The problem related to inflation was discussed at the session of the National Financial Credit and Budgetary Affairs Committee. Civil Contract MP Khachatur Sukiasyan asked if they had studied the experience of the countries where there was a large flow of foreign currency, what solutions did they have? According to him, they are not working efficiently in Armenia. “There is no analysis of the increase in transportation costs. I don’t know what the justification is, but if it was necessary, let the state support, produce 100 cars, and subsidize someone so that transportation costs do not rise.”
According to him, regardless of how much foreign currency comes to Armenia from abroad, we should use whatever tools we have in our reserves. “There are a lot of opportunities that are being overlooked. You are the Central Bank, which is responsible for solving this or that problem, the Ministry of Finance, the Ministry of Economy has another problem.
Not once did I see a modern analysis. Recently, reputable organizations made analyzes about 7 countries, none of them said: people tell us what problems we have, how competitive we are, what the country is better than us, let’s do this. A public official should think about how efficiently they can make this or that sector more modern. Who is involved in this? Is there any document to understand whether we will double this or that sector in 2023, because we want this or that opportunity to be created for us in 2030?”
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The President of the Central Bank, Martin Galstyan, answered that the existing capital flows, they still don’t understand whether they will stay in Armenia or whether people will go and take them with them. “The best policy is when the state is able to tax capital flows, especially in the short term. In 2003-2007, we had a sharp devaluation of the national currency in Armenia, but we had an inflow of these funds into the non-exportable sector, which, in our opinion, was not properly taxed. If taxes were normal at that time, we would have buffers, we would have a different development.”
As for having a document related to the future of the economy, the Central Bank President answered, “German bankers are trying to understand which branch of the economy should be encouraged, they are taking actions, then life shows that even they cannot understand which branch of the economy will be in the future. It is the business owners’ job, and the state’s job is to ensure a competitive environment and infrastructure.”
Hripsime JEBEJYAN
