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Armenian News – NEWS.am presents the abridged version of the speech by Masood Ahmed, Director of International Monetary Fund (IMF) Middle East and Central Asia Department, delivered in Leadership School of Armenia. The full speech is available on the IMF website:  

“Let’s look at the external environment that Armenia now faces, with a focus first on key trading partners. The outlook for Russia is for a decline of 3½ percent in 2015, no growth next year, and a pick-up of growth to 1½ percent per year over the medium-term. The Russian authorities see a more optimistic path, with growth of 3 percent over the medium.

Turning to Europe, growth is also expected to be modest in the next two years and over the medium-term, around 2 percent. China and other emerging markets are important for Armenia’s commodity exports—metals and minerals. Growth in these countries is expected to slow in 2015–16. Importantly, in both advanced and emerging economies, there are signs that potential growth may have decreased.

With this context, Armenia is likely to grow at a fairly slow pace over the next several years, with a decline this year, flat or slightly positive growth next year, and growth of around 3½ percent in the medium term. This will make it challenging to create jobs, improve living standards, and reduce debt. Forceful reforms are needed to make the Armenian economy more open, efficient, dynamic and connected with the region and the global economy. 

Let’s look at the geopolitical landscape. The South Caucasus remains a region of significant tensions. Here I have in mind Nagorno-Karabakh, Armenia’s relations with Azerbaijan and Turkey, tensions between Georgia and Russia, and relations of the international community with Iran. These tensions affect interest and investment in the region as they lead to a high financial and psychological risk premium.

The challenges that Armenia faces are big. Ongoing geopolitical and geographic challenges. Armenia is a small, landlocked country in a touch neighborhood. Looking forward, the landscape is difficult. Russia, Armenia’s long-standing partner, faces a long period of slow growth, as do Europe and China, emerging partners of the last decade. Slow growth in Armenia is not good enough. It’s not good enough to generate jobs, stem emigration, or raise living standards.

Leadership by well-trained, well-informed, and dedicated individuals is needed across political and economic issues. Leadership must be open to new ideas, promote innovation, and work in new ways to address challenges and seize opportunities. Armenia’s sound macroeconomic policies provide a strong platform for success for capable leaders with vision.

For Armenia’s current leaders: strong and decisive efforts are needed to build on sound macroeconomic performance to improve the business environment, open the economy, and integrate it closely with the region and globally.”

 

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This text available in   Հայերեն and Русский
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