy and Values Research Center of Manuk Hergnyan said.

In his opinion, if 2010 does not bring recovery in the real estate market, then in 2011-2012 tangible revival can be seen.

In particular, the demand is now stimulated by the increasing supply of mortgage loans. "This supply can lag behind the demand," he said.

According to Hergnyan, there are no alternative investment assets in Armenia, neither a developed stock market, and investment should flow into some area, so they automatically flow into the mortgage market. "That is why the real estate sphere in Armenia undergoes the greatest development,” he concluded.

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1.2% GDP growth in 2010 planned by Armenian Government is unrealistic, Armenian MP, ARF Dashnaktsutyun parliamentary faction member Artsvik Miniasyan stated.

“Last year’s experience shows government’s forecasts turn out to be unjustified. The forecast can also be viewed as a promise, which the government failed to deliver. So now we are practically facing 180% unfulfilled Governmental program,” he added.

“It’s time for Armenian government to come down to earth and act up to their forecasts through implementing concrete steps toward economy development,” Artsvik Miniasyan emphasized.

The government’s package of legislative initiatives to expand the list of local taxes does not have economic, social and political grounds, Artsvik Minasyan noted. "Expanded list of local taxes is another ill-considered step of the Armenian Government, without taking into consideration its further consequences," he said. According to him, this tax policy will lead to a new redistribution of the property, strengthening of bad faith community leaders and weakening honest leaders. The advantage given to community leaders is a real danger, particularly to those communities where citizens really do not have big revenues.

Artsvik Minasyan noted that the Armenian government is inconsistent in its policy of balanced development of the regions of the country. The government has lost its way on the road of socio-economic policies implementation.

The Government should ensure some resources for the upcoming elections by increasing the tax burden on communities and through "pressure on disobedient people''. The party suggests to consider the package of legislative initiatives as a concept and to determine how it would influence the socio - economic situation of citizens, strengthen the power of communities, etc.

Armenian MP, ARF Dashnaktsutyun parliamentary group member Artsvik Minasyan urged citizens of Armenia to be more active in defending their rights, promising social democratic parties’ support. “Popular initiatives, backed up by political forces, can turn into a major motive power,” he emphasized.

“While discussing state budget for 2010, Dashnaktsutyun offered to raise pensions, allowances and salaries in case of inflation, although the government insists there is no immediate threat of inflation. Nonetheless, oncoming gas price increase will definitely lead to new inflation-caused pressure,” Minasyan noted. “This, in turn, will spur dram offer slump at foreign exchange market, subsequently impacting product turnover in Armenia.”

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Chairman of the State Commission for the Protection of Economic Competition of Armenia Davit Harutyunyan received the Head of the OSCE Office in Yerevan Sergey Kapinos and Tigran Sukiasyan, responsible for OSCE national programs on economic issues, press office of SCPEC reported.

In the near future the SCPEC and the OSCE will sign a memorandum of cooperation. As a new means to improve the competitive environment the officials called the reduction of centralization in the market and development of small and medium-sized businesses, which, according to Davit Harutyunyan, is hampered by the absence of "long money, as well as the unavailability of credit starting businesses. SCPEC intends to assess the competitive environment in the regions.

At the meeting held on February 12, 2010, the Armenian State Commission on Protection of Economic Competition, SCPEC, discussed and refused an administrative complaint submitted by Agro Farm Company, the SCPEC press office reported.

According to the report, Argo Farm is among 7 pharmaceutical companies which concluded an anti-competitive agreement, unreasonably raising drug prices.

Companies will be imposed a fine equivalent to 2% of their annual turnover, the total sum of the fine for 7 companies exceeding AMD 450 million.

The SCPEC found the arguments listed in the administrative complaint unsound. Thus, the decision on the fine remains valid.

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Armenian Prime Minister Tigran Sargsyan received a delegation from the International Monetary Fund, led by the head of IMF mission in Armenia Mark Lewis, press office of the Armenian government reported. Welcoming the guest, the Armenian Prime Minister described the economic situation in Armenia and short-and medium-term development prospects.

