ARMENIA DEVOTED BUSINESS FORUM IN PARIS IN FULL SWING

[MosJan]

ARMENIA DEVOTED BUSINESS FORUM IN PARIS IN FULL SWING

PARIS, JULY 10, ARMENPRESS: An Armenia devoted business forum, organized and sponsored by World Bank started today in France's capital with participation of an Armenian government delegation, led by prime minister Andranik Margarian and representatives from around 30 leading international donor organizations.

The meeting was opened by a World Bank regional director Judy O' Connor who presented the overall economic situation in Armenia and the government's steps for reforming the economy which was followed by prime minister Margarian's report who presented a government-drafted program for poverty reduction.

Thanking the World Bank for initiating the forum and its participants for securing a wide representation, Armenian prime minister expressed hope that the two-day discussions would allow to reveal the real developments related to Armenian economy and social condition of the population and would also provide with opportunities to expand efficient cooperation with the international community.

The prime minister presented in detail the preconditions for passing to market relations, the difficulties accompanying the process of economic reforms, obstacles on the way to liberalization of the market and the government's efforts to overcome these difficulties.

It was particularly noted that the fall in real wages and economic activity, rise in the unemployment and growth of the shadow sector of economy have led to virtually complete collapse of the former security and insurance systems. The government is facing now serious difficulties in paying pensions to around 560,000 people of retired age.

According to the Armenian government, the main way for reducing the volumes of poverty is securing a comprehensive and sustained economic growth.

"The link between economic development and poverty reduction is of two-way and the poverty cannot be eased without economic growth, but on the other hand, the economic development cannot be sustained under the conditions of the society's deepening poverty," the prime minister underlined. Another major factor for reduction of poverty volumes, according to the Armenian prime minister, is introduction of an efficient governing system.

"The economic policy aiming at reduction of poverty volumes means not only continuation of economic and structural reforms aimed at improving the social condition of the population, but also undertaking a set of measures directed at improvement of indices defining the level of poverty along with implementation of reforms," noted the prime minister.

Creation of new jobs and securing, for that purpose, a favorable business climate, promotion of new investments and support to business are the priorities in the government's plans to solve the problem of poverty.

Armenia's accession to the World Trade Organization, expected later this year is regarded by the government, from the point of view of securing sustained economic growth, as a necessary step.

Armenian prime minister also referred to the results of the Armenian Investor Conference held last May in New York, to the simplified procedures for registration and licenses granting, full application of bankruptcy mechanisms, which, he said, "makes the operation of companies more efficient," transparent process of state-owned companies privatization.

"From the point of view of establishment of favorable investment and competition climate, the government deems as a priority securing free economic competition for support of medium and small enterprises and defining of efficient mechanism for struggling against monopoly in the market," the prime minister said.

In terms of implemented tax reforms, according to Margarian, Armenia can now be placed among countries with favorable tax field, which is also very decisive for promotion of investments. A recently set up governmental commission for supporting economic competition is called to assist in this issue. The main goal of the commission is to prevent emergence of artificially created economic monopolies.

The prime minister also placed emphasis on agriculture development for securing sustained economic growth.

"Application of specific approach in the agriculture sector is conditioned, in the first place, by the absence of alternative employment possibilities in rural settlements," Margarian said. Proceeding from the necessity to overcome the obstacles in this sector the government will be consistent in raising the efficiency of irrigation systems, expanding of possibilities for farmers to get credits and making more accessible fertilizers and other facilities ," he said.

The implementation of World Bank and International Fund for Agriculture Development funded programs will have a significant importance in this issue, said Margarian.

The government has drafted a food security program which is being realized with the support of the European Commission. Margarian also emphasized the need for improvement of state management system, which requires transparent and clearly-cut legislative field, a stable legal system, highly paid and skilled judges and civil servicemen.

The prime minister also presented the government's activity in this direction, putting the stress of struggling against corruption. Margarian also said that the parliament has passed in the first reading a draft law on declaration of Incomes by Senior Government Officials. The government will also try to push through the parliament the law on Civil Service by the end of the year.

The prime minister also referred to the government's policy in the areas of health, education and social security, closely connected with poverty reduction and sustainable human development. "The government will secure installment of efficient mechanisms for protection from unemployment and will focus its attention in helping the unemployed to find jobs," he said.

In his report Armenian prime minister also dwelt upon programs to be realized in Armenia's earthquake zone in 2001-2003.

Prime minister's report was followed by International Monetary Fund's analyses and EU comments on Armenia's macroeconomic situation, volumes of state debt and funding.

After a short break the chief advisor to Armenian president on economic issues Vahram Nersisiants presented the chief macroeconomic indices of Armenian economy. He also detailed about the results of Armenia Investor Conference held in New York.

This was followed by remarks of the World Bank, USAID and Japan's government on speeding up investments and securing comprehensive economic growth.

Deputy parliament speaker Tigran Torosian's report highlighted the government's efforts to improve the governing system and its encroachment on informal sector and corruption. He said an extensive set of anti-corruption measures were being implemented in the legal and legislative areas. Raising the efficiency of state spending, according to Torosian, is one of the major steps to reduce corruption volumes.

Armenian health minister Ararat Mkrtchian spoke about human development related issues and Armenian government's positions and approaches towards it. He spoke in detail about the situation in education, social security and health sectors and presented the government's approaches about how to overcome the problems in these sectors.

According to him, the main problems in education are the restricted financing, imperfect legislation, inefficient management, lack of technical basis and others. Only 10 percent of the state budget is earmarked for this sector.

Lack of finance in the area of social security is the major problem in the areas of health and social security, according to the minister.

Tomorrow July 11 the plenary session will continue its work. Armenian finance and economy minister Vartan Khachatrian as well as representatives of donor organizations are expected to come out with reports. The meeting will be concluded by a joint World Bank and Armenian government representatives' news conference.