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Pashinyan Launches Ambitious Economic Reform Roadmap

Despite rapid growth, Armenia’s economy remains puny compared to even the poorest EU countries. 19 February 2019

Armenian Prime Minister Nikol Pashinyan swept into power in Armenia last year over the wreckage of the old regime promising to install democratic, accountable rule.

 

His government has now unveiled a no less ambitious economic “revolution,” pledging to eliminate extreme poverty and grow the economy at a strong pace over the next five years.

 

Parliament approved the plan last week amid heated debate in the chamber and among the public and experts, JAM News reports.

 

Critics said the plan is short on specifics, although it does set some clear guideposts. Average economic growth is forecast to exceed 5 percent a year, and exports are planned to contribute 43 to 45 percent of GDP by 2024.

 

Small businesses with annual turnover of less than 24 million drams ($50,000) will be exempt from tax.

 

The head of the Armenian Union of Employers, Gagik Makaryan, praised the program for stressing the need to modernize existing enterprises as well as start new ones, but found the state would be challenged to implement it.

 

“The prime minister, being a maximalist, may have tried as much as possible to include the need for good steps in the program, but his team is not ready for them,” JAM News quotes him as saying.

 

Opposition parties were skeptical of the program’s claims.

 

“I don’t [deny that] there are two or three provisions through which people will feel positive changes, but this is not a program of economic revolution,” said wealthy entrepreneur Gagik Tsarukyan (pictured), head of the Prosperous Armenia party.

 

A member of the opposition Bright Armenia party, Gevorg Gorgisyan, said the roadmap was “abstract” and lacked specific goals.

 

The economy’s performance last year was “satisfactory, even good” given the political turmoil, Aram Safaryan, the head of the Integration and Development NGO, told reporters Saturday.

 

The group estimates that GDP grew last year by between 5.6 and 6 percent. Exports rose by 20 percent and imports from Armenia’s largest trading partner Russia rose by 10 percent, he said, Panorama.am reports.

 

 

  • The political earthquake of 2018 did not appear to reverse the economic surge of the previous year, when GDP grew at the highest rate in a decade, according to the World Bank.

 

  • However, poverty remains stubbornly high, with 43 percent of the population living on less than $5.50 a day when adjusted for purchasing power. The bank recently bumped the country from the lower-middle income category to upper-middle income, defined as a per capita adjusted income of between $3,896 and $12,055.

 

Compiled by Ky Krauthamer
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