TODAY.AZ / World news

Every Armenian worn U.S. debt ring

23 November 2015 [18:14] - TODAY.AZ

/By AzerNews/

By Laman Sadigova

Even a primitive calculation shows the difficult situation that Armenia finds itself in the issue of typesetting debts. Dividing the total amount of foreign debt on the actual number of people in the country, it turns out that every person in Armenia owes foreign creditors about $1.600 without commission.

Armenia has the highest level of external debt in the region.The International Monetary Fund even predicted that it will reach 62 percent per capita in 2020.

The complex situation around the state debt of Armenia is getting complicated because ill-economy Armenia mostly ruled by corrupted government prefers to borrow regularly and now the country owes everywhere and everyone. Experts alarm that might be even fatal for weak post-Soviet economy reminding a "terminally ill patient".

The reasons for such a deplorable situation is quite different and ranges from the lack of economic and geological resources, ill-conceived economic structure, and huge need for energy. Yerevan's aggressive policy and a corrupt and criminal government tops the list, leaving no hope for the nation to survive this hardship.

The public debt index is the current government’s effectiveness indicator.

Aram Manukyan, Secretary of the Armenian National Congress said that not only the number and amount of the debt but also its ratio to GDP is catastrophic big. The country’s state debt relative to its GDP was 48.3 percent in 2015 but will reach 49.4 percent in 2016.

Manukyan also said that every citizen of Armenia, even a newborn, owes $1,600 to the U.S.

What is concerning is that there is no clear explanation how the Armenian government spends all the borrowed money.

The state debt of Armenia, as Manukyan is right to note, is just a money spent without any benefit to the country. On the contrary, loans which suffocate the country are the burden for future generations.

Armenia’s foreign debt has increased by roughly 300 percent over the past seven years, to 46.6 percent of its 2015 gross domestic product of over 4.5 trillion drams ($9.63 billion), the country’s Central Bank reported.

The figure only emphasizes the deepening crisis in Armenia, while the government does nothing to rectify the situation.

The International Monetary Fund has already expressed concern over the debt burden.

In 2008, when Serzh Sargsyan came to power, the national debt stood at $1.6 billion. Now, the country’s economic policy (if it can be called so) is based on loans and borrowing. All the borrowed funds go out only to support and strengthen their power and to avoid a massive collapse of the national currency.

With $1.6 billion, the World Bank is a huge lender for Armenia, accounting for roughly 40 percent of the country's overall foreign debt. The IMF ranks as a distant second, with over $442 million, or about 12 percent of the official total. The Asian Development Bank has provided $300.6 million, or nearly 8 percent of loans.

These numbers do not stop the Armenian government. Only in the last 2 or 3 weeks the national debt increased by $581 million, said Manukyan.

Manukyan stressed that according to the state program, the debt to GDP ratio was planned to be reduced by 1 percent per year, which was to cut by 39 percent in 2015, by 38 percent in 2016 and 37 percent in 2017.

However, this program remained just a dream, on the background of increasing ratio of public debt to GDP almost reaching its peak.

URL: http://www.today.az/news/regions/145392.html

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