On September 25, the press conference of the RA Minister of Finance Vardan Aramyan took place. Presenting the one-year activity of the Government, Vardan Aramyan stressed that in 2017 the Armenian Government drafted and implemented prudent fiscal policy which was stated by the reaction of international institutions. The Minister reminded that in 2014-2015, the country was in crisis and during that period the indicator of the external debt has increased with about 13 percent. “If we continue to increase the debt in the upcoming years as well, of course, it would be followed by the negative reaction of international institutions, investors of our securities, but we managed to draft and implement such a fiscal policy which ensured positive tendencies”, - highlighted the Minister.
The Finance Minister attached importance to the fact that the rating organizations “Moody's” and “Fitch”, the International Monetary Fund (IMF) had positively reacted to the fiscal policy which was carried out by the Government of the Republic of Armenia in 2017. The Minister ensured that the investors of the Armenian securities in the international capital market had reacted positively as well, which is a positive indicator too. “The perception of the economic entities investing in our securities in the international capital market concerning our policy was also positive. This states that our activities were productive and we were able to overcome the difficulties occurred as a result of the crisis and to stabilize the situation”, - said Aramyan.
Vardan Aramyan informed that as a golden rule, the macroeconomic situation should be kept stable. It is the minimum condition for the economic development which will ensure a stable long-term economic growth. In case of the absence of the latter, it would counteract the investments and result in decrease of economic activeness.
According to Vardan Aramyan, the internal debt market is important as it defines the benchmark prices, within the framework of which the toolkit is formed. “In this year, we have issued securities with 30 years of maturity period. This was unprecedented since it was without increasing the interest rates, and in none of the former Soviet Union countries anything like that has happened yet”, - said Vardan Aramyan.
An important achievement in the sphere of debt management was the significant decrease of functional expenditures for the participants of debt market. Another important step was the transfer of securities primary issuance auctions from the RA Central Bank to NASDAQ OMX, a commercial platform with possibilities of implementing transactions with modern program solutions and tools of debt management; as well as the application of the principle of transactions implementation with securities (T+n).
An online system of retail sale of securities via Treasury Direct was introduced (gp.minfin.am), which enables physical entities to acquire saving securities online, as well as already market securities with weighted average interest rate. With this toolkit, Armenia is one of the leaders among the CIS countries.
Speaking about the tax policy, the Minister attached importance to the enhancement of international cooperation and, in this regard, he considered the membership to the Global Forum multi-sectoral tool as primary and stressed that currently Armenia has about 47 agreements on the avoidance of double taxation; in the upcoming 5 years 5-8 new agreements on the avoidance of double taxation will be signed and till the end of the year, agreements will be signed with Kyrgyzstan and Uzbekistan.
The implementation of property tax reform is an important direction in terms of tax policy and in this regard, the experience of different countries was studied and it is planned to conduct reform testing in 2018.
In 2017, the RA Government carried out serious reforms in the sphere of public procurements which resulted in simplification of procurement procedures, ensured transparency and contribution to the competitiveness. In December, 2016, the National Assembly adopted the new Law “On Procurements” (entered into force in 2017), afterwards, other legal acts deriving from were adopted.
The Minister stressed that an effective and independent extra-judicial appeal system of procurements was established on the basis of international experience. “A system excluding simultaneous participation of affiliated persons in procurement processes has been introduced aimed at increasing the transparency and publicity of procurement procedures, prevention of possible corruption cases, as well as increasing the level of civil society control over other processes”, - detailed Vardan Aramyan.
An online procurement accountability program has also been implemented, which enables the interested persons to get comprehensive information on procurement procedures and to carry out analyses via the flexible search system.
The next step in the sphere of public finance management is the introduction of accounting standards. The Minister of Finance informed that since 2017 in 24 more state institutions the new public sector accounting system has been introduced, and its objective is to make it possible to increase the accountability, transparency and efficiency which is one of the most important functions of public finance management.
According to Vardan Aramyan’s forecast, the 3.2 percent economic growth envisaged by the budget of this year would be more: by the end of the year, 4.3 percent real economic growth would be recorded. “All our models and current toolkit allow us to say that till the end of the year we would have 4.3 percent real economic growth instead of planned 3.2 percent”, - he ensured.
Finance Minister Vardan Aramyan summed up the report stressing that all these functions were assessed by the U.S. Department of State according to which Armenia is among the countries that meet the minimum fiscal transparency requirements.
The Minister also answered the questions of the representatives of mass media.
