Vahram Mirakyan, the founder-president of the “Mantashov” businessmen’s union, writes on his Facebook page.
“As a result of dram appreciation, the economic disaster has already started in Armenia.
Not exactly an attention-grabbing title, let me tell you why.
- Exporters suffer huge losses every day. Some of the exporters have stopped exporting, some have reduced it, the other part cannot stop, because the stoppage of financial flows will blow up the company, etc. Many new projects have been frozen.
- The exporters of the processing sector (cans, wines, cognac, dried fruits, etc.) already this year started to buy less from the farmer or to buy cheaper, because they have to try to lower the cost of the product. And the cheap procurement of processors is hitting about 1 million farmers who grow agricultural products. The standard of living of 1 million villagers will decrease, and in that situation, the complaints of those who cannot deliver grapes are still flowers. The more the bureaucrats, detached from reality, think in their slow mode, the processing companies will start to explode and go bankrupt one by one. The process has already started.
- Chain bankruptcy of processing companies will set back our agriculture for another 10-20 years. Plus, in recent years, the state has poured huge sums of money into the field of agricultural processing, these sums given by the state will be completely wasted. I already know manufacturers who are planning to close their factories in Armenia and move them to Russia, because their market is there, and they will only import here. As if our state does not like value creators, it only likes importers.
- In addition to the above, after the explosion of the Crimean bridge, Armenian exporters are in a disaster in Lars. Without force majeure, in normal mode, an Armenian truck arrives at the customs point of Lars in 20-30 days instead of 8 hours, because Armenian trucks are inspected in detail before being released. Because of this, a number of products are impossible to export due to deadlines, and the other part is no longer economically profitable.
As a result of the devaluation of the dollar, other sectors also suffer: inbound tourism, development, Armenia’s investment attractiveness is lost, etc. I won’t write about them, it will be too long. I am not writing about the IT sector either, they have written a lot on that topic.
A global catastrophe is looming. This positive movement formed at the expense of temporary re-export or refugees from Russia will turn into a disaster for us as a result of bad management.
What needs to be done urgently?
- In line with the drop in dollar exchange rate, give about 20% cashback to all exporters except re-exporters.
- Subsidize shipping costs to compensate for Lars’ problems.
- Subsidize and invest in air freight.
These are some simple investments that, if the state does not make, it will suffer much greater losses.
We have communicated a lot with the Ministry of Economy on this topic, they imagine the scale of the problems, but the solution should be jointly with the Ministry of Economy, Finance Ministries, SRC, Central Bank, BTA Ministry and the Financial Block of the Prime Minister’s Office, but the above-mentioned state systems are full of reality. the staunch and sworn conservative financiers who do their best not to initiate anything, because the initiator can also make a mistake.
And before that, the domestic disaster is already in the process.
P.S. Thanks for sharing the material, the more people understand the situation, the better.”