President Serzh Sarkisian predicted on Friday that Armenia will fully emerge from recession next year, saying that his government has “stabilized” the economic situation and learned the right lessons from the global financial crisis.
“It is encouraging that in difficult conditions, we managed to stabilize the situation and ensure some economic growth,” Sarkisian told the country’s leading businesspeople at a year-end reception.
“We all are all well conscious that the coming year will be one of hard work,” he said. “It must be a year of full recovery, deepening economic diversification trends and new and creative steps taken in new realities.”
The Armenian economy was one of the hardest hit by the global recession, contracting by over 14 percent last year. According to official statistics, its growth resumed this year, standing at 2.6 percent year on year in January-November. The growth rate would have been faster without a sharp fall in agricultural production and a continuing crisis in construction.
The construction sector was a driving force behind double-digit growth rates posted by Armenian governments before the crisis. Western and local economists say the Armenian economy had grown too dependent on the sector and needs to diversify its output if it is to avoid more such shocks in the future. That, they say, is in turn contingent on the government improving the country’s problematic business environment.
Sarkisian acknowledged the need for “serious reforms” and insisted at the same time that his administration has already drawn necessary conclusions. “Thanks to the lessons drawn from the crisis, we will avoid the kind of challenges that brought down much more prosperous and wealthier economies,” he said.
The president pledged to crack down on government corruption and de facto economic monopolies controlled by government-linked businessmen in a December 19 speech before senior members of his Republican Party of Armenia (HHK).
His prime minister, Tigran Sarkisian (no relation), similarly told parliament earlier this month that stronger rule of law, improved tax administration and a tougher fight against “the shadow economy” will be top government priorities in 2011.
Opposition politicians and other government critics dismiss such promises as gimmicks. They say sweeping reforms are extremely unlikely because they would undermine President Sarkisian’s hold on power.