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'SERIOUS' ARMENIAN BUSINESS PROJECTS
Vestnik Kavkaza, Russia
Nov 19 2013
19 November 2013 - 12:22pm
By David Stepanyan, Yerevan. Exclusively for Vestnik Kavkaza
Mark Davis, head of the Yerevan of the European Bank for Reconstruction
and Development (EBRD), said that investments of the EBRD in Armenia
in 2013 could exceed the 90 million euro invested in 2012. The volume
in 2014 has not been set yet, but the bank plans to invest as much
as possible in new and interesting projects.
The EBRD has been one of the largest investors in Armenia since 1994.
Eurobank has invested 652 million euro in Armenia for realization
of 123 programs. The EBRD has focused investments in small and
medium-scale business, agriculture, services, construction, production,
mining industry and energy. According to Davis, agricultural programs
of the EBD could be expanded because the field was especially
important in Armenia and had perspective and promising business
projects to offer.
The government of Armenia does all that its modest authority can
to encourage the EBRD, although developing no promising projects,
for example, in the agricultural field. Instead, it implements new
multifunctional cash registers. This innovation of the Committee for
State Incomes will cost Armenian economic subjects 367,000 drams, or
$900. The 'dire need' for implementation of the new cash registers
has not surprised anyone in the long-suffering economic subjects,
considering the fact that they are being replaced for the third time.
Curiously, people who are both willing and unwilling to get the
registers will have to buy them at the Office for Implementation of
Cash Registers. Rumours say that the organization belongs to Armenian
Prime Minister Tigran Sargsyan who is notable for his aptitude of
having offshore accounts on the Cyprus and appetites for easy money.
European financial experts cannot miss the vain attempts of the
Armenian government to 'assist' the efforts of Eurobank. The money
continues to flow to Armenia under some unexplained logic. However,
Armenian citizens these days no longer trust the government or the
EBRD, according to social polls of Gallup. Its report says that 74%
of Armenians regard the state management system as corrupt. Economists
making the analytical report of the US non-commercial organization
Policy Forum Armenia in the Armenian community of the US believe that
influence of corruption on Armenian economy is enormous. For instance,
additional expenses of large companies caused by corruption, in other
words, 'bribes', total 5% of annual sales, the highest rate among
countries studied. It undermines the competitive ability of companies.
Moreover, the public policy is developed and realized mainly to serve
interests of the corrupt elite, rather than Armenian citizens. It
appears that forced sales of cash registers brought by a state
functionary was just a small example reflected in the Policy Forum
Armenia. The list of corrupt officials keeping posts for many years
says that the new initiative could be taken as a childish frolic
of the prime minister. Ex-President Robert Kocharyan, ex-Minister
for Natural Resources Vardan Ayvazyan, Speaker of Parliament Ovik
Abramyan, head of the State Committee for Taxes and Customs Gagik
Khachatryan are just a few names of the list.
Tigran Sargsyan has recently admitted dropping the economic rate in Q4
2013. Though the 'official' economy demonstrated a growth rate of 3.2%
in the first three quarters and good results in certain field. The EBRD
should have wondered why the GDP growth was fading. The fact that no
such considerations were made proves the politicized activities of
the organization in Armenia.
The list of Armenia's top 1000 tax-payers published in late October
cannot be left without questions either. The structure of the list
demonstrated a high density of tax burden in the economy. The first
50 companies paid about 240 billion drams to the state budget in
the first three quarters of 2013, exactly half of all the taxes paid
by the 1000 names in the list. 62% of all the taxes paid by the top
1000 belonged to the first 100 names in the list, the last 100 names
paid only 1.6%. Such polarization in the structure of tax payments is
very risky for economy. Considering the small tax role of companies
belonging to indirectly affiliated with the government, distribution
of tax pressure in the top 1000 list gave European financial experts,
who were planning to invest millions of dollars in the 'liberalized'
economy of Armenia, some food for thought.
