Economic policy

Economic Policy Council meeting inspires optimism that we are on the right track

A two-day meeting of the Economic Policy Council chaired by Prime Minister Nikol Pashinyan continued at the Central Bank’s Dilijan Training and Research Center on August 7.

According to the press service of the Prime Minister of Armenia, the second day of the meeting addressed issues related to the sustainable development of the agricultural and food system, increasing the competitiveness of agriculture through land reforms. Deputy Economy Minister Arman Khojoyan delivered a speech.

The Deputy Minister spoke of the government’s vision for the sustainable development of the food system, which aims to develop agriculture that produces high value-added products. Strategic objectives, priorities, challenges and current programs were presented. He noted that in 2021, the gross output volume of agriculture is 933 million drams and the growth is fixed. The effectiveness of the state agricultural technology leasing program was underlined, within the framework of which the technique is renewed by 2% per year. Today there are more than 26,000 units of agricultural technique in Armenia, and the success of this program is also conditioned by the increase in productivity in certain directions, for example, in the export of canned fruits and vegetables. The effectiveness of intensive gardening and agricultural risk insurance programs was also noted.

There was a discussion around government agricultural reforms and productivity boosting tools. Issues related to tax rates applied to food products were discussed and comments and suggestions were made.

On another issue, the concept of increasing the competitiveness of agriculture through land reforms was presented. It was noted that it aims to overcome the problems of land fragmentation, poor access to irrigation water and financial resources, poorly developed infrastructure, complexity of the property transfer process. To this end, there are already state support programs: creation of agricultural cooperatives, subsidization of interest rates on agricultural loans, etc. online platform and other tools.

The Prime Minister noted that the root cause of land non-use is the lack of a land market and land reform should mainly target its formation. Opinions were exchanged on the concept presented. Possible measures and alternative solutions to existing problems in the direction of developing irrigation infrastructure, increasing agricultural productivity and increasing the level of land use were discussed.

After discussing the issues on the agenda, the meeting of the Economic Policy Council Deputy to the Prime Minister of Armenia ended. Summarizing the discussion, Nikol Pashinyan said:

“Dear colleagues,

Mister President,

We must summarize the results of our work, and first of all I would like to thank you all for your active participation. This is in fact a preliminary meeting of our Economic Policy Council, the results of which were to determine, in the first place, the future direction of our work in this format. In fact, we have discussions like this quite often, and what new component do we see in this format? It is first of all the formalization and approval of the name, and on the other hand, it is the participation of experts invited to this work. I would like to thank them again for their willingness to participate not only in this session, but also in future work.

We had a brief working discussion this morning, and our fundamental wish is to have a panel of independent experts who are not politically or otherwise affiliated with the government or the authorities, and who will accompany the government’s economic reform program in as an independent and impartial body. That’s the first thing.

And secondly, we want the Council to become a bridge between the government’s reform agenda and, figuratively, the international expert community, because we might need expert advice on some specific topics, and the members of the Economic Policy Council will help us find experts who can best advise the Armenian government in this area.

We have agreed that the Center for Economic Perspectives Foundation under the leadership of Mr. Javadyan will assume the role of organizing the realization of the work and communication within the framework of this council, which is very important.

Did I personally draw a specific working conclusion for myself from these discussions? I have to say that when I reflected on the specific working conclusion that came out of our discussions, I wanted to go back to the discussion we had at the end of yesterday which started with a discussion about priorities, but I will rephrase a bit. I came to the following conclusion from the discussions: all of our industry programs are actually multi-component, encompassing many areas.

It is very important that we are able to identify areas that should receive more attention as they are driving forces. What is a figurative example to illustrate this? I roughly thought that if the horse, yoke, and carriage were figuratively placed in different parts of a large program, they certainly can provide some movement, but they cannot provide process. To do this, it is very important that the horse, yoke and cart are placed in the correct order, and the process will be provided.

We have many programs, for example, where we provide some movement but no process. And I would not be ashamed to admit that the brightest example is the digitization program in the Republic of Armenia, when we have seen that in fact a lot of effort has been invested in the field of digitization, enormous resources have been expended over the past 20 years. years, work has been done, but nothing has been done in terms of digitization. We want to understand why so many resources have been spent, but the Republic of Armenia is actually at a very early stage in the field of digitization.

It turned out that the same problem arises here: we have not solved the question of the horse, the yoke and the cart. We decided to call on experts to understand how to transform the movement in this field into a process. And when the experts came, they were able to help us understand that there are, so to speak, benchmarks or process drivers, and we need to pay more attention to those drivers, which are what’s going to advance the process. Even with much less effort, with fewer resources, with the right organization, we can guarantee a fast process.

As a result of this discussion, for example, I would issue this same instruction to government and public administration to review our programs and see which ones need to be streamlined and which ones need to be moved to a higher level of the agenda to ensure that they progress, thus ensuring the implementation of both sectoral programs and general programs of the administration.

Mr. President, allow me to thank you once again for your participation. We agreed to continue discussions in this spirit.

Once again, I would like to thank our guest experts for their very important work. The work of these two days makes me optimistic that we are on the right track. Having said that, I would like to say that we have thought about this expert task for a long time in the same logic, but we have constantly seen that something is wrong for many reasons, starting with the fact that sometimes we cannot not get out of politicization, which initially creates a very serious problem, and we hope that we have found a model that gives answers to all our questions.

Thanks again. We will agree on the next meeting and the schedule in general in working order. I wish you all good luck.”