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ARMENIA: ECONOMIC POLICY IN STALEMATE
Vestnik Kavkaza, Russia
March 10 2014
10 March 2014 - 1:27pm
Susanna Petrosyan, Yerevan, exclusively for Vestnik Kavkaza
The monopolistic nature of the Armenian economy based on the
clan-oligarchic regime has been encountering obvious problems. Despite
the assurances of Prime Minister Tigran Sargsyan that a fair
competitive atmosphere was the priority for the government in order
to achieve economic growth, the government is in fact busy serving
the interests of the few dozen families that form the ruling elite.
Monopolization of the economy has become an even more distinct tendency
in the last six years. About 3,000 small and medium-sized shops have
closed down in the last three years.
Vaagn Khachatryan, an economic expert, says that Serzh Sargsyan is
trying to concentrate all the economy on himself and his supporters.
He is doing all he can to centralize the economy. There were clear
monopolization tendencies in certain sectors before, but people
still had an opportunity distribute them between medium-sized and
large businesses. All the basic sectors of economy and trade have
been monopolized: gasoline, diesel fuel, imports of jet kerosene,
sugar, mining.
Grant Bagratyan, an ex-Prime Minister, denied the existence of any
formal restrictions on other importers, but everyone knows that
any attempt to break the unofficial monopoly would be punished with
problems in customs offices and other administrative offices. Thus,
no one wants to get into this trouble.
Such situation aggravates unemployment, poverty and migration.
According to official data, 246,000 people have left the country
in the last six years. Poverty and migration reduce consumption of
goods and services. According to the National Statistical Service,
consumption of bread, meat, eggs and sugar dropped in 2013.
Consumption of electricity dropped by 4.1% in 2013, sales at markets
and fairs dropped by 34.5%.
Negative developments can also be seen in the tax policy. It would
be logical to see the government demonopolizing the economy and
developing small and medium-sized businesses. Specialists suppose that
the country needs tax reform to stimulate business and impose higher
taxes on the rich. But this needs the political will of the government.
The authorities are forced to fill breaches in the budget with new
schemes to leech more money from ordinary citizens. "The creativity
of the government is boundless, every day is a new trick to get into
the pocket of its own citizens: rising fees for gas and electricity,
implementation of compulsory car insurance, parking-meter zones and
accumulative pensions. This means that the government needs money,
a lot, and now," Vaagn Khachatryan expresses confidence. In his view,
pension funds are the easiest way to find finances.
These steps have provoked social resistance. The government,
in its attempt to protect the interests of large monopolies with
"serious political powers and individuals," as they are called by
Levon Zurabyