In conditions of absence of environmental issues Armenian government must bear the consequences: economist on Amulsar

Aysor.am spoke with the director of Economic Development Initiatives Marine Arakelyan.

- Ms Arakelyan can you please describe the current economic situation in Armenia?

- To understand the existing economic situation, it is necessary to understand what sectors are the motors which ensure the growth. The agriculture which had 18,4% specific weight in the GDP structure in 2013 has significantly reduced during the next years. Moreover, during the past three years the growth tempo of the sector has reduced with the GDP growth mainly being agreed with the growth of the processing industry and service sectors.

If this tendency continues in 2019-2023 in the mid-term period the main motor of the economy may become the service sector. IT and tourism sectors may ensure economic growth.

- What has changed after the revolution in May? What path our country has chosen?

- As you know, it has been stated about boosting export promoting economy and building inclusive economy for the first five years. It is difficult to predict how inclusive the economic growth may be as everything depends on the real GDP growth tempo.

As to the GDP growth tempo after the revolution, as compared with the same span of the previous year the growth tempo reduced and the 5,2% annual growth was mainly agreed with the results registered in the first quarters.

- It is being spoken about economic revolution. What is necessary to change? Do you see any risks or not?

- First I would like to say that there is no “economic revolution” term, in economy we use “economic miracle” term. As to what it is necessary to change, I will say that it is first necessary to pass from phase of efficiency to the phase of economic development based on innovations. Moreover, it is necessary to adopt economic diversification policy, improve the business environment and state support system to small and medium-sized enterprises. The main risks are agreed with the necessity to ensure safe business environment as in the opposite case investments will reduce which will result in slowing down the money turnover and economic growth tempo.

- Do you have any forecasts about big investments in Armenia? Is our country perceivable for big investors?

- With the amendments in the tax field it is planned to improve the business and investment environment, which will have a positive impact on economic development and raise of competition level in the country.

Moreover, according to the Doing Business 2019 report Armenia has improved its position being ranked the 41st among 190 states. Nevertheless, I think this is not enough. As to implementation of big investment programs the periodical amendments in the tax legislation are not desirable as big investors prefer stability.

- Lydian Armenia has stated about disputes with the government and about possibility to apply to arbitration court. What will the results be for Armenia?

- Taking into consideration the big noise over the case, it will be untimely to make any predictions now as applying or not applying to arbitration court will depend from the future steps of the government. At the same time, it is necessary to note that we have Jermuk town on one side, which is our resort town and is located 8-10 kilometers from Amulsar mine infrastructures and on the other there is Lydian Armenia company which was one of the 20 biggest tax payers in Armenia in 2017 while as a result of suspension of its works it has appeared on 33d place.
It appears that in fact the mine ensures the quick return of investments and the tourism ensures development of the community. In conditions of absence of any environmental issues the government must bear the consequences and in case of their existence, decide on its own which sector is prior for country’s economy.