The new loan will not have any positive impact on the economy
ANC member and economist Vahagn Khachatryan is sure that the 300 million dollar loan will be spent ineffectively, it will yield no result. Recently, the government approved the 300 million dollar loan agreement provided by the Eurasian Economic Partnership anti-crises fund, thereby increasing the burden of RA public debt. Mr. Khachatryan, in an interview with Aravot.am, said that the RA Government has exhausted all resources, and now it should raise funds to meet its obligations. “The only way to get a loan. This is a special loan, such loans are not often obtained, it is received by the World Bank and it is a budget support loan, but there were tough restrictions on the loan issued by the World Bank, it was called effective management loans. This 300 million dollar loan is a free loan to be able to solve their financial problems. I am sure that it will be ineffective and produce no result, they will write whatever they want about the direction of spending this money.”
The economist said that the danger is that the public debt is growing, in 2016, the public debt will reach 5.5 billion dollars, and 285 million dollars is the loan servicing. “In other words, nothing prevents the authorities to solve the nowadays problems. There is a lender and they borrow and use, that’s it, without a result.” Finance Minister Gagik Khachatryan said, “The cheaper money is available, certainly, in the manageable level, should be attracted and stimulate the economy. If we do not have the financial resources and do not bring financial resources from the outside, then what should we do? Our debt is approaching the 50 percent threshold of GDP, and we are concerned about it, but we do not have much to worry about. Importantly to have cheaper money, and most importantly that the programs should be earmarked.” “It is not right, we are a state eventually. There should be a true goal for taking the loan. The main goal should be moving the economy, which I highly doubt. Since 2008 up to now, the public debt reached from 1.5 billion dollars to 5.5 billion dollars. In 2008, the Gross Domestic Product was 11 billion 690 million, so far we have not reached this level. What are the results of the money brought from outside up to now? None,” said the economist responding to the finance minister.
In response to the observation of Aravot.am that the Finance Ministry assures that the money of this loan will be directed to elimination of obstacles ensuring a higher rate of economic growth, and increasing the efficiency of public finance management, so what the economist thinks about the spending of money in these directions, whether it is not an announcement made in the air, Vahagn Khachatryan said, “What elimination of the obstacle? There is no obstacle. They must be able to give salaries and pensions, but they are unable, and the budget is not doing sequester, Russia did, what was the problem? And they, the authorities, have decided to increase the debt by the loan, they see no problem, nothing prevents them, but borrowing money is not a joke and kidding.”
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Mr. Khachatryan said that such systems of Armenia’s management eventually are subject to bankruptcy and make people get into trouble and the ordinary citizen has to pay these debts all his life. Will the 300 million dollars revive Armenia’s economy or the economy can possibly revive without this loan, in response to our question, the economist replied, “The countries where there is no corruption, the government officials are not businessmen, I would think, well, after all these loan funds are going to the economy, will be helpful. But, since it is not the case, this loan will not have any impact on reviving the economy and its growth. They have increased the public debt by 4 billion dollars during 7 years, they have taken loans, but the effectiveness is zero during these years”.
Nelly BABAYAN
