The theme of “Aravot” online on the air is discussed between NA MP Lernik Aleksanyan (RPA) and economist Bagrat Asatryan
Aram Abrahamyan – Armenia’s state debt amounts to 4.5 billion dollars. Is it too much, or too little? And by what criteria is this issue determined?
Lernik Aleksanyan – I think that it is very difficult to determine. It is too much, if we compare it with our economic situation, and it is too little because we are entering into the international standards. Standards are different for different countries, but it almost reads as follows: it is a risk if the state debt amounts to more than 50% of GDP. According to my information, the state debt reaches 36 % of our GDP. I think that today Armenia’s economy cannot be developed without the loan. The loan can be both positive and negative, depending on how it is used.
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A. A. – At first, let’s figure out whether 4.5 billion is much or little.
Bagrat Asatryan – Truly, it is a difficult question. Today, there are a few problems. If I am a solvent, then I can have a lot of debts. For example, the US state debt exceeds GDP, i.e. more than 100%. The Republic of Armenia with its few property and means is kindly giving its property to the United States as a loan, and the United States owes us about 700 million dollars, but since it is solvent and has a reputation, it’s not a problem. Like in everyday life.
A. A. – And is there a standard for more than half of GDP, or less than half of it?
B. A. – In theory, there is no such a thing, but we must also take into account other circumstances, namely, what sources are used for repayment of the debt. We know that one of our country’s most difficult and serious problems is the foreign trade deficit: the import exceeds exports by approximately 3 times. Servicing the debt in these conditions is hard, regardless of whether it is low of the 50 percent threshold. We actually rely on the goodwill of our fellow citizens: migrant worker, relatives, uncle, etc., direct donations. It’s only a support, a non-reliable source for any economy: one day they will help, the next day they will get tired, or eventually, the opportunities of such assistance may come to an end. As it is now. A sharp deterioration of situation takes place in Russia, and, of course, one of its manifestations would be and is the reduction of remittances.
A. A. Do you agree with this standard, in other words, the “export-import” relationship?
L. A. – It is one of the standards. Naturally, it has a very large impact and is one of the main components of debt service. But if we today find it hard to tell which is more for less, then it is difficult to criticize, however, the debt has a tendency to drop. The debt in recent years is dropping, in other words, our GDP is growing faster. No matter how much we say that export is important, but it’s true that you’ve said that there are also other sources, not so reliable, but they exist. The discussion in full:
Prepared by ARAM ABRAHAMYAN
“Face to Face” talk show series are released by the Open Society Foundations- Armenia. The views and analyzes found in this broadcast express the opinions of the participants, and are not approved by the Open Society Foundations-Armenia, or its Board. This broadcast is made available thanks to comprehensive financial support by the Open Society Foundations-Armenia, under the mass media support program, grant No 18624.
