Now that Moody's has downgraded Armenia's sovereign rating, its big foreign debt will get even bigger, former President of Armenia Robert Kocharyan said in an interview to 2rd.am.
He is pessimistic about the future of the Armenian economy. "Unless the economic policy is revised, it is not clear what can help us to boost economic growth in our country. The economy of the Eurasian Economic Union will decline in the mid-term future, so, we will not be able to get any substantial place there. Weak RUR will affect our trade with Russia. There will hardly be any serious investments from that country as the Russians have their own financial problems. Our membership to the Eurasian Economic Union has made us less attractive for the West.
It is not clear what will happen to our trade with Iran. The global nonferrous metal prices are expected to fall. The Central Bank's last decision to toughen lending terms will lead to higher loan rates. With such macroeconomics and so many people leaving the country, we will hardly be able to build anything. The economic is getting increasingly monopolized. The investment activity is on the decline. The political system is also monopolized, so, there will hardly be any progress in the internal political situation," Kocharyan said.
His solution is drastic changes. "Today the authorities and the people have quite contrasting viewpoints of what is going on in their country. The latter either actually believe that everything is going well or have just convinced themselves that nothing can be changed. In either case, I see no ground for optimism," Kocharyan said.
What he suggests is to admit that Armenia has fundamental problems. "We need a dialogue between society and business on possible ways-out of this crisis. Public confidence is the main thing a government needs to be successful. Today we have almost no confidence in our government.
What we need today is drastic changes but not a constitutional reform. We have enough people in the government who know what they must do first. The key obstacle here is the conflict of the economic interest of our ruling elite with the long-term interests of our country," Kocharyan said.