Economic genocide has been committed against Hayastan since the declaration of its sovereignty from the Soviet system. The application of the International Financial Institutions (IFI) structural adjustment programs that have been put in place favor the internationalism of macro-economic policy under the direct control of the International Monetary Fund (IMF) and the World Bank. At no time in history has the “free” market played such an important role in shaping the destiny of a supposed “sovereign” nation.

Since the early 1980s the “macro-economic stabilization” and “structural adjustment” programs imposed by the IMF and the World Bank on developing countries (as a condition for the renegotiation of their external debt) had led to the impoverishment of hundreds of millions of people. Contrary to the spirit of the Bretton Woods Agreement which was predicated on “economic reconstruction” and the stability of major world exchange rates, the structural adjustment program has contributed largely to destabilizing national currencies and ruining the economies of developing countries. Its social impact has been devastating.

There are many ways by which the IMF and World Bank lending to Hayastan has been able to retard the development of its economy.

The IMF tightly monitors and provides resources for the restructuring of the Central Bank. This means that the IMF rather than the government controls money creation, and so becomes the vehicle able to paralyze the financing of real economic development. Incapable of using domestic monetary policy to mobilize its internal resources, the country becomes increasingly dependent on international sources of funding which has the added consequence of increasing the level of external indebtedness.

Policy-based Lending:
There is a close relationship between debt-management policy and macro-economic reform. Data management is confined to ensuring that the individual debtor nation continues formally to abide by their financial obligations. Through “financial engineering” and the careful art of debt rescheduling, repayment of the principle is deferred while interest payments are enforced. Debt is swapped for equity and “new” money is lent to the nation on the verge of bankruptcy to enable them to pay off their interest arrears on “old” debts so as to avert default. In this process the formal loyalty of the debtor is paramount. The creditor (bank) accepts to reschedule only if the debtor nation abides by the “policy conditionalities” attached to the strict loan agreements. The objective consists in enforcing the legitimacy of the debt servicing relationship while placing the debtor nation in a stronger straitjacket which prevents them from embarking upon an independent national economic policy.

Ownership and Privatization of Agricultural Land:
World Bank reforms consist of issuing land titles to farmers, while at the same time encouraging the concentration of farmland into fewer hands. Customary land rights are also affected. The tendency is towards mortgaging of land by small farmers, which only increases the growth of the agro-business sector, with a subsequent formation of a class of landless seasonal agricultural workers.

The conditionalities and nature of these loan agreements do not favor the real economy, since none of the money is channeled into internal investment. Another important objective is served, however: The adjusted loans divert resources away from the domestic economy and encourage Hayastan to keep on importing large quantities of consumer durable goods and luxury items (Mercedes Benzes). In other words, tariffs are eliminated in favor of imports over exports. The result of this process has been stagnation of the domestic economy, enlargement of the balance of payment crisis and the increasing growth of the debt burden.

Engineering the Collapse of State Investment:
Under the public investment program (PIP), all project loans require a system of procurement and international tender (competitive bidding) which allocates the entire execution of public works projects to international construction and engineering firms. These firms in turn skim off large amounts of money into a variety of consulting and management fees. Local Armenian companies (whether public or private) tend to be excluded from the tendering process although much of the actual construction work will be undertaken by local companies (using local labor at very low wages). In other words, loan money earmarked for infrastructural projects is largely “recycled” in favor of multinational contractors.

An interesting conditionality of macro-economic reform upon social programs is the insistence that their funds are not to be used for free health services. Patients are charged a $40.00 tax paid in advance for hospital services. It is known that after a particular hospital had administered free aid the electricity was turned off to the hospital because it was not able to pay its electrical bill.

Divestiture and Privatization of State Enterprises:
Structural adjustment constitutes a means of taking over the real assets of the indebted country through the privatization program. The privatization of state enterprises (selling of the nation’s assets at give-away prices) is invariably tied to the renegotiation of the countries’ external debt. The most profitable assets of the nation are taken over by foreign companies in exchange for paying off the debt. The Nobel Prize winner in economics, Joe Stiglitz, was the chief economist of the World Bank until 1999. He has gone on record in the London Observer with the observation that the International Monetary Fund and U. S. Treasury fixed Russian elections during Yeltzin’s administration. He also expressed discontent of the brand of globalization endorsed by every president since Roosevelt. He stated that: “National leaders do not usually object to the sell off of state industries. Instead, they use World Bank demands to silence local critics. The 10 percent commissions paid to local ministers seem to satisfy their dreams of wealth. All they do is shave a few million off the price, and wire it to a Swiss bank account. The U.S. Government knows this.” Of course, as long as the leader of the country goes along with the loan agreements they will finance his re-elections.

To put it simply: Hayastan’s leaders must sell assets of the nation in order to pay (only the interest) on the money they are borrowing for running the government It is under these conditions that Hayastan is not able to build its economy based upon its natural national creativeness.

For 65 years Hayastan did not have total control of its destiny under the Soviet system. Now, after so called freedom of over 10 years, the International Financial Institutions (IFI) are in control of its destiny. The only difference is that the population is forced to leave the country, making it more vulnerable for extinction as a nation. That, of course, is the intent of the internationalists. The remaining populace is influenced by exterior social influences, which slowly affect the character of the nation. A “One World Government” is their goal. Nationalism is their only impediment. The only consolation is that there exist nationalist groups and patriots in Hayastan that know the truth and will die on the soil before leaving it.

Armenia must wean itself slowly from the clutches of the internationalists, but must first prepare the groundwork very carefully. To begin with, leadership must have the sacrificing patriotic spirit. They must make it abundantly clear that foreign investment would be welcome as well as secure. The only exception would be to renegotiate the previous agreements made regarding the sale of gold mines and transfer total control to Armenia’s parliament. Armenia must untie the dram from created debt funds and float its own national money backed by gold. This, of course, will infuriate the internationalists, and Hayastan will be blacklisted and confronted with demonization which will cause disruptions in its already precarious economy. Once the confidence of the populace has been established, that their money is sounder than borrowed money, the nation’s economy will blossom in a steady and healthy manner. There are two choices: Either you continue on the present course which will lead to slave status and extinction, or fight for your existence as a nation.

Ardavast Avakian
Boca Raton, Florida U.S.A.
Feb. 2002