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Deputy Minister of Foreign Affairs of Armenia Karine Kazinian , currently on a two-day working visit to Warsaw to conduct political consultations with the Ministry of Foreign Affairs of Poland, met with the Deputy Minister of Economy, responsible for economic cooperation between Poland and EU member states Marcin Korolec . According to the press office of the Ministry of Foreign Affairs of Armenia, the two sides stressed the need to promote Armenian-Polish cooperation.

Welcoming the proposal of the Armenian side on establishment of the Armenian-Polish intergovernmental commission, the Polish side proposed to hold the first meeting of the commission in Yerevan this year. Karine Kazinian dwelled on the agreements reached between Armenia and the European Union on economic cooperation. She attached importance to talks to forge deep and comprehensive Free Trade Agreement. Deputy Minister of Economy of Poland offered expert assistance to Armenia within the frame of negotiations on free trade.

EU leaders were set to meet in Brussels for an informal summit on Thursday, February 11, with a number of weighty topics on the agenda.

The morning's work session was set to centre round the bloc's attempts to write a new economic 10-year plan, with the aim of boosting competitiveness and creating jobs for the growing number of unemployed. Over lunch leaders discussed the current market turmoil that has racked weaker eurozone members in recent weeks, and in particular debate potential emergency plans for Greece. Germany and other eurozone members are hatching plans to bail out the embattled Aegean state, with investors keenly anticipating an announcement on this topic after the meeting.

An EU source with an intimate knowledge of permanent president Herman Van Rompuy's current thinking told journalists on Wednesday, "It wouldn't surprise me if there was a communication on this subject."

All eyes will also be on Mr Van Rompuy himself, keenly assessing whether the meek-mannered former Belgian prime minister is capable of tackling the multitude of difficult problems and stamping his mark on the new EU post, created under the Lisbon Treaty, EUobserver reported.

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On February 12, “Armenia-Turkey Relations and Cross-border Regionalism” social discussion featured the economic report presented by the director of Economic Policy Research Foundation of Turkey (TEPAV) Güven Sak.

The report gave an overview of Turkey’s experience in economy liberalization and the role of private sector in the development of international relations.

“Armenia-Turkey border opening will promote development of tourism in region,” the expert pointed out, adding that following normalization of ties, collaboration in high tech sphere can be established.

“Opening of border with Turkey will boost Armenia’s economy,” the expert summarized.

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Volume of remittances to Armenian residents dropped by 30.6 per cent in 2009 compared with the previous year amounting to USD 1,575.7 million. According to the Reference Book of the Central Bank of Armenia, a large share transfers are preformed from Russia - USD 950 million, 35 per cent less than in 2008.

USD 752.4 million transferred from Armenia abroad through banks, 33 per cent less than in 2008.

On February 1-7 AMD loans granted by banks totaled 15.8 billion. USD loans grossed 19.3 million.

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Ameriabank continues to strengthen its positions in Armenia’s financial market, with 57% client base growth over 2009, the bank’s press service reported.

31 of 100 major Armenian taxpayers are among active Ameriabank clients.

As a corporate bank, Ameriabank has developed a wide range of physical person-oriented services, which prompted significant increase in their number.

The number of Ameriabank accounts increased by 79.7%, legal entities accounts comprising 67.9% and those of physical persons - 82.2%.

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On February 5, 2010 ProCredit Bank celebrated its 2nd anniversary.

As Bertolt Hertzfeldt, Executive Director of ProCredit Bank emphasized, “ProCredit Bank offers banking services not only to small and medium sized businesses but also for all people, who live and work in the neighbourhood of the Bank. We provide transparent and fair conditions to our customers. We see team work as a key in delivering excellent service to our clients and want to thank our customers for the trust they put in us. We are proud that we have achieved such good results in a short period of time and look forward to a strong development in 2010”.