Coronavirus strikes at economies

Coronavirus strikes at economies

What is happening in Armenia now, and will the country be the same after pandemic? Armenian Prime Minister says the "world will not be the same".
Text: Tigran Zakaryan

As COVID-19 pandemic seems to run amok across the world, many start to look into its social and economic fallouts. Many world leaders have touched on this matter to a different degree, however none of them can predict what those consequences will be.
Armenian Prime Minister Nikol Pashinyan in a recent interview with Shant TV channel said that the “world will not be the same” after the pandemic is over and that Armenian economy will have to be ready for such developments. He also promised a government support for the Armenian economy to help it overcome the negative consequences of the health crisis.
He said that an overall aid package worth 150bn AMD will be allocated for combating the economic and social consequences of the crisis. Those funds, according to the prime minster will be spend on financial support to businesses and their development projects as well as on those who could lose their jobs due to the crisis.  
Armenian Economy Minister Tigran Khachatryan at a news conference held on 19 March elaborated on the government plans to support the businesses and individuals who will be affected by the Coronavirus spread. He said that the details of the plan are not yet developed, as there is no available assessment of the situation and the possible impact of the pandemic. The economy minister suggested instead an adjustable strategy which is based on a close monitoring of the market and specific needs of the businesses. He said that support will be prioritized for such entities which are in critical condition, yet have an idea or plan of overcoming the crisis while another component of the state support will be social, targeting those employees who will financially suffer due to lockdown. A third component of the support will be provided after the health crisis will be over, targeting businesses with a development vision (through a special fund),according to the official.
Khachatryan mentioned tourism as a sector probably the most affected by the crisis, seconded by exports, particularly to Russia, which was additionally affected by the plummeting oil price and hence – depreciation of the Russian ruble. Khachatryan also mentioned the low international price for copper (going down from ca. $6,000 in January to ca. $4,800 per ton) as a serious challenge for the Armenian exports, while the sector provides a serious share of tax revenues and jobs.
The minster said that Armenia initiated a temporary lifting of customs barriers across the Eurasian Economic Union for healthcare items which might be relevant for the containment of the spread of the disease.

The minister also declined to predict the final impact of the Coronavirus on the planned Armenian GDP growth for the year 2020, adding that the situation is very volatile both domestically and globally.
Khachatryan said that businesses and international organizations implementing their development projects should be ready to readjust to new realities which will follow the crisis and added that the government is already in touch with international partners on this matter.
In the meantime the Armenian economy minister revised his earlier opinion that the crisis will have a “slight impact” on the economy suggesting that it will have “a short-term significant impact,” adding, that it had “already caused disruptions in some areas of economic life of Armenia”.
Yet he seemed reassuring as he said: “I am confident those lessons [of the crisis] will not go by unheeded and we will emerge more powerful from this situation.”
Later, on 23 March Armenian Economy Deputy Minister Varos Simonyan at a news conference provided some details on the current condition of the Armenian economy and restrictions imposed due to the pandemic. Simonyan said there are no restrictions of imports to Armenia through by air while inland transport restrictions are applied on some items. According to him, the complete border sealing regime with Iran was alleviated to some extent, permitting imports of certain items, including diesel fuel etc.
At the news conference it was also underlined that enterprises show great interest in the 25-bn-worth support program announced by the government. Currently the government through its relevant agencies is collecting information on losses and effects from the pandemic suffered by Armenian enterprises.  
Yet it seems too soon to be optimistic about a soon end of the pandemic and the possibilities of a quick recovery of the Armenian and global economy.
Nikol Pashinyan at a government session on 23 March said that “research shows that the current Coronavirus situation can linger longer than expected or predicted originally” advising to work towards finding and develop “free and safe zones” from where to work and organize life.
Time will show how effectively such “safe heavens” can be found amid a pandemic, which shows little if any sign to subside in the nearest future. Until then our prime goal is to stay healthy and do our best for others to be so from time to time thinking what could possible have gone wrong with the whole concept of the global economy which we used to enjoy yesterday.