Question: Mr. Asatryan, an economic decline of 16.3% has been registered in Armenia. What level can it reach by the end of the year?

Answer: I think, and hope, Armenia has reached bottom and I forecast better indicators for the end of the year. An economic decline of 12-13 per cent is expected toward the end of this year. But, I would like to note we should not be enthusiastic. A lower decline can be expected only due to the fact that the end of last year, particularly the last quarter, proved to be too bad for our economy. I would like to remind you that a 20% economic decline was registered in Armenia in the last quarter of 2008 as compared with the last quarter the previous year. That is, if this year’s decline is, say, 18%, it means a positive result for us. I say this because everybody is waiting for the results of the Government-launched anti-crisis program: positive or negative.

Question: Armenia borrowed credits from other states and international financial agencies. Have not we reached a dangerous point?

Answer: This question should be viewed from at least two aspects. If we compare the country’s foreign debt with its current GDP, the foreign debt does not reach the dangerous point even if the current rates of increase are maintained. However, we should revise this generally accepted approach to the foreign debt in the context of actual tasks for our country. From this point of view, our foreign debt should be compared with the current exports: how many years’ exports are necessary for Armenia to pay off its foreign debt. From this aspect, the situation is, of course, much more difficult.

Question: What is you opinion of credit efficiency?

Answer: I will say what everyone does: unsatisfactory. While increasing our foreign debt, we are speaking of anti-crisis funds. Did not foreign funds reverse the economic situation in Armenia? No, they did not! And the current economic indicators are evidence thereof. What are the sectors the funds are invested in? Do the investments guarantee economic reproduction, an economic level that would later enable Armenia to fulfill its commitments without problems? The answer is negative as well. The construction sector has to date been the primary sector the Government-borrowed funds have been invested in. But it will produce a short-term effect. It is natural demand that is topical: is it right to invest Government-guaranteed funds in housing construction, a sector serving very narrow circles? It turns out that a couple of oligarchs get Government-guaranteed funds to construct flats distributed among the members of their narrow circle. It is clear that positive results can promptly be achieved in this case. But this is a short-term effect, and the funds cannot be re-invested. Another matter, if the funds are invested in the economy and industry. Enterprises would manufacture products that would enable Armenia to recoup investments.

Question: What are the sectors funds should be invested in to ensure high efficiency?

Answer: First, I would like to note we are dealing with an unprecedented situation. Of primary importance is the following principle: which are the sectors the Government should support? They are obviously the sectors that are of importance for the country’s economic future, the economic entities creating values – import-replacing or exported ones. That is, the Government must first of all support the production sector. The next sector is small and medium-sized businesses, which fact is pointed out by everybody. The country’s viability, and particularly the viability of the economy, depends on the state and development level. It is not only unhealthy, but also has an outcast status. We should realize the fact that the crisis is not only a test for our potential, but also a prerequisite for creating a dynamically developing system.

Question: How effective is the Armenian Government’s anti-crisis policy?

Answer: It is positive results that show effectiveness, but they, unfortunately, are lacking. Moreover, Armenia has no anti-crisis program. Individuals, for example the Premier, have made statements, but a program approved by our “gifted” National Assembly is still being implemented in our country. The program provides for 9.2% economic growth, with corresponding budget estimates. What anti-crisis program can we speak of under the circumstances? I said on several occasions that statements made by individual officials and even most brilliant ideas expressed “in camera” do not mean a program. We need a real program to get out of the situation. And it must be a program in conformity with the country’s legislation. What is being done now is nothing but uncoordinated efforts that have little effect.

Question: The Premier admitted the fact that the Armenian economy is dependent on external influence. In this context, what does the Russian economy suggest to you? What do you think, when will we overcome the crisis?

Answer: It is no secret for anybody that the year 2009 has proved a failure. Unfortunately, the authorities were among the last to come to realize the fact. We do not have any guarantees against the economic decline until 2020. I think we will close next year with negative results. Positive trends in the American economy can be the best result at the end of the year – if the Russian economy stabilizes and ensures growth of at least 2%. Only in this case — provided the authorities take necessary measures – can the economic decline in Armenia be checked and economic growth expected in 2011. This is not guaranteed because the situation remains serious in Russia as well. They summed up the first half of the year, and the decline was more serious than forecasted, 10.5%.

I would like to take the opportunity and say that we should estimate the period required to overcome the consequences of the crisis. It will take Armenia four to five years at best. Provided, of course, the authorities undertake the elaboration and implementation of a relevant program.