Vestnik Kavkaza, Russia
Nov 19 2013
19 November 2013 - 12:22pm
By David Stepanyan, Yerevan. Exclusively for Vestnik Kavkaza
Mark Davis, head of the Yerevan of the European Bank for Reconstruction
and Development (EBRD), said that investments of the EBRD in Armenia
in 2013 could exceed the 90 million euro invested in 2012. The volume
in 2014 has not been set yet, but the bank plans to invest as much
as possible in new and interesting projects.
The EBRD has been one of the largest investors in Armenia since 1994.
Eurobank has invested 652 million euro in Armenia for realization
of 123 programs. The EBRD has focused investments in small and
medium-scale business, agriculture, services, construction, production,
mining industry and energy. According to Davis, agricultural programs
of the EBD could be expanded because the field was especially
important in Armenia and had perspective and promising business
projects to offer.
The government of Armenia does all that its modest authority can
to encourage the EBRD, although developing no promising projects,
for example, in the agricultural field. Instead, it implements new
multifunctional cash registers. This innovation of the Committee for
State Incomes will cost Armenian economic subjects 367,000 drams, or
$900. The 'dire need' for implementation of the new cash registers
has not surprised anyone in the long-suffering economic subjects,
considering the fact that they are being replaced for the third time.
Curiously, people who are both willing and unwilling to get the
registers will have to buy them at the Office for Implementation of
Cash Registers. Rumours say that the organization belongs to Armenian
Prime Minister Tigran Sargsyan who is notable for his aptitude of
having offshore accounts on the Cyprus and appetites for easy money.
European financial experts cannot miss the vain attempts of the
Armenian government to 'assist' the efforts of Eurobank. The money
continues to flow to Armenia under some unexplained logic. However,
Armenian citizens these days no longer trust the government or the
EBRD, according to social polls of Gallup. Its report says that 74%
of Armenians regard the state management system as corrupt. Economists
making the analytical report of the US non-commercial organization
Policy Forum Armenia in the Armenian community of the US believe that
influence of corruption on Armenian economy is enormous. For instance,
additional expenses of large companies caused by corruption, in other
words, 'bribes', total 5% of annual sales, the highest rate among
countries studied. It undermines the competitive ability of companies.
Moreover, the public policy is developed and realized mainly to serve
interests of the corrupt elite, rather than Armenian citizens. It
appears that forced sales of cash registers brought by a state
functionary was just a small example reflected in the Policy Forum
Armenia. The list of corrupt officials keeping posts for many years
says that the new initiative could be taken as a childish frolic
of the prime minister. Ex-President Robert Kocharyan, ex-Minister
for Natural Resources Vardan Ayvazyan, Speaker of Parliament Ovik
Abramyan, head of the State Committee for Taxes and Customs Gagik
Khachatryan are just a few names of the list.
Tigran Sargsyan has recently admitted dropping the economic rate in Q4
2013. Though the 'official' economy demonstrated a growth rate of 3.2%
in the first three quarters and good results in certain field. The EBRD
should have wondered why the GDP growth was fading. The fact that no
such considerations were made proves the politicized activities of
the organization in Armenia.
The list of Armenia's top 1000 tax-payers published in late October
cannot be left without questions either. The structure of the list
demonstrated a high density of tax burden in the economy. The first
50 companies paid about 240 billion drams to the state budget in
the first three quarters of 2013, exactly half of all the taxes paid
by the 1000 names in the list. 62% of all the taxes paid by the top
1000 belonged to the first 100 names in the list, the last 100 names
paid only 1.6%. Such polarization in the structure of tax payments is
very risky for economy. Considering the small tax role of companies
belonging to indirectly affiliated with the government, distribution
of tax pressure in the top 1000 list gave European financial experts,
who were planning to invest millions of dollars in the 'liberalized'
economy of Armenia, some food for thought.