Gagik Makaryan, the president of the Union of Businessmen, thinks that if we are going to repay the debt by issuing bonds, then our business plan wasn’t good.
Yesterday the Cabinet made a decision on issuing foreign currency bonds in international capital markets, moreover, Tigran Sargsyan, the Prime Minister of the Republic of Armenia, assured that this step would allow us to repay the debt owed to Russia, as well as to obtain cheaper capital for the private sector in financial markets.
Let us note that the minimum size of the first issue of European bonds is $500 million for 10 years.
The Prime Minister considered the decision to issue bonds to be political and a means to repay the foreign debt, and Gagik Makaryan, the president of the Union of Businessmen, considered it during a conversation with Aravot to be a wrong calculation for the business plan. “When citizens take out loans from banks they draw up a business plan and clearly show how they are going to repay the loan. The state should also have a business plan in the same way. When we took a $500-million loan from Russia and used it, we should also have had a business plan how and when we would repay it, and if we had deadlines and obligations to repay, our calculation for the business plan and economic calculation should have been such that we would be able to repay that 500 million. Now if we repay the debt by issuing bonds, my understanding is that our business plan wasn’t drawn up correctly, and even if it was good, it wasn’t implemented.” In Mr. Makaryan’s opinion, that we have decided to repay the money owed to Russia is very good, since if we don’t repay it, we will be dependent on Russia.
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Mr. Makaryan thinks that issuing foreign currency bonds is also good, but he also asked a question at what cost we would repay those debts. “If we are going to issue bonds, which other countries can buy, we should announce the list of those states; why should we open
the door to everyone? The logic should be that they should be strategic partners; Turkey and Azerbaijan are not our strategic partners, therefore, one can limit the list.” In response to our question whether Armenia was so attractive to European countries and businessmen that they would buy our bonds, Mr. Makaryan said: “One should present the issue properly; if our economy remains uninteresting to everyone, even issuing bonds will not rescue us. If we want to change our economy – and the Diaspora will join due to the sense of patriotism – I think that the bond prices will be of political importance here. The countries that want to have political influence on Armenia or on this region through Armenia, they will obtain those bonds, because $500 million is a penny in international markets. Some country or some rich man will buy them, and it will be over.”
NELLY BABAYAN
