Friday, 10 April 2009
YEREVAN MAGAZINE
Is crisis terrible as much as our fear for it? Is it necessary for us to adapt to it or should we use it to shape a new world? Is there a model for Armenia suitable to this new space? Which is the Armenian vector of development? Who else if not the head of the cabinet is to answer these questions? However, RA Prime Minister Tigran Sargsyan thinks that today’s global problems are far past the competence of economists.
Interview by David GRIGORYAN
«NO AFFAIR IS MORE DIFFICULT TO DEAL WITH, MORE DANGEROUS TO CONDUCT, MORE CONTROVERSIAL IN SUCCESS THAN THE REPLACEMENT OF OLD REGIMES BY NEW ONES»
NICOLO MACCHIAVELLI
TIME TO SCATTER MONEY, TIME TO COLLECT THOUGHTS
Mr. Prime Minister, in your opinion, what advantage can be taken from the crisis?
- Fair, because Armenians especially feel at ease in emergency situations. This is our natural condition which has developed historically. The more threats and challenges we face, the more actively and more inventively we struggle for survival. Instead, we feel some discomfort when there is stability and normal development. Surveys show that we think ourselves to be the most unfortunate nation in the world. From this point of view, crisis can be deemed as a chance. And, if used correctly, it can help us change our vision of affairs. That is to feel at ease with stability and development. One nail drives out another! Therefore, I believe that crisis is the best moment for realization of unconventional decisions. Accepting the thesis of a spiral-wise development of the society, crisis in positive sense will be seen as an opportunity to correct the mistakes of the past. In the 90s as we only started to build an independent state, we had rather idealistic representations about market economy and democracies. We tried to spread institutes alien to our society which a priori did not work and by that exhausted itself in an imitating trap. Now we have chance much to correct faster, than we planned, when have come to power.
You speak about imitating traps and institutes alien to us, and the some people assert that business and democracy have no national and mental features …
- As direct question has not been asked, I shall ask you my own question. Is it possible to instantly build a democratic society in Armenia?
Hardly...
- True. Because the construction of any public model means that first of all we should change behavior. They should behave otherwise than in socialist, communist or other society.
On order?
- You are right. The point is in how to change the behavior of people: by simple spreading of forms? We know that a democratic society is constructed so that the executive authority must be separated from legislative and judicial powers. Well, we have created parliament, a government, independent courts. But it also is only forms … spread. Transferred mechanically, they do not work, as we cannot fill in with their contents.
What prevents us doing so?
- People, more exactly, those public officials who do not understand the essence of State institutes. And in fact they should be reflected in their visions and behavior. A problem that such people at us are not present - they could not fall down to us from the sky!
Is it hopeless as much?
- It is difficult, but not hopeless. Simply it is necessary to do it - to change each of us and change the outlook of others. If we want to have a new society, it is necessary to get through it.
We can admit that it will be possible for us, like baron Munhausen, to pull out ourselves from a bog. Where to go afterwards? On already someone to the approved road or the way?
- That is whether there is at each country a way of development or it is destiny of elite? Judge: of more than 240 States existing today only about 40 are successful. The others try to imitate the experience of advanced countries. But, as shows the same experience, would not try better! There is all the same problem of adequacy of form and contents. If it lacks, an artificial reproduction of a successful model is likely to become a caricature. Is not it better to look for one’s own way? But whether there can dare be Armenia luxury own road? Indeed, “experience is the son of hard mistakes.” Of course, it is necessary to take into account the experience of others. And, certainly, boldness is needed to make a breakthrough. For this purpose there is one necessary condition: A team of ideas must show up at the right moment in the right place. It is not a sufficient, but rather a necessary condition - leaders who have a vision of the role. People follow them. And this is a mere chance. However, “the son of hard mistakes” quite often offers the opposite variant - leaders, driving the nation into an impasse.
