PARIS (Armenpress)–A two-day forum–organized by the World Bank (WB) to review the Armenian government’s economic policy and discuss more aid and loans to Yerevan–opened in Paris on Monday. Representatives of Western donor-states and leading international finance institutions met with an Armenian government delegation led by Prime Minister Andranik Markarian.
The meeting was opened by World Bank Regional Director Judy O’Connor who presented the overall economic situation in Armenia and the government’s steps in reforming the economy over the past two years.
Prime Minister Andranik Markarian briefed the donors on Armenia’s poverty reduction strategy and thanked the World Bank for initiating the forum. He expressed hope that the two-day discussions would allow the donors to learn more about developmen’s related to the Armenian economy and the social conditions of the population. Markarian said he hoped the forum would also provide opportunities for the expansion of cooperation between Armenia and the international community.
The prime minister presented in detail the difficulties related to economic reforms–obstacles on the road to liberalization and the government’s efforts to overcome these difficulties.
It was particularly noted that the fall in real wages and economic activity–the rise in unemployment and the growth of the shadow economy have led to the complete collapse of the former securities and insurance systems. Markarian said the government is now facing serious difficulties in paying pensions to around 560,000 retired citizens.
According to the Armenian government–a reduction of poverty can be achieved by securing comprehensive and sustained economic growth. "The link between economic development and poverty reduction is of a two-way nature and poverty cannot be eased without economic growth–but on the other hand–economic development cannot be sustained under the conditions of society’s deepening poverty," the prime minister said.
Another major factor for the reduction of poverty–according to Markarian–is the introduction of an efficient governing system. "The economic policy aimed at the reduction of poverty volumes means not only the continuation of economic and structural reforms aimed at improving the social condition of the population–but also undertaking a set of measures directed at the improvement of indices defining the level of poverty along with implementation of reforms," noted the prime minister.
The creation of new jobs–securing a favorable business climate–the promotion of new investmen’s and support to businesses are the priorities outlined in the government’s plans to solve the problem of poverty.
Armenia’s accession to the World Trade Organization–expected later this year is regarded by the government as a necessary step in securing sustained economic growth.
Markarian also referred to the results of the Armenia Investors Conference held in New York in May. The government is realizing the need to implement simplified procedures for registration and license granting–full application of bankruptcy mechanisms–transparent processes for privatizing state-owned companies–which according to Markarian will help make the operation of companies more efficient.
"From the point of view of establishing a favorable investment and competition climate–the government deems as a priority securing free economic competition for support of medium and small enterprises and defining efficient mechanisms for struggling against monopolies in the market," the prime minister said.
In terms of implemented tax reforms–according to Markarian–Armenia can now be placed among countries with favorable tax fields–which is very important in attracting investmen’s. A recently set up governmental commission for supporting economic competition has been tasked with dealing with this issue. The main goal of the commission is to prevent the emergence of artificially created economic monopolies.
The prime minister also emphasized agricultural developmen’s which are crucial in securing sustained economic growth. Proceeding from the necessity to overcome obstacles in this sector–the government will be consistent in raising the efficiency of irrigation systems–expanding possibilities for credit lending to farmers and making fertilizers and other facilities more accessible," he said. The implementation of World Bank and International Fund for Agriculture Development funded programs will have a significant effect in this sector–said Markarian.
The government has drafted a food security program which is being realized with the support of the European Commission. Markarian also emphasized the need for improving the state management system–which requires a transparent and clear-cut legislative field–a stable legal system–highly paid and skilled judges and civil servicemen.
The prime minister also presented the government’s activity in this direction–stressing its struggle against corruption. Markarian mentioned the parliament’s passing of a draft law on the declaration of income by senior government officials. The government will also try to push through the parliament a law on civil service by the end of the year.
The prime minister also referred to the government’s policy in the areas of health–education and social security–closely connected with poverty reduction and sustainable human development. "The government will secure installment of efficient mechanisms for protection from unemployment and will focus on helping the unemployed find jobs," he said.
In his report–the Armenian prime minister also dwelt upon programs to be realized in Armenia’s earthquake zone in 2001-2003. His report was followed by an International Monetary Fund analyses and EU commen’s on Armenia’s macroeconomic situation–volumes of state debt and funding.
After a short break–Vahram Nersisiants – chief advisor on economic issues to President Kocharian–presented the chief macroeconomic indices of the Armenian economy.
This was followed by remarks made by World Bank–USAID and Japanese government officials on speeding up investmen’s and securing comprehensive economic growth.
Deputy Parliament Speaker Tigran Torosian’s report highlighted the government’s efforts to improve the governing system and its encroachment on corruption. He said an extensive set of anti-corruption measures were being implemented in the legal and legislative areas. Raising the efficiency of state spending–according to Torosian–is one of the major steps to reduce corruption volumes.
Armenian Health Minister Ararat Mkrtchian–spoke about issues related to human development. He spoke in detail about the education–social security and health sectors in Armenia and presented the government’s approaches on how to overcome problems in these sectors.
According to him–some of the main problems in the education sector are restricted financing–imperfect legislation–inefficient management–and lack of technology. Only 10 percent of the state budget is earmarked for education. Lack of finance in the health and social security sectors is also a major issue.
The plenary session will continue working on Wednesday. Armenian Finance and Economy Minister Vartan Khachatrian–as well as representatives of donor organizations–are expected to release reports. The meeting will conclude with a joint news conference held by World Bank and Armenian government representatives.