The issue is not so much the size, but the structure of foreign debt. Second President of Armenia Robert Kocharyan stated this during a meeting with economic journalists.
When asked what problems a foreign debt of up to $8 billion will lead to, the former president noted that along with the increase of the debt, the country’s rating also changes. “Each subsequent loan always implies an increase in interest. There comes a time when the country is at a risk zone. But issue is not so much the size, but the structure of foreign debt. When we [Armenia] are compared to European countries…sometimes it reaches absurdity; they compare [us] to Germany,” Kocharyan said.
According to him, in order to get a clear picture of the situation, it is necessary to take the average percentage of service and calculate in how many years corrections can be made. “But there is a level of debt when the risk curve starts to rise sharply,” said the former president.
And to the question whether he thinks that it is not necessary to take a loan taking into account that a decrease in foreign debt was registered during his tenure, Kocharyan agreed that the decrease was about 13%, and he is against taking a large amount of debt. He also noted that during his presidency, they took loans, for example, from the IMF and Japan. “However, apart from the fact that the debt was small at that time, its structure was incomparably small. It must be understood that the economy is developing in double digits. It was possible to take a loan to achieve not 12-13%, but 20% development, but we did not do that,” Robert Kocharyan said.