Azernews.Az

By Nazrin Gadimova

The level of economic activity in Armenia decreased by 49.2 percent in January 2016 compared to December 2015, the country’s National Statistical Service reported.

Unstable political situation in Armenia, as well as corruption and bureaucracy have negatively affected the economic performance of the country, local experts said, while commenting on the released data.

The country also recorded a fall in a number of other indicators during the specified period, including volume of industrial production (decreased by 28.7 percent) and country’s trade turnover (decreased by 58.6 percent). Moreover, the volume of generated electricity decreased by 6.9 percent since December 2015, while average monthly nominal wages decreased by 19.5 percent in January compared to the previous month.

Geographical isolation of the country, a narrow export base, and extensive monopolies in important business sectors made Armenia’s economy particularly vulnerable to the global economic recession and the economic downturn Russia given its heavily dependence on Russian commercial and political support.

Head of the parliamentary fraction Armenian National Congress, Levon Zurabyan believes that this situation is due to the viciousness prevailing in Armenia's political and economic system.

"The state policy is now aimed primarily at supporting monopolists, oligarchs, who are engaged in the import of consumer goods. Thus the actual manufacturers, exporters are at a great disadvantage,” Zurabyan told Vestnik Kavkaza.

He stressed that such a system was able to exist for a long time due to the high level of transfers from other countries, primarily from Russia, since Armenian entrepreneurial class was forced to leave the country and move to France, the United States, and mostly to Russia.

Noting that the transferred funds form the purchasing power of the population, Zurabyan added that recently real amount of transfers sharply fell due to the weakening of the ruble.

Such a model, which provides the political and economic elite of the country with enormous profits from the monopoly of imports of goods, could not exist anymore and causes collapse of the economy, the Armenian official said

Meanwhile, country’s First Deputy Minister of Economy Garegin Melkonyan claims that small and medium businesses in the country showed the highest growth among the Eastern Partnership countries.

Commenting on this statement, Zurabyan said that in fact it is impossible to speak about any progress in the field of small and medium-sized businesses.

"Business activity decreases, small and medium businesses suffers most of all, both shops and factories are being closed, workplaces are being reduced. Basically it is precisely due to the small and medium business, while the monopolies manage to survive,” Zurabyan concluded.

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Nazrin Gadimova is AzerNews’ staff journalist, follow her on Twitter: @NazrinGadimova

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