Announcement

Collapse
No announcement yet.

Igityan: Only reason why they 'invited' Armenia into the Customs Uni

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Igityan: Only reason why they 'invited' Armenia into the Customs Uni

    Hovhannes Igityan: Only reason why they 'invited' Armenia into the
    Customs Union was to show Europe who wears the pants in the
    post-Soviet area

    ArmInfo's interview with member of the Board of Armenian Pan-National
    Movement Hovhannes Igityan

    by David Stepanyan

    Saturday, February 22, 10:32

    The ruling regime's zeal in adopting more and more unpopular measures
    has put Armenia on the verge of a default, with the only solution they
    offer being the "accumulative" robbery or some ridiculous fines for no
    OMI policy...



    It is very hard to speak of economic component of any issues in
    Armenia, given that the actions of the authorities contain neither
    macroeconomic components nor economic criteria. The bankruptcy of the
    authorities emerges in economy when they stake on indirect taxes and
    take indirect measures to replenish the budget. Imposing indirect
    taxes is the easiest thing today. Look at VAT on the vital foodstuffs,
    it is an additional load on consumers. It is interesting that we do
    not often notice it. If VAT turns insufficient for the budget
    replenishment, the authorities resort to excise tax, additional
    customs duties, property taxes, absurd fines for not having
    third-party liability insurance policy. After all, this burden lies
    heavy on the nation. What we see now in the country means that the
    authorities no longer have any natural methods to replenish the
    budget. Meanwhile 60%-65% of GDP of Germany is the share of SMEs. In
    Japan this indicator reaches nearly 90%. In other developed countries
    the major taxes are profit and incomes taxes - direct taxes collected
    from the real sector of economy. One needs no deep analysis to make
    sure that the Armenian authorities grab hold on the scandalous
    mandatory accumulative pension system to replenish the budget. At the
    latest meeting of Yerkrapah Union of Volunteers, Serzh Sargsyan made
    quite abstract statements, including on the pension reform.
    Nevertheless, the president declared quite sincerely that 'these
    money are necessary for our economy,' Considering that any economy is
    developed at the expense of anything but the government funds, the
    president probably meant the necessity to cover the budget deficit.
    Admitting that the 'authorities spend their political resource' being
    well aware that 80% of the population opposes the pension reforms, the
    president, actually, reaffirmed that the authorities are at the end of
    their tether.



    For many years Armenia was moving towards Europe, was harmonizing its
    laws to European requirements, but all of a sudden, it decided to join
    the Customs Union. Let's talk about this...



    Whenever I ask my colleagues who are in power now about the Customs
    Union, they whisper to me that the Union is a guarantee of
    Nagorno-Karabakh's security. I don't like whispering as I think that
    in the 21st century politics must be open. My belief is that
    Nagorno-Karabakh's security cannot be based on a five-minute whisper
    between Vladimir Putin and Serzh Sargsyan. Security cannot be based on
    personalities, it must be fixed on paper. I doubt that the Customs
    Union will give Armenia economic benefits. Today almost all experts
    say that the growth in customs duties that will follow Armenia's
    joining the Customs Union will result in growing prices inside the
    country. And there is no guarantee that the collected duties will be
    used for our benefit. Part of it will be given in kickbacks, the rest
    will go to those in power. Direct investment of just one billion of
    USD would create at least 50,000-60,000 in Armenia and would make
    solvent almost 1/4 of the local population. Nobody seems to care
    though. They look to be happy enough at having just $3,000 per capita
    GDP and $4bln national budget.



    Customs Union membership does not seem to imply independent
    investments in Armenia - unless they are politically motivated...



    The Armenian authorities hope that Russia will grant their request to
    exempt from customs duties as many as 600-800 products imported into
    Armenia but Russia is aware how corrupt they are. Armenia is a pure
    consumer as it produces almost no goods. 30-50% of its population are
    poor. So, well aware of this the local authorities have kept import
    duties low so as to prevent any big growth in the consumer goods
    basket. Russia's economy is based on oil and gas exports and low-tech
    expensive production.



    Do you mean that the only way for the Russians to protect their market
    is to keep their import duties high?



    Yes, I do. Once Armenia joins the Customs Union, it will have to
    accept its home consumer-friendly model, so, it will be a road to an
    abyss for us. The Customs and Eurasian unions are not systematic
    projects. They are based on the personalities of Putin, Nazarbayev,
    Lukashenko and Sargsyan. Should at least one of them quit, the whole
    project may sink - or at least it will continue without Armenia. With
    Europe the Armenian authorities kept feigning commitment to integrate
    in hope that they were smarter than the Europeans. With Russia this
    will hardly work out as it is the Russians who want to see us as part
    of the Customs Union.



    What will be the consequences of growing essentials prices?



    I think this will result in a new wave of emigration. Once the
    consumer goods basket in Armenia grows, the earnings of the several
    hundreds of thousands of Armenia working in Russia will drop and they
    will no longer be able to transfer money to their families in Armenia
    and will prefer taking them to Russia. This may cause a social riot
    but they in the Kremlin do not care as the only reason why they
    'invited' Armenia into the Customs Union was to show Europe who wears
    the pants in the post-Soviet area. Armenia was small fish in this
    game. Russia's key target here were Ukraine and the EU's Eastern
    Partnership program.



    Will it be good for Armenia if Russia becomes even stronger due to its
    Eurasian integration projects?



    The problem is that the Armenian authorities do not think
    strategically. For example, they are not asking themselves if Russia's
    strengthening in the post-Soviet area will be good for them.
    Theoretically, this will not be good for us. Practically, our
    authorities are not even thinking about this. We are consistently
    moving towards self-isolation from both regional and global processes.
    This notwithstanding, we are in a better geo-political situation than
    Azerbaijan and Georgia: Azerbaijan has bad relations with the West and
    Iran, Georgia is at odds with Russia, while we have good relations
    with all the parties. But what our authorities mostly care about is
    how to retain their power - this is the key reason why we are in
    isolation and why our people are becoming increasingly defiant.
    Armenia's relations with Russia are based on bootlicking. As a result,
    we have ceased to be a serious factor for them in the Kremlin. All
    they need to do should any problem arise is just to call Serzh
    Sargsyan.

    http://www.arminfo.am/index.cfm?objectid=7F2AB550-9B93-11E3-9F550EB7C0D21663

Working...
X