President Serzh Sarkisian told his government on Friday to adopt a more hands-on approach to economic problems, saying that is essential for speeding up GDP growth and easing hardship in Armenia.
Speaking at an extraordinary meeting with Prime Minister Tigran Sarkisian and his ministers dealing with the economy, he demanded greater government support for the domestic manufacturing, construction and agriculture sectors. Sarkisian also expressed serious concern about increased inflation which he said has “made life in our country disproportionately expensive.”
“We have gone through a difficult winter, difficult in the primarily socioeconomic sense,” the president said in televised remarks.
“Starting from May-June, our people must already feel an alleviation of their socioeconomic hardships, must see that the exceedingly high prices of food and especially agricultural products are falling to a level familiar to their eyes,” he said.
Sarkisian went on to stress the need for ensuring faster economic growth in Armenia this year.
The Armenian economy expanded by 2.6 percent last year after contracting by over 14 percent in 2009. The growth was primarily driven by an upswing in industry and the mining sector in particular.
Sarkisian downplayed a 9 percent rise in industrial production registered in 2010, arguing that it came from a “low base.” “We must have very serious indicators this year,” he told Economy Minister Tigran Davtian. “This is your main objective.”
To that end, continued Sarkisian, Davtian and the Armenian Ministry of Economy “must always stand by the entrepreneur’s side.” “Your ministry and you personally are the business world’s representative to the government,” he said.
The authorities in Yerevan and multilateral lending institutions expect GDP growth to accelerate to 4.5 percent in 2011. They have forecast renewed growth in agriculture, which was hit very hard by bad weather in 2 010.
Sarkisian said the Ministry of Agriculture and the government as a whole must be “very active” in fostering the sector’s recovery. “Each of us -- including the prime minister, the deputy prime minister, all ministers -- must periodically visit villages,” he said. “I myself will go to villages, deal with agricultural problems and keep some projects under my control.”
“For me, it is very strange that that villagers have land but are poor. What are the reasons that force people not to cultivate their land?” he asked. He then urged the Central Bank to “actively” encourage commercial bank lending to farmers.
Sarkisian further urged the government to help ensure “serious growth” in construction. He said private developers must be fully informed about the simplification of construction licensing rules approved by the government in the last two years.
The Armenian construction industry, which bore the brunt of the 2009 economic downturn, shrank further in 2010.