Economic Policy & Development Planning
Economic Development Policy
Pursuing its aim to create an independent, democratic, social and legal State the Government of the Republic of Armenia adopted the policy of market relations and with that end in view the process of economic reformations based on the liberal values initiated. As a result of economic liberalization, increasing investment and business activity, maintaining a free economic regime and the steady and consistent implementation of integration policy in the world economy the degree of predictability of the Armenian economy has raised and the level of risk has decreased which has evidently won authority for our country.
From the Economic Growth Towards Sustainable Economic Development
The chief aim of the economic policy of the Republic of Armenia was an efficient distribution of resources within the lifespan of one generation while the progress of contemporary civilization is conditioned by ensuring a steady development, in the event of which the opportunities to meet demands of present-day and future generations will be much more guaranteed. In this sense, the economic policy, in parallel with quantitative growth, is currently directed towards the provision of a qualitative economic development. In other words, the supremacy is the maintenance of an economic evolution based on a more intensive use of human resources i.e. intellectual and creative abilities, with the tendency to reduce the strategic role of natural resources.
Currently, the main strategic task for Armenia i.e. the creation of an economy based on knowledge is grounded on the maximum realization of available prerequisites of scientific and technical progress. The emphasis is on human development through revealing and enhancing one’s abilities, spurring up the practice of scientific thought and, finally, rapid scientific and technical progress.
Through the shift of the economy to a qualitatively new and higher level i.e. by means of increase in specific weight of products requiring scientific thought, technologies, services in a newly created value, the policy of economic development is being carried out in the following strategic directions:
- Formation of Competitive Advantages.
The process of forming competitive advantages proceeds by the consideration of such a basic strategic principle according to which the competitiveness is not inherited but gained in harmony with time. The economic competitiveness depends on the opportunities of introducing innovations and modernizing the real sector of the economy. The policy of increasing the competitiveness in Armenia is focused on separate spheres and realms of the economy. The principal purpose is to maintain prevalence in such sectors where the production factors are powerful scientific and technical bases and a high quality staff, which possesses qualities to involve heavy investments and modernize continuously. The policy of increasing the potential of high technology manufacture, which creates a high added value by means of technological reequipment is being carried out also in this context. - Development of Innovatory Processes.
Under the conditions of modern globalization when capital flows have increased in a unprecedented way and are basically directed to the sphere of high technologies, and the introduction of innovations has become a core factor of market economy, the policy of innovatory development is being directed to making Armenia attractive for such flows turning the country into if not a producing, but at least a servant country in the shortest possible period. To transit from such a secondary to a primary role (i.e. from a servant into a producing country) the policy of promoting the formation of a research system, capable to integrate in modern systems, is being realized. The innovatory development of the economy in Armenia has started by establishing a national innovatory system. The basic purpose of this stage is to establish infrastructural and institutional bases. The policy for the next stage will be directed to the stimulation of establishing such manufacturers who can appropriate latest innovations and produce science intensive manufactures corresponding to the international standards and thus, accessing foreign markets. - Continuous Improvement of Business Environment.
The major pledge for a continuous increase of the level of improvement and attractiveness of the business environment is the establishment of appropriate favorable and sustainable legal bases in the event of which a businessman, taking only business risks, will bend every effort to the improvement of management skills. The realized and continuous institutional reformations (reforms in financial, insurance, standardization and other sectors) will guarantee the involvement of long-term and heavy investments. Moreover, as a result of the policy being carried out, it is expected that constantly growing investment flows (also conditioned by the involvement of transnational corporations) will afford an opportunity to set up large-scale financial and industrial centers and due to the property of forming clusters, conditions will be created for further development of entrepreneurship. For a viable and dynamic development of small and medium-sized enterprises the emphasis is on the provision of the continuance of the definite state policy of promoting small and medium-sized enterprises which is expressed in consistent measures taken for the establishment of infrastructures and enhancement of financial, professional, technological and marketing opportunities. - Export promotion.
A policy of direct export incentive has been adopted in our republic for ensuring progressive rates of exportation not satisfied by the elimination of external barriers. Besides constantly simplifying administrative procedures, certain measures are being taken for promoting export paying no attention to the objective export limitations. In terms of increasing export volumes and ensuring a progressive rate of export growth with respect to importation, a fairly liberal current field is being continually improved focusing on the promotion of exporting outputs of science intensive production. Further development of this policy in Armenia will be advanced by way of ensuring an alternative solution to the transport issue, introducing an effective system of promoting exporters and /or privileged crediting, complete introduction of systems for insuring the risks of exporters, marketing and quality control, and involving transnational corporations. - Regional Development.
For the republic to enter a new phase of sustainable development, it is necessary for the economy to have an equilibrated distribution also in geographical terms. The adopted policy strives to solve the problem by way of improving the business environment in regions and proportionate social and cultural development, for the realization of which the issues on perfection of the management system and improvement of the activity of infrastructures urge to primary solutions. Proceeding from the priority of solving cardinal problems and supremacies of regional policy, the overcoming of the disproportion among the levels of economic development is being realized and will be furthered in future as well by dint of forming and developing clusters in regions, enhancing the productivity of agriculture, creating non-agricultural work places and increasing the level of self-employment.
Separate sector policies are represented in corresponding sections.
