February 6, Crisis Impact on Armenia Aram Gharibyan, Adviser to the Prime Minister of Republic of Armenia

2 Crisis Impact on Armenia Crisis impact on Armenia in figures Pre-crisis economic developments in Armenia Possible steps to cope with the crisis

3 Crisis impact on Armenia in figures 2009 January-May 000 AMD Change in % compared with the same period of 2008 GDP Industrial Production Construction Import Export Tax Revenues

4 Pre-crisis economic developments in Armenia AMD AMD Change in % GDP, of which times Industrial Production times Construction times Agriculture times Others times Price per 1 sq.m of apartment in Yerevan times

5 Pre-crisis economic developments in Armenia States minimal involvement in the economy Rapid growth of real estate prices Flow of investments and credit resources to the construction sector for quick and high return State did not put enough effort to balance growth among different sectors of the economy

6 Pre-crisis economic developments in Armenia Low speed of tax and customs administration reforms for improvement business climate in Armenia Underdevelopment of export promotion financing instruments and not very simple exporting procedures Low speed of implementation of corporate culture in the state owned enterprises

7 Possible steps to cope with the crisis Minimizing crisis impact on vulnerable groups of population States significant involvement in the economic activities Coordinated monetary and fiscal policies to generate liquidity in the economy and direct it to the companies with the export potential and systemic enterprises Support small and medium enterprises and start up businesses

8 Possible steps to cope with the crisis Speed up tax and customs administration reforms Simplify export procedures Minimize tax legislation amendments State supported big infrastructure development projects implementation

9 Crisis Impact on Armenia Let us concentrate on opportunities that crisis has created and develop ambitious projects to benefit from the crisis and do not focus only on minimizing crisis impact. Attack is the best method of defense!