Darbinian Praises Economic Reforms

YEREVAN (RFE/RL)–Prime Minister Armen Darbinian said the Armenian government is striving to turn the country into a major transit state–engaging in all regional integration projects and working to upgrade the country’s overland–rail and air communication with the outside world. Darbinian told reporters on Monday that the relatively high growth rate this year coupled with extremely low inflation and much improved tax collection mean his cabinet’s policy of economic reform is on the right track.

"One of our main priorities is to transform Armenia from a regional impasse into a reliable hub guaranteeing transit of goods," Darbinian said. He said Armenia is an "active participant" in the European’s Union’s TRACECA project to build new trade routes linking Europe to Central Asia via the Caucasus–and has been working closely with Georgia and Iran on joint transport projects. "The involvement in TRACECA is highly beneficial for Armenia and our proposals to that effect have been received with great interest," he said. Darbinian submitted Yerevan’s proposals at an international conference on TRACECA held in Baku in early September.

Darbinian further announced that the Armenian and Georgian authorities are working on the "creation of a joint railway system" to facilitate regional and bilateral trade. He claimed that Tbilisi and Yerevan are seeking external funding for an idea to refurbish a highway linking Georgia’s Black Sea cost to the Armenian-Iranian border. Earlier this year–an American billionaire of Armenian origin–Kirk Kerkorian–pledged $85 million for the project–which would provide for the shortest overland link between Persian Gulf and Black Sea. The money sought will mostly go to the reconstruction of battered roads in Armenia and Georgia.

Among other steps contributing to Armenia’s regional integration–the prime minister mentioned an agreement with Gazprom–Russia’s natural gas monopoly–and construction of a big cargo terminal at the Yerevan airport Zvartnots. Darbinian said a new pipeline for Russian gas supplies to run across Georgia could also be used for transit purposes in the future. Azerbaijan and Turkey–two of the four countries bordering Armenia–have been refusing to open their borders with the latter–demanding that Yerevan recognize Azeri sovereignty over Nagorno-Karabakh.

Premier Darbinian gave a "quite positive" assessment to Armenia’s economic performance in 1998–citing improved macroeconomic indicators and revenue collection and arguing that the country was kept from "financial upheavals" that have been dogging Russia. The government’s statistical data for the first nine months of the year shows a 7 percent economic growth–compared with the same period in 1997. Consumer price index was 6 percent lower than in December 1997–with the government saying that inflation will not exceed 3 percent for the whole of 1998. The period in question also saw a 42 percent rise in budget revenues from tax collection.

The government’s draft budget for 1999 projects a further 23 percent increase in tax revenues. With 78 percent of Armenia’s GDP generated by the private sector–Darbinian declared that market reforms have become "irreversible."We now need to move from extensive to effective privatization," he said.

The prime minister boasted a "very serious success" in overcoming the grave energy crisis which hit Armenia in the early 1990s. He said Armenia is currently exporting energy to Georgia and Iran–but did not give figures.

But Darbinian acknowledged that there is a long way to go before most Armenia’s–who have experienced a drastic fall in living standards since independence in 1991–can feel their benefits. He said the faster growth has only resulted in roughly 8,000 new jobs this year. He stunned reporters saying that the meager salaries of many employees in the public sector were not paid in September and October to fend off an outbreak of inflation in the wake of the Russian financial crisis. Darbinian vowed to eliminate all wage arrears by the end of the year.

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