Armenian economy 'must rely on developed sectors' to secure future progress - opinion

The domestic economy needs to rely on its relatively accomplished and developed sectors to pave way to a future progress, Karen Adonts, a Yerevan-based economist, said today, stressing the importance of policy revisions.

"We have several sectors today, such as agriculture, reprocessing industries and copper concentrate manufacturing, whose main market is Russia. Our policies have to first of all focus on expanding the branch structure to make the economy more competitive and prospective. Additionally, we need to expand the geography of markets to increase the economy's functionality also on other markets. The main policies have to deal with market enlargement, but to do that we need appropriate policies to boost investments," he said in an interview with Tert.am.

The economist did not attribute the shortage of investments (reflected in the official reports by the Statistical Committee) to the low investment profitability in the manufacturing sector.

"Manufacturing is not profitable in Armenia because we import the raw, pay a value-added tax - plus a customs duty - and then, additionally, face technology-related problems. That is to say, the zero investments in the manufacturing sector are due to the fact that there are practically no conditions. The state does not conceive of the profitability in separate branches of the economy to be able to later pursue the right tax and credit policies. Or what is the advantage of imports over our domestic product? Once we spot the weak sides, we will neutralize the weak competition line which our manufacturers are having today. But because we never handle such tasks, we do not attract investments in our economy," he added.

According to the expert, the state at times attracts foreign credits to boost the development sector in an effort to promote an "artificial economic growth".

"As I look upon the authorities' steps towards developing the economy, I do not see a real step in essence. The state must have a concept of its own and a program as to how to develop the economy. But I do not see anything of the kind for now," the economist said.