And we unequivocally deadlock people or in a history of Armenia happened, what during necessary time in the necessary place there were necessary leaders?
- It is hard to forecast. In Russia there was a controversial project called Name of Russia, while people voted for Stalin. Is not it paradoxical.
Well in any sense there is some logic: “Russia cannot be understood by mind.” What about us? We know our priorities? Is there an Armenian vector of development?
- Now it is necessary to concentrate on those local problems to address at any scenario in intermediate term and long-term prospects. I mean first of all the three whales of economy: safety, infrastructure (including communications) and food security. As a whole if we recognize the originality if we understand that the form and the contents should be in harmony we should find the model. This means that by harmonizing the form and the contents, it is necessary to set the correct purposes simultaneously. In fact depending on the varying purposes harmony varies also. That is or we should have boldness to declare, that we the special civilization having the model of development or to rank ourselves to European. In this case, by setting a target, namely integration with the western civilization, we should direct our efforts towards adopting her forms and the contents. Plus to build that trajectory which will lead us to to the set purpose.
Thus, our vector is aimed at Europe?
- I think we are not a western civilization. It is erroneous to believe that we can build a European society in Armenia. However, I think erroneous and to rank us as the Asian civilization. In general it seems to me, that the main thing in the friend: in that at each stage of our development and every possible changes the society remained in harmony. Unfortunately, today it in deep disharmony. In it our global problem. All of us are dissatisfied with ourselves, the environment, the Armenian world, the country.
Well, clearly, “grumbling.” But this problem will hardly be solved – it is our mental feature.
- And the solvable problem is elsewhere: we are short really educated people. The second problem is that intellectual people are not seen as an asset in our country. If we do not change this attitude, we will be doomed to failure. In this sense, I very much like the formula: crisis is good insofar as today something else than money can bring about success. By the way, in Armenia most probably money never was a decisive factor, because in Soviet times it was difficult to know how much money people had. What mattered most was the surroundings or as it is said today – “the ponts.” Unfortunately, this is the case today. And it is fatal. And, coming back to crisis, we shall add to his pluss that he has changed definition of success. By the way, now speak about necessity to have serious knowledge much and to be well informed. But it is already last century, in fact the information and knowledge quickly become outdated. It is much more important to learn than people to think. If the person does not have ability to think he does not have future. And if there are the thinking people, capable to work with the information, that is and prospect of development of the country. This jump - from mechanical accumulation of knowledge to active ability to think - to us also needs to be carried out.
Similarly, it is necessary to choose the third way as unclear as it may seem
The Armenian world!
IF TO WAIT WHILE THE TROUBLE WILL BURST, ANY MEASURE WILL BE USELESS AS THE DISEASE WILL BECOME INCURABLE
NICOLO MACCHIAVELLI
TIME TO LEAVE, TIME TO COME BACK
In the meantime, has “the small plane Armenia” any chance to skirt the zone of financial turbulence?
- I think “the small plane Armenia” - not, but the big liner - the Armenian world – yes. And much depends not only on the government and the population of our country, but also on Armenians worldwide. I shall now explain. We are trying to build relations of trust, to convince our compatriots outside the native land that now it is high time to consolidate the efforts around of Armenia. And not on charity, and on principles of healthy partnership. I think, for many of them now it is high time to begin business in Armenia, here to keep the savings. Paraphrasing Ecclesiast, it is possible to tell: time to leave, time to come back. It is necessary to go to travel on the historical Native land and to find the half of House! Armenians are interconnected and vzaimozavisimy. Armjanstvo is a uniform organism irrespective of, the person in Armenia, in Moscow or in Los Angeles lives. It is impossible to consider the economy of our country separately from Russia or the USA. I always bring an example of the Russian default of 1998 as a result of which financial streams have changed the orientation and have gone from Armenia to Russia. That is, as against former, the help went not from the Russian Federation here, and on the contrary. Approximately at the same time in streams from the USA to Armenia have some times increased, and the balance was restored. It is the best example of the all-Armenian organism - our liner “the Armenian world.” It has much greater chance to slip this zone of turbulence than its portion. In general, it seems to me, that the 21st century – the century of Armenians because there will be lots of changes in XXI century, and we are not afraid of them, we are able to adapt. The world has reached such stage of development when technical revolution is carried out each 5 years. The same revolution forces to change a life and thinking of people.
