Upcoming Government Actions for the Next 6 Months: Tigran Avinyan

Armenia's Deputy Prime Minister Tigran Avinyan has written an article for Banks.am titled “On the Economic Response Program and Government Actions for the Next 6 Months,” which we present below.

Due to the coronavirus pandemic and the war unleashed by Azerbaijan against Artsakh, Armenia faced serious socio-economic challenges, which could not be effectively addressed using traditional means. With this understanding, we embraced the idea of creating and launching the government's “Economic Response Program.” This implementation corresponds to at least two points of the roadmap presented by the Prime Minister on November 18, 2020: “Overcoming the Coronavirus Pandemic and its Consequences” and “Restoring the Environment for Economic Activity.”

This economic program can certainly be considered ambitious, but I believe it is entirely feasible, given that we have set a specific timeframe until the end of the first half of 2021. Here, the government is setting dual goals: to overcome the shocks caused by the coronavirus pandemic and the war, and then to restore and return the economy to the path of sustainable development.

Below, I will try to highlight 4 of the 38 measures that form the core of the program and, if implemented, will condition its success:

Start of Cultivating and Processing New High-Added-Value Agricultural Crops
In public-scientific discussions, there are often assessments mentioning that the usage of agricultural opportunities in Armenia is at a low level, considering that a significant portion of the arable land—up to 40-45%—is essentially not being cultivated. Acknowledging this deficiency is important; however, having a solution is even more crucial. One such solution is the cultivation of new types of crops, particularly industrial hemp, which is not only economically favorable and cheap but also a source of high-quality raw materials. It can be used in the textile industry, paper and construction material production, as well as in the export of crop seeds and oil.

Moreover, here we have the opportunity to widely leverage global experiences, including those of Russia, the USA, France, and China, in terms of ensuring diversification in our economy and creating attractiveness for investors. The undeniable increase in global demand for industrial hemp is evident: global sales reached $2.76 billion in 2016 and are projected to hit $5.76 billion by 2020, with expectations of reaching $15.26 billion by 2027. Entering this sector of the global economy is of significant importance for Armenia. Naturally, considering the unique nature of the sector, we will implement stringent and clear regulations, again utilizing international experience.

Introduction of a Temporary Anti-Crisis Tool in State Procurement Procedures
The purpose of this measure is to stimulate the participation of local companies in state procurement. Through such a tool in the state procurement process, the government will subsidize local companies that use local labor and production resources in their service delivery. This will not only encourage local companies to participate in state procurement but also render the process more competitive. Furthermore, through subsidies, businesses will receive tangible support from the government. Essentially, this measure will also promote the growth of local production volumes and invigorate the local labor market; it can be said that the target group of this measure is local labor and material resources, with the aim of supporting local producers.

Continuation and Transformation of Measures to Neutralize the Economic Consequences of the Coronavirus Pandemic
In 2020, like the rest of the world, Armenia had to face the challenges posed by the coronavirus pandemic, which resulted in significant socio-economic shocks in various countries. Since the start of the pandemic, the Armenian government has adopted 25 measures to neutralize its consequences, some of which now need continuation, adaptation to current conditions, and reactivation. Initially, the purpose of these measures was to provide situational solutions and a rapid response to keep the situation under control. Now, however, as the economic shock caused by the pandemic has subsided, these measures gain new meaning and content. Thus, previously implemented 4 measures will continue after a review. A preliminary estimate suggests that we will carry out an additional allocation of more than 10 billion drams. The scope of beneficiaries of these measures will also be expanded; according to early assessments, around 8,000 beneficiaries in the agricultural sector, about 500 businesses, and around 100 small and medium-sized enterprises will receive support from various directions. In other words, the measures to neutralize the pandemic's consequences are being transformed to meet current demands, aiming to ensure sustainable recovery and development in specific sectors of the economy.

Launch of Major Urban Construction Projects in Yerevan and Armenian Communities
A key aspect of the economic rapid response program is the start of major urban construction projects. Through this initiative, the government simultaneously demonstrates its will and readiness to commence long-term and significant projects. This also signals the stabilization of the business environment in our country, which will resonate with foreign investors, opening up promising opportunities. Thus, we will be activating construction in Yerevan's 33rd neighborhood (Firdusi) starting at least 3 lots and launching investment programs for the development of the “Kond” neighborhood, as well as initiating the investment program for the building at 22 Saryan Street, ensuring effective continuation of the “Old Yerevan” project. Along with improving the urban environment in Yerevan, this measure also places particular importance on the idea of establishing scientific, technological, and cultural-sports centers in Armenian communities, which has real potential to shape and organize social life in the regions. The scale of this measure itself suggests that, if successfully implemented, it will lead to a chain of developments in investment growth, job creation, and the advancement of tourism.

In conclusion, I would like to emphasize that the government, through this anti-crisis program and complex measures, is attempting to stabilize our country's economic situation, restore disrupted expectations, and prepare the ground for moving forward. The quality and effectiveness of implementing these actions cannot be overestimated, as they will condition how we stand up and build a resilient and strong state. The upcoming six months must represent a phase of intensive effort, continuous work, and fulfilling the obligations assumed before the public, where each individual holds personal responsibility, but where no one has the right to fail.