Sarkisian Defends Government’s Management of Economic Crisis

sarkisianYEREVAN (RFE/RL)–President Serzh Sarkisian defended on Wednesday his government’s response to the global economic crisis, saying that it has spared Armenia “serious upheavals” and confounded gloomy forecasts made by its opponents.

“These have been especially difficult months which we have endured without serious upheavals, with difficult and perhaps visible mistakes but at the same time with important and hard work,” he said in a speech at a conference held by the country’s largest business association, the Union of Industrialists and Manufacturers.

Sarkisian argued that despite a shortfall in tax revenues the Armenian authorities have not cut back on social spending, which rose this year, prevented wage arrears in the public sector and kept the inflation rate in single digit even after the 20 percent devaluation of the national currency, the dram. He stressed that the global downturn’s impact on the local financial sector has been minimal.

Sarkisian also claimed credit for the fact that virtually all of Armenia’s mining companies hit hard by last year’s plunge in international prices of base metals continue to operate and have laid off only a fraction of their workforce. Most of those companies are located in the southeastern Syunik region. Sarkisian visited the mountainous area and met top mining executives in March.

The Sarkisian administration’s anti-crisis program puts the emphasis on job creation through the implementation of infrastructure projects and financial assistance to local companies affected by the crisis. That assistance has involved equity purchases, credit guarantees and loans. One such loan worth $10 million was disbursed to the country’s largest metallurgical enterprise, also based in Syunik, in February.

The government has also secured $50 million in low-interest loans from the World Bank that are due to be channeled into small and medium-sized enterprises through Armenian commercial banks. Sarkisian said the government will attract soon “much larger resources” for that purpose from other external sources. He did not elaborate.

The President strongly defended these and other anti-crisis measures that have been largely endorsed by the World Bank and the International Monetary Fund. He said the authorities will also “redouble” their stated efforts to create a “level and favorable playing field” for all Armenian businesses. The lack of such a business environment has long been seen as a serious obstacle to Armenia’s economic development.

For its part, continued Sarkisian, the business community should be “more open and honest” in its dealings with the state. He also urged local entrepreneurs to be more “self-confident” in face of the country’s worst economic downturn since the early 1990s. “Some studies show that our [ordinary] residents are today more confident about overcoming the crisis than businesspeople,” he said.


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