GREAT BUILDING LAUNDRY FOR THE SAKE OF ECONOMIC GROWTH

It goes without saying that Yerevan cannot be built up endlessly. And what does building up or reconstructing Yerevan imply? Theoretically, it implies new road junctions which would take away traffic from the crowded city center, parks which would make summer heat more bearable and where people could relax without having to pay, in other words, they would be free from the cafe expansion. It also implies new residential areas which will solve to some degree the problem of housing. It implies new office buildings where working would be more pleasant and therefore more effective.
Practically, however, it implies a crowded city center, with concrete devouring green parks, with few parking lots, noise of the cars stuck in traffic jams which makes impossible to live and work there.
However, besides these theoretical and practical pictures new Yerevan will have quite different implications. When building up Yerevan ends, there will be decline in building. It may happen in five, ten or maybe fifteen years but it will surely happen. Although, of course, the government has thought about it, and urban planning is done in an illogical way, which will keep the problem of demolishing and building new urgent. Nevertheless, at one time building up Yerevan will finally end, and decline in building will cause the economy to decline. Besides building the related services will decline as well.
There are two logical ways of preventing this grim vision: keeping building on the required level or carrying out a structural reform in the economy. It is not realistic to sustain the volume of building because it requires economic activity, meanwhile in Armenia economic activity is sustained by building. In other words, at some moment stagnation will be inevitable, if now is not the moment. In other words, the only realistic step is a structural reform in the economy. However, this turns out to be more difficult than sustaining the volume of economy. For this purpose it is necessary to eliminate monopoly, make efforts to develop information technologies which would promote hi-tech and spur economic development. Even if efforts are made, they are not sufficient, and IT develops slower than building. And this means that fluent shift is impossible. And the size of the decline may make any shift impossible. In other words, a highly coordinated action is necessary. And naturally this is more difficult for the government than sustaining the level of building. It takes a phone call to an oligarch and an instruction to build a new building or compound, or finding a foreign investor who needs to launder millions. This is easier, and the contrary is the end of the economy.
JAMES HAKOBYAN

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Headlines for January 19, 2007

GREAT BUILDING LAUNDRY FOR THE SAKE OF ECONOMIC GROWTH
JAMES HAKOBYAN
It goes without saying that Yerevan cannot be built up endlessly. And what does building up or reconstructing Yerevan imply? Theoretically, it implies new road junctions which would take away traffic ...
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