Yerevan /Mediamax/. Interview of Gurgen Hakobyan, “Grant Thornton Amyot” shareholder, to Mediamax Agency and Banks.am portal

- There are various assessments and forecasts on the influence of the global financial and economic crisis on Armenian economy voiced today. We would like to hear your opinion concerning this.

- The events of the recent months, which have been taking place in the economies of developed and developing countries, could not avoid influencing Armenia. Today we may talk about limited influence of the global crisis on the Armenian economy. This first of all finds its reflection in price increase for credit means (on average for 3-4 percentage points) and the toughening of requirements by creditors towards borrowers. 

Certain difficulties have also appeared in the industrial sector, accounted for by the decline of prices in world markets. Some enterprises were forced to reduce production volumes or cease their activity. As it is known, the problem is more acute in the mining industry sector. I hope that the present situation will not be of mass nature: the situation in world exchanges gives grounds to state relative stability, which has established.

It is difficult to make any forecasts now, but to my opinion the changes, which should have occurred, already have taken place, and I do not think that one will be able to quickly make up for the negative manifestations, which have already occurred in our economy. Each country should independently find crisis management measures, but at the same time, much will depend on the global world developments as well.

- Is increase of demand for consulting services by “Grant Thornton Amyot” on risks management registered against that background and do you elaborate any target, so-called “crisis management” consulting products? 

- In general, the consulting business, just like any other sphere of business activity is in direct dependence from the general economic background, living through rises in the period of general economic growth tendencies and, of course, vice versa. At the same time, you are right, when you say that in conditions of a global crisis the demand for consulting products on the part of risks management may increase.

Today we have not yet registered increase of demand for such consulting services. I believe that one will be able to talk about the given issue starting from the second quarter of 2009. Services on risks management always existed in the portfolio of our consulting services and today there is no necessity to elaborate new, situational products. It is another issue that in Armenia those services were either in small demand or not in demand at all, while in world markets they always enjoy stable demand. I do not rule out that against the background of the events taking place the interest towards these products may increase in Armenia as well.

According to our forecasts, next year the company will register stable demand for consulting services, although we do not rule out that in the view of the recent developments the growth speeds may somewhat cut down.

- Following the results of “International Business Report” for 2008, the greatest obstacle for Armenian entrepreneurs is the absence of long-term funding. According to you, where is the way out of the present situation and can one expect changes to the better, especially in conditions of the global crisis?

- I believe that the problem will still remain on the agenda, moreover, it will become deeper taken into account the global crisis. At the same time, I would like to stress that we pin great hopes on the arrival of Nasdaq OMX in Armenia and believe that with the development of the capital market, auspicious conditions will be created for attracting long-term financial resources.

The entry of companies to the capital market may become a serious alternative for banking credits, which will also contribute to the increase of transparency of those companies. In my contacts with representatives of Nasdaq OMS I asked them whether there can be problems with financial resources, if Armenian companies put forwards concrete proposals. I received a sign from them that there are financial resources and there are investors, who are ready to invest in Armenia.

However, we all know very well that only large companies are capable of functioning at the exchange. In this connection, the issue of assisting small and medium enterprise may be solved at the level of state support through realization of target programs.

- The survey also showed that about 20% of Armenian private enterprises plan their further expansion due to deals on merger and acquisition in the course of the nearest three years. How do you assess this possibility for the banking system of the country?

- 20% is quite a serious figure and is characteristic of economies, demonstrating development. The results of the survey evidence change in the mentality of our businessmen, their wish to keep abreast with time and implement effective mechanisms of corporate management.

The tendency towards consolidation is also observed in the banking sector and I think that time will come when banks will also take the path of mergers. Everything will be based on the price offered and the readiness to pay the given price.

- Starting from 2009, companies, which have already been assigned “B-” and higher ratings by the Central Bank, will have to present financial statements, approved by one of the “big six” companies. What are your expectations concerning this issue? 

- I can definitely say that the rating issue has lead to increase of demand for the company’s services. In the course of this year, a few large companies, which had not used audit services before, turned to us. It is natural that this also concerns other audit companies of the “big six”.

- Following the results of 2007, “Grant Thornton Amyot” realized audit of almost 50% of banks and about 40% of credit organizations. How do the matters stand this year? Is the customer base of your company affected by stirring up of activity of audit companies, which enter the “big four” in the domestic market?

- We have always been active in the banking sector, at least 50% of Armenian banks used and continue using our services. We account our success for the professional team, which is composed of over 20 specialists, who specialize exclusively on banking audit. This advantage allows us preserving appropriate positions in competitive struggle, offering quality audit products and applying flexible price policy.

I would like to also add that banks in other CIS states, in particular, in Russia, Ukraine, Tajikistan, etc. also often use the service of our company’s specialists.

- Recently “Grant Thornton Amyot” announced its plans on realizing an “unprecedented” congress for Armenia on issues of capital market.

- The main goal of the given project is to give our businessmen and managers the opportunity to get better acquainted with the mechanisms and capacities of the capital market. Taking into account the presence of Nasdaq OMX in Armenia and our close contacts, we realize discussions on the possibility to organize a conference, which we plan to carry out in February, 2009. The Union of Armenian Banks, the Ministry of Economy, the Association of Accountants and the Union of Entrepreneurs also participate in preparation works to realize the conference.

We try to set up a platform with the participation of all interested parties, including invited foreign specialists, who have volume work experience in practice.