One June 16, the NA Standing Committee on Financial-Credit, Budgetary and Economic Affairs initiated parliamentary hearings on the theme “Armenia and the International Monetary Fund: Cooperation for Development.” Representatives of legislative and executive bodies and of the Central Bank, IMF responsible persons, the US Ambassador to Armenia John Evans, interested people from NGOs and business world were present at the hearings. Vahram Baghdassaryan, the Deputy Chair of the Standing Committee on Financial-Credit, Budgetary and Economic Affairs who was conducting the hearings noted that Armenia, which has affiliated with the IMF cooperates closely with this financial establishment since 1992 and in this period a number of programs have been implemented. 

NA Speaker Tigran Torosyan welcomed the participants of the parliamentary hearings. He emphasized the usefulness of making such debates periodic and the willingness of the Parliament to do so. The NA Speaker considers such debates important as they give the possibility to correct our work with this authoritative international organization and make the NA-IMF cooperation efficient. Regarding the cooperation of the previous years the NA Speaker noted with satisfaction that it has been an important element in the process of making adjustments in the economic policy and arriving at today’s indicators. During the previous years significant changes have been made in the economic system and the role of the international financial organizations has been great. This role is not only in the support with credits, but also in pointing out the weaknesses of the impartial evaluation policy. Tigran Torosyan noted that the cooperation is also important in terms of using the experience obtained by IMF in the countries of the post-Soviet transformation.The leader of the Parliament considers the actual situation much improved in comparison with that of years before. “We have indicators of which we can be proud,” he notes and presents the rates of growth of the GDP, of the export and import, the tendency of poverty reduction. In parallel Tigran Torosyan noted that there are still unsolved problems for the elimination of which the Government is having consultations with the fund. Responding to the opinions that the international financial organizations press all the countries, which are in the transitional phase including Armenia Tigran Torosyan emphasized that the relations with IMF have not been mutually obligatory but voluntary and useful. The NA Speaker assures that the IMF has only presented suggestions and our country has always been free to decide what to do. The NA Speaker noticed that sometimes own mistakes are easily explained by the pressure of an international structure. Since 2000 the IMF pays more attention to the political element of the reforms, previously economic reforms and indicators were more highlighted. The NA Speaker wished to continue the cooperation especially in this scope considering that Armenia is on the way of political and public reforms. At the end of the speech The NA speaker expressed his conviction that this measure will have success, and that it is important to make express all the opinions including disagreements if necessary. He considers it important that the cooperation be sincere and directed to the development of Armenia. The NA Speaker is sure that the cooperation with the IMF is always beneficial for Armenia.Gagik Melikyan, member of the Standing Committee on Financial-Credit, Budgetary and Economic Affairs also had a speech. According to the deputy, the GDP level of 1992 formed only the 44 percent of the same indicator of 1989 and the inflation used to increase rapidly. The deputy evaluates Armenia’s cooperation of these years with the IMF as an efficient and close one. Mr. Melikyan argues that with joint work programs have been realized in the economic sphere, which have contributed to the formation of a macroeconomic environment and creation of a market based economy.As a result of such measures it has become possible to reach a high level of economic growth and last year the highest indicator of the Soviet years has been exceeded.

Mr. Melikyan also touched upon the reforms of the tax and customs legislation carried out with the joint efforts of the IMF. Particularly measures have been taken for the guaranteeing of equal economic conditions, simplification of tax laws, defense of the taxpayers’ rights and the perfection of tax control mechanisms.

Deputy Director of the IMF Department of the Middle East and Central Asia Julian Berengaut presented the work done in Armenia and the future programs. Since 1994 the fund has granted a financial help worth 350 million dollars ad mainly with privileged terms. Measures for poverty reduction and liberalization of trade regimes have been included in the programs. Technical support and consultation also has been given in the spheres of tax and customs administration, in making monetary and exchange transactions in the bank and financial spheres. Mr. Berengaut noted that the economic policy of the Armenian government is being carried out successfully and in comparison with CIS countries the indicators in our country are higher. In parallel with the positive tendencies the IMF has also recorded problems. The representative of the fund mentioned in his speech that the level of poverty is still high, the rate of economic growth has not fully influenced all the citizens, the volume of shadow economy and corruption is still large. The representative of the fund suggests making fiscal reforms in order to increase the incomes and direct them to the poverty reduction and involving more the financial sector in the economy. Mr. Berengaut thinks that the 15 years old cooperation with Armenia is efficient.

The questions addressed to the IMF representative were diverse. If it is decided to keep the exchange rate without fluctuations, than it will be impossible to predict and provide the inflation rate. He also noticed that in Armenia the value of the national currency has not increased, simply the dollar has greatly depreciated. The NA deputy Tatul Manaseryan tried to precise the opinion of the reporter on shadow economy and corruption in Armenia. The latter responded that the share of the shadow economy reaches 50-60 per cent, but there is still need to check if it is the result of hiding taxes or defending the private business. There was also a dialogue about the necessity of raising the confidence towards the Central Bank in the public. Vazgen Safaryan, president of the Commodity Producers’ Union addressed a question about this. The IMF representative responded that there is a slow but positive move in the confidence towards banks. Responding to the question of Tsolvard Grigoryan, the president of the Merchants’ Union about monitoring after changing the legislation Mr. Berengaut said that they always study the economic ways with means of monitoring. He also informed that the IMF does not offer the government texts of laws but gives expert and professional support. In the opinion of Mrs. Grigoryan some profit of the economic reforms and some suffer. Mr. Berengaut mentioned they are against tax privileges and they find that when taxing everybody equally it will be possible to reduce the tax rates. Hakob Sanasaryan, the president of the Greens’ Union expressed his concern that the poverty reduction may be risked in several years, because today the amounts of money given for that purpose come from the fast sale of minerals. In response to the question about the credibility of the inflation indicator the reporter noted that it is consonant with all the economic indicators and that he sees that the situation in Armenia improves.

The Deputy Chair of the Committee also touched upon taxing with the added value tax some types of goods, especially raw materials when importing them.

Suren Karayan, the Deputy Minister of the Ministry of Finance and Economy and Vache Gabrielyan, member of the Council of the Central Bank talked about the cooperation between the Government, the Central Bank and the fund. They presented the spheres that have been included in the joint programs.

The parliamentary hearings were summarized with speeches. Grigor Ghonjeyan, member of the United Labour Party/ULP faction suggests formalizing the solutions of the raised questions, this time in a legislative way. Tatul Manaseryan, member of Ardarutiun/Justice faction noticed in his speech that first of all we have to define the directions and the supremacies of the economy. According to the calculations of the deputy, the share of the shadow economy in our country is not 50-60 but 80 percent. Hrant Khachatryan, another deputy of the faction although thanked the representatives of the IMF for the work done in Armenia but noted that the national government is not independent in its decisions.

At the end of debates Julian Berengaut said he is proud that they can be useful to Armenia in creating modern economy.