Armenia's Economy Continues to be a Victim of a Consumption-Based Model: Ananyan

The political autumn seems to be heating up. In Armenia, almost every day a political party holds a congress or a "rally," new formations are being announced, and movements are attempting to become parties. Everyone is talking about the economy. One promises to lower a certain tax, another to increase benefits, while a third aims to "revitalize" agriculture or industry through small programs.

This was stated by former head of the State Revenue Committee Davit Ananyan.

“However, the reality is much more complex. When discussing the economy, we should not resort to opportunistic micro-promises but rather focus on macro philosophies, conceptual approaches, and strategies for deep reforms.

If the state lacks a vision for a new economic model, if there are no systematic solutions regarding export-oriented economy, productivity, new tax-budgetary culture, or institutional trust, then every 'mini program' is doomed to remain just a slogan. Opportunistic promises not only devalue economic discourse but also create baseless public expectations that inevitably turn into disappointment.

The real responsibility of political power is not to please the ear but to plan change at the system level. It is essential first to perform systemic diagnostics on a macro level, and then present the public with short-term, medium-term, and long-term strategic visions.

Armenia’s economy continues to be a victim of a consumption-based model. The main sources of growth are imports and remittances from abroad, not the increase in domestic productivity. This is a short-term shine but a profound vulnerability due to dependence on shocks from external markets, a burden of debt obligations, and uncertainty about the future.

Without the development of industry and the implementation of a concept for an export-oriented economy, without the revival of industrial and technological potential, real and qualitative progress remains unattainable.

The current tax-budgetary policy does not carry the breath of a macroeconomic strategy but resembles an accounting tool for tracking income and expenditures. However, the budget should not just be a ledger but rather the engine of the economy that creates jobs, stimulates industry, and strengthens scientific and technological potential. The absence of these targets makes the tax-budgetary policy not a strategy but mere technique.

The promises of those in power remain patches at a micro level. Small programs implemented in a few villages or targeting one or two sectors cannot change the logic of the entire economy. They are temporary temptations aimed at ensuring short-term public satisfaction. But as long as there is no developed concept for the big picture, those promises are doomed to fade quickly.

Dear colleagues, if we want to achieve deep reforms, we must discuss not minor promises but systemic solutions: a new tax system, an economic model aimed at exports and industry under the concept of a small economy, spatially balanced development concepts, and the formation of logistical and institutional capacities. All this must be within the context of sincere efforts to restore public trust. This is the narrative that raises societal expectations while simultaneously forming confidence around a national program,” he wrote.