Armenia faced serious socio-economic problems due to COVID-19 and Azerbaijan’s aggression against Artsakh, which could not be effectively addressed through traditional means. With this in mind, we embraced the idea of developing the Government’s Economic Response Program and putting it on a practical footing. The Program seeks to achieve at least two priority goals specified in the roadmap published by the Prime Minister of the Republic of Armenia on November 18, 2020 (Overcoming COVID-19 and Eliminating Its Consequences; Restoring the Economic Activity Environment).
The economic program can be described as ambitious, but I think it quite feasible, considering that we have taken a specific period of time until the end of the first half of 2021. The government has set two primary goals: to overcome the shocks caused by the global pandemic and the war, and then to restore and get the economy back to the track of sustainable development. Below, I will weigh in on 4 of the 38 activities specified in the program.
Growing and processing high value-added agricultural crops
In public-scientific discussions, it is often said that the use of agricultural opportunities in Armenia is low, given that a significant part of arable land, up to 40-45%, is not actually cultivated. Of course, we should state this shortcoming, but it is even more important to have a solution to it.
One such solution is the cultivation of new types of crops, in particular, industrial hemp, which is not only preferable and cheap in terms of price, but also a source of high quality raw materials. It can be used in the textile industry, in the production of paper and construction materials, in the export of crop seeds and oil.
Moreover, here we have the opportunity to widely use the experience of other countries, including Russia, the United States, France and China in terms of diversifying our economy and creating attractiveness for investors. The growing demand for manufactured cannabis in the world is undeniable. Its sales amounted to USD 2.76 billion in 2016, USD 5.76 billion – in 2020. The sales are expected to reach USD 15.26 billion in 2027.
Mastering this sphere of the world economy will be beneficial for Armenia’s economy. Of course, taking into account the unique nature of the field, we will introduce strict, clear regulations, again using the international experience.
Introducing an interim emergency tool in public procurement procedures
The purpose of this activity is to promote the participation of local companies in public procurements. Through such a tool in the public procurement process, the government will subsidize local companies that will use local labor and production resources to provide their services. This will result in increased interest of local companies in public procurements and will make the process more competitive.
Moreover, businesses will receive actual support from the government through subsidies. In fact, with this measure the government will also contribute to the growth of local production and the activation of the local labor market. This activity shall target the local labor and commodity resources and will seek to support the local producer.
Continuing and transforming the COVID-19 response program
Armenia and the world, in general, had to face the COVID-19-triggered global pandemic throughout 2020, which caused major socio-economic shocks in many countries. The Armenian government has adopted 25 measures to counter its adverse impact, some of which need to be re-launched in line with today’s realities.
Initially, the goal of these measures was to respond to the emerging challenges as quickly as possible, and, in fact, to keep the situation under control. Now, however, as the pandemic’s economic impact has waned, these measures are taking on new meaning and content. Therefore, 4 measures will continue to be implemented after some reconsideration. According to preliminary estimates, we will make additional allocations of more than 10 billion drams.
The scope of beneficiaries will be expanded: about 8000 entities in the agricultural sector, some 500 economic entities, about 100 small and medium enterprises will be supported in different directions. In other words, the measures to neutralize the epidemic are being transformed in accordance with the current requirements, aiming at the sustainable recovery and development of certain sectors of the economy.
Launch of large-scale urban development projects in Yerevan and Armenia’s communities
One of the key points of the economic response program is the launch of large-scale urban development projects. At the same time, the government shows its will and readiness to launch strategic large-scale projects. This is a message in terms of stabilizing the business environment in our country, which will find a response from foreign investors, opening up promising opportunities.
We will re-launch the construction of District 33 in Yerevan (Firdusi) (activities will start in at least 3 lots) and the investment program for the development of Kond District, we will launch the investment program of the building at 22 Saryan Street, we will continue to implement the Old Yerevan project.
Along with the improvement of the urban environment in Yerevan, this activity gives special importance to the idea of establishing scientific, technical and cultural-sports centers in Armenia’s communities, which has a real potential to develop and organize social life in the regions. The scale of the event itself suggests that it may trigger investment growth, generate jobs and develop tourism.
In conclusion, I would like to note that with this anti-crisis program, the Government is trying to stabilize the economic situation in our country with a complex of targeted measures, to revive the public’s expectations and prepare a solid groundwork for continued development. The effectiveness of these steps cannot be overestimated as they will lead the way to building a powerful statehood.
The next six months should be a period of tireless work, fulfillment of public obligations, where everyone has individual responsibility, but no one has the right to fail.