That is the economic crisis can be counted the catalyst of the future changes promoting even overcoming of spiritual crisis?
- Spiritual crisis began earlier. All oustanding philosophers of our time, and first of all European, are set by questions what began with Christian values and where there is a western civilization? Their works do not leave doubts that the world for a long time is in spiritual dissonance. In a critical condition people try to foresee at a pragmatical level the future, proceeding from existing laws. When it is impossible, they come back to more fundamental values - spiritual - and start them to reinterpret. If not to reveal laws of crisis it is possible to slide to the bottom, then to return to an initial condition. Obviously, scientists cannot count law of modern crisis yet and, accordingly, cannot offer because of it model of restoration of system. Therefore many speak, that it not crisis, and disintegration, chaos. In that case we are present at a birth of the new world. It rather disease process, in fact much for us in this transformation is not clear. And the financial crisis is not but a display of disease in the process of a birth, like the surplus of temperature. Our mistake consists in that we want to correct consequences in a situation demanding reconsideration of the cause. Not with crisis it is necessary to understand, and to try to understand, what will be the new world. For this purpose it is necessary to return to sources and to understand to itself, on what values and principles the new world will be under construction. Of what it is necessary to think. And answers to these questions should give not financiers with economists, and wise, thinking people.
Whether can happen, what at a birth of the new world the situation will get out of control?
- The chaos also means that nothing can come under control. There are some spontaneous processes which logic is not clear. And if it so it is difficult to tell to whom it will be bad to whom it is good. And in general, I think, that from the new world will win all. When something new is born and when harmony is established, everyone will be on the winning side.
Does your work experience in the Central Bank help you to better understand the events and the tendencies of global changes?
- It is hard to overestimate this experience. Working in the Central bank means keeping a hand on the pulse all time. Operative response to changes is a natural course in emergency situations. Therefore, I have benefited very much from my years in the Central Bank. I happened to make sure that that monetary policy is an art. And now I understand that running a government, too, is an art!
Do you agree with the chairman of the Central Bank of the Russian Federation in that the crisis will destroy half of banks?
- I think, that the statement my former colleagues truly for Russia. In bank sector of Armenia it is qualitative other situation. We do not have problem banks, there is no problem of capitalization and liquidity. In fact, over the past 10 years of banking sector reforms we abided by too stringent policies, we cleared the sector from criminal and pocket banks. During this period the Central Bank and myself underwent much criticism for rigorous policy, while in the end we proved to have been on the right path. Many countries of former Soviet Union have not made it, therefore have tested bank crisis.
Which were the main principles behind your tough policy?
- To close problem banks, it is necessary to have boldness. It is uneasy, and in any country. Because is many investors and influential proprietors. Certainly, they render serious counteraction, plus - political pressure. In such situation the head of the Central Bank always has temptation to give in to this pressure. But, if it occurs, the critical problem weight which then blows up starts to collect, as results in crisis. Will is needed to resist and walk along “the rigid way.” She or is whether or not. All is simple. But after systemic cleaning healthy banks get the possibility of expanding into the financial space due to which we have an organic improvement.
What do you think of the inflow of foreign partners into the banking system?
- Very positively. Thereby we have equal competitive conditions. When HSBC Bank came to Armenia, everyone was horrified supposing this transnational corporation might swallow our small banks. In practice, sound competition helped local banks to understand that it is possible to compete and co-exist with the sharks of imperialism.
What functions will the All-Armenian Bank exercise? Has the model undergone changes due to the crisis?
