By Albert Khachatryan

The results of a most interesting survey were recently made public. It would be grossly unfair to similar surveys to say that this particular survey is anything special in the massive flow of information now. Day after day the public is “presented” with published works resembling medieval volumes, with solemn presentation ceremonies held. The point is that the survey was conducted by a government agency, whereas it is NGOs that publish the lion’s share of “paperback editions”. Of course, it is not on the authors’ hard-earned money, but on the grants awarded by various international organizations, that thousands of works are published. Our “benefactors,” like practical villagers, would never sponsor anything “intangible”, would they?

We are speaking of the recently published results of a time study conducted in Armenia. According to the Introduction, the survey was sponsored by the Swedish International Development Cooperation Agency (SIDA), with methodological assistance rendered by Statistics Sweden (International Consulting Office). The survey was supposed to give an answer to the question: what do our fellow countrymen spend their precious time on? The numerous tables contain a wealth of valuable information. For example, we can know that men spend one minute a day on preparing food at home, whereas women spend a whole hour! Gender inequality is obvious. True, somewhat confusing is the fact that the respondents’ age ranges from 15 to 80. We are not supposed to advise professionals, but age grouping would be desirable… Well, let us not be faultfinders. No doubt, in the bright future, the data will serve as a retrospective basis for comparisons.

Without playing down the importance of the survey, we would like to note that we are presently faced with numerous grave socio-economic problems, which, of course, are the main cause of gender inequality – in any case when it come to employment. The public would certainly like to get detailed information on the problems in question. But, as the saying is, he who pays the piper calls the tune. Armenian organizations – both government agencies and NGOs – would not object to “manna from heaven”, that is, grants, without thinking about the necessity for surveys of this kind. The result? Heaps of trash! On the other hand, numerous burning questions are not dealt with. One of them is: how efficient are the NGOs in performing their functions?

But what can be demanded from underdeveloped NGOs while powerful international financial institutions are not in a hurry to provide reliable information on their “effective” activities in numerous countries, whereas this information is required. The reason is that individual experts, both in and outside Armenia, call this “effectiveness” in question. There exists a prevailing opinion that the credits provided by such international financial institutions as the World Bank for implementing various programs in developing countries do not properly serve their purpose. The same experts account for the failures by ubiquitous corruption in the countries, defective projects and unskilled personnel.

Without dwelling on the global problems facing international financial institutions, we would like to address one of them, namely, individual public statements by the institutions’ resident representatives in Armenia. One of them is James McHugh, the former (to our good fortune!) resident representative of the International Monetary Fund (IMF). In April 2006, before the issue of an IMF credit to Armenia under the Poverty Reduction and Growth Facility (PRGF) program was discussed, he made an almost prophetic statement. He did not rule out that the IMF would have stopped its financial assistance to Armenia by 2008. He did not mean to “hurt our feelings”. Rather he was sure that Armenia would by that time have left the group of low-income countries. Now that the poverty level is rising again, it is clear that Mr. McHugh is a false prophet. Worst of all is, however, when an expert, against his conscience, justifies obviously excessive economic policies.

During that “time of peace” Mr. James McHugh made statements to the effect that a flexible currency policy was one of the reasons for the high economic indicators in Armenia. However, he never explained it in detail. We do not have to dwell on the fate of the “high economic indicators”. However, being an expert, Mr. McHugh should have understood that huge investments in real estate property (which actually ensured the “high” indicators) were hardly a reason for joy, especially amid the country’s dire need for investments, low-level economic diversification and the economy’s strong dependence on money transfers. All the defects became obvious when the global collapse affected Armenia. As regards the “flexible currency policy”, which, as we understand, was revaluing the Armenian national currency, the dram, Mr. McHugh must have committed a blunder! In the part of the world Mr. McHugh comes from, the economic theory is not too optimistic over the revaluation of national currencies in the context of export promotion.

In her turn, Ms. Nienke Oomes, the incumbent IMF Resident Representative in Armenia, proved to be more honest than her failed successor. This March she stated that 17-30 per cent AMD revaluation was registered in Armenia last year. That seemingly innocuous remark suggests the conclusion that the exchange rate had always been anchored rather than floating. Years ago, Roger Robinson, the former director of the WB office in Yerevan, admitted that excessive revaluation of the Armenian national currency might have a negative impact on the economy. By that time the AMD revaluation had already affected exports, causing a reduction in exporters’ profits. True, that was a somewhat belated admission – Mr. Robinson, who was on the point of leaving Armenia after “successfully” completing his mission, made that admission.

No wonder. While in office, you are supposed to say what you are ordered to. While leaving, you can afford the luxury of saying what you really think. Everything becomes clear after one has looked through a brochure released by the IMF, not by antiglobalists. The brochure particular reads that the IMF’s aim is global prosperity, preventing the taking of competitive advantage of currency devaluation… Of course, the brochure means world competition. But why such powerful exporters as Japan, South Korea and China will not listen to the IMF’s advice? The countries importing Chinese products, first of all the United States, believe the yuan exchange rate is apparently understated. May be, the highly-experienced Mr. McHugh, and his colleagues, will be sent on a business trip to China?

As part of the post-Soviet area, Armenia, whether it liked it or not, became a “target” of global policy of various international agencies, financial institutions, charitable foundations… Their methods and degree of influencing the economy range widely. For example, dozens of NGOs are prospering on foreign grants, while doing nothing. The grants are, however, of benefit — about 1% of Armenia’s population live on them! Since the NGOs are small in number, their propaganda of ideas alien to us is not so much detrimental.

Another matter is global agencies, such as the IMF. The countries following lead of such organizations get heavily into snowballing foreign debts, and Armenia is not an exception. According to rather unfavorable forecasts, the country’s foreign debt is to reach U.S. $3.5bn by the end of this year and U.S. $4bn by the end of next year – a fantastic sum for Armenia. Who knows how the country is going to repay this amount?

So it is time to think about a fundamental question: why did credits of billions of U.S. dollars fail to serve their purpose? And how is it that the international financial institutions have only now “discovered” numerous defects of the Armenian economy? They have existed for many years, have they not? Monopolies, unnecessary construction of elite housing, hopes for individual large taxpayers, dependence on private money transfers and so on and so forth. But, as the saying goes, kiss goodbye to your money, while the Gordian knot is getting tighter.

T.P.