Mr. Guillermo Tolosa, Resident Representative in Armenia, International Monetary Fund (IMF), and Mr. Sergey Kapinos, Director of OSCE office in Yerevan, discussed the major challenges facing Armenia March 11. The discussion was organized by the Alternative research center.
In the preamble to his address, Mr. Tolosa dwelt on the changes in the economic situation in Armenia, touching on the developments in pre-crisis years. Many people thought the economic growth in the year 2000 was a construction-formed bubble. However, there were other factors contributing to the economic growth. Armenia was gradually gaining a better international competitiveness rating, Mr. Tolosa said.
As to the crisis, the IMF official stated it did not enhance Armenia`s competitiveness, and Armenian products showed a 50% price rise.
Following Mr. Tolosa`s address, Mr. Kapinos asked a question about Armenia`s major problems.
Mr. Tolosa pointed out two kinds of problems: structural problems Armenia had before, and problems that arose later. Low-rate improvement of business environment seriously affects the Armenian economy, Tolosa said.
Obviously, Mr. Kapinos was not satisfied with the IMF official`s answer. He asked one more question about the root of the problems. One of the foreign guests said that the problem may be the lack of democracy in Armenia or Armenia`s failing to reject Soviet standards.
The IMF official said that Armenia will benefit from more balanced distribution of its resources.
Finally, Mr. Kapinos decided to answer is own questions. "The problems stem from the system formed in 1990s, namely, oligopoly," he said. Oligopolies are unlikely to come to an end themselves, so there is a need for external interference. The current system makes Armenia dependent on transfers and import. Mr. Kapinos arrived at the following conclusion: only programs envisaging system management reforms will change the situation in the country.
The IMF is supporting the programs that will produce "evolutionary" results, Tolosa said. He reminded the participants of as rampant corruption in the United States in 1900s as it is in Armenia now.