- I for the first time allow the answer to this question. It not simply new commercial bank. It is the institute created within the framework of the new ontological concept of the Armenian world. No such bank has as yet existed and will ever be born in the world. We are creating a qualitatively new institute. It will operate in a new space not only for the Armenian state, but for the whole Armenian world. It will be a bridge for Armenians all over the world. It will have to think up a toolkit which the Armenians can use irrespective of their place of residence. The model of the All-Armenian Bank has not undergone any changes because it comes neither from the past nor from the future.
Does Dilijan project hold a special place in the future model of Armenia.?
- Armenia is a small country and all projects are special to us: the Gyumri project with its techno-park and the restoration of the earthquake zone, the Spitak project with its Masters’ City, the Dilijan project. Though last in the most vulnerable condition as in view of global financial crisis his architecture should change essentially. Today bank system of Armenia, perhaps, one of steady in the world. Warning indignation of my opponents, I want to tell, that it is connected not only to her scales, but also with a State policy in the sphere of financial regulation directed towards early revealing and prevention of risks. It can also become a good pre-requisite for the creation of a regional financial center in Armenia.
To your mind, is the imminent wave of repatriation due job cutbacks abroad a positive or a negative aspect of the crisis?
- Someone said that coming back home means to return to the Source. It is always nice if you have where to go. Naturally, for the repatriates it is a binding step, but for many families who have lived away for a long time, it is a chance to rethink how to build the joint destiny further. As to the question on social and economic position of those who have lost work as a result of the crisis, it is in the center of the government’s attention. We have some obvious decisions. We not declared time the beginning of large infrastructural projects in sphere of power, road and housing construction, etc. Everyone knows that the majority of our compatriots whop have lost their jobs, were employed in the building sector. And it is a real workplace for those who decided to stay at home. Those desirous of starting a business will have a real chance to get State support.
ANY CHANGE LEADS TO OTHER CHANGES
NICOLO MACCHIAVELLI
TIME TO COMPRESS TIME, TIME TO EXTEND IT
With the presidential model of governance, the prime minister is frequently perceived as a “whipping boy.” Does the crisis increase such probability?
- I am afflicted more not with this opinion, and that people start to speak stamps and to hang up labels. For me it is a signal that they cease to think. The president invited me to join the new team because we had a common understanding of what was necessary to do and the main thing - how to do. Crisis compels us to consolidate even more our efforts and to work under emergency conditions. One does not need great wit to resort to populist criticism during an economic crisis when there are objective reasons affecting the living standards of ordinary people. But it is necessary to possess wisdom and political boldness even to support correct decisions of the government.
Do you feel support?
- Yes, as I am here talking to you.
Do you have time to do something personal?
- I understand that time is a concept extensible. Everything can be fitted into time - family, children, books, sports and work. The main thing is to organize correctly and give it the exact extension. No one knows what time is and everybody stretches it as much as he can.
- 3 children: is this a parameter of confidence in tomorrow’s day for your family or for the country?
First of all, it is a three-fold happiness. The birth of a child is a gift which forces to return to the fundamental values of life. The fear and uncertainty in the future should not become an obstacle for creation of family and birth of children. You have no doubt over having children when you are not lonely, when you have a family and shared affection. I trust in tomorrow’s day, in the future of our country.
What do you think will be Armenia’s brand in future?
- Ararat! No beaten objections are needed! In the modern world of absolutely any value has no geographical position of the country and what she particularly owns. By the way, Zion is today Armenian. We own Zion in Israel. And even we can sell it de jure. But who de facto owns Zion? – The Jews. Because it is their spiritual property! Just the same way Ararat is owned by aliens while it is in the heart of the Armenians. Ararat is in us irrespective of where we live.
Lawrence the Arabian said Armenians reproduce by night and do trading by noon
- I think it would be strange if we reproduced in the afternoon while trading by night!
