Discussion

•  122 days before |  remove (5) |  reply
   hay wrote:
  in the short term (1-2 year) the imported goods price increase will increase unemployment but in the long run its good for the country. this policy will create more factories inside and will boost the export. now we are importing 5 times more then exporting. its the same as you consume 5 tomes more then you earn.
  we are a part of a open market economy, these kind of policy is vital for the future.
  
•  122 days before |  remove (5) |  reply
   Rafael wrote:
  
  • hay
    in the short term (1-2 year) the imported goods price increase will increase unemployment but in the long run its good for the country. this policy will create more factories inside and will boost the export. now we are importing 5 times more then exporting. its the same as you consume 5 tomes more then you earn. we are a part of a open market economy, these kind of policy is vital for the future.
  
  An increase in import tariffs will, decrease overall trade. When trade goes down, prices will go up for the imported good. The domestic good (if there is that substitute) now has a relative price advantage. However if there is no import-substitution and one isn't subsidized by the gov't then the people will pay continuous high prices. The import tariff effects consumer-welfare more than it effects unemployment. In the long-run? As Keynes said in the long-run we are all dead. On "Hay's" point of creating more factories...this effect might be ambiguous because the Armenian economy is a service based economy not a (manufacturing economy)...the effect can create more factories but its difficult to say. Now on the issue of boosting our exports...if we raise raise our import tariffs, a country might respond by raising their import tariffs, though this effect also is very ambiguous. Hay's mercantilist ideas do hold up...to some extent (they were popular 300 years ago), but in a neoliberal world, the Armenian economic team must understand that tariffs can also isolate a country.
•  121 days before |  remove (5) |  reply
   hay wrote:
  Now we start a deeper discussion I need to mention few things. The fact is that Armenian the government needs money to finance upcoming projects and the rise of import tariffs was inevitable if there were no other options to fill up the governments budget. It’s also helping to develop some sectors by increasing import tariffs of some goods and that’s the case if you listen these peoples complains. its true that overall trade will decrease buts its not dramatic, this index isnt significant for Armenia because we are not exporting again the imported goods. The plans seems ambitious and I say its still a good policy, if it is what I think it is, all the government needs to do now is to explain the local entrepreneurs that they need to make high quality goods to overcome the blockade and to compete with low cost producers and what other sectors they should focus on. Armenia is a small country and its not as difficult as it seems to change a course and find foreign markets.
•  120 days before |  remove (5) |  reply
   Rafael wrote:
  
  • hay
    Now we start a deeper discussion I need to mention few things. The fact is that Armenian the government needs money to finance upcoming projects and the rise of import tariffs was inevitable if there were no other options to fill up the governments budget. It’s also helping to develop some sectors by increasing import tariffs of some goods and that’s the case if you listen these peoples complains. its true that overall trade will decrease buts its not dramatic, this index isnt significant for Armenia because we are not exporting again the imported goods. The plans seems ambitious and I say its still a good policy, if it is what I think it is, all the government needs to do now is to explain the local entrepreneurs that they need to make high quality goods to overcome the blockade and to compete with low cost producers and what other sectors they should focus on. Armenia is a small country and its not as difficult as it seems to change a course and find foreign markets.
  
  The Armenian gov't should look at 2 examples in the past as part of its import-taxation: South America's ISI (import-substitution industrialization) and SouthEast Asia's Export-led growth. Both had the same ambition, but different outcomes. Armenia shouldn't use IS for products that it doesnt a comparative advantage or a advantage in human capital. The fact of the matter is most of the gov't revenue (70% i think) comes from customs, and it is no secret the that agency is corrupt, even SS didn't hesitate to embarass the agency on television. I think if the gov't gets it act together, what Hay is suggesting can relatively work in the long-run, but Armenians are known to have a high time preference (Economist Hans-Hermann Hoppe), and tend to want to 'make it happen over' night. If our gov't begins to think rationally when it comes to its economic agenda, then the country will definetly improve its GNI