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Prime Minister Tigran Sarkisian accused on Thursday critics of seeking to discredit his government after they condemned his remark that they key to Armenia’s long-term economic development is knowledge-based services, rather than manufacturing.


He insisted that he never downplayed the significance of industry for the country’s steady economic growth.

In an interview with leading Armenian TV stations aired at the weekend, Sarkisian said Armenia should become “a service-producing country” like the United States with open markets and few privileges enjoyed by domestic companies.

“Manufacturing has moved from the United States to China because it’s cheaper to manufacture goods in China than in the United States,” he said. “The United States is a country producing services, and it supplies the whole world with its innovative services, which are based on knowledge-based economics. In that regard, the U.S. economy is the most dynamically developing in the world.”

“I think that in the long term, Armenia should be positioned in the same way because we can’t compete with China or India in manufacturing … It will always be more beneficial to manufacture TV sets or computers in China and India than in Armenia,” the prime minister added in his televised remarks.

The remarks raised eyebrows among opposition and even some pro-government politicians, who believe that the country’s future lies in export-oriented manufacturing. They say a rapid rise in industrial production is the only way of creating many jobs and easing Armenia’s massive trade deficit.

A parliament deputy from the ruling Republican Party of Armenia (HHK) challenged Sarkisian to elaborate on his comments during the government’s question-and-answer session in parliament on Wednesday.

Sarkisian made a special statement on the issue at the end of a weekly cabinet meeting the next day. He denounced “provocative claims that the prime minister said we don’t need domestic manufacturing.”

“That’s nonsense, a disrespectful attitude towards our fellow citizens who have watched that interview with their own eyes,” Sarkisian said. “Clearly, this is a form of political struggle, which is aimed at discrediting the authorities,” he claimed.

According to official statistics, industrial output accounted for 23.5 percent of Armenia’s Gross Domestic Product in 2010. Services other than retail trade generated another 22.5 percent of GDP.

The Armenian premier also urged government members on Thursday to “expose shortcomings, failings and problems existing in our areas of responsibility.” “Such a work style will certainly create a lot of inconvenience for our opponents because exposing shortcomings … requires some intellectual, analytical work,” he said. “And as we can see, our opponents don’t have that capacity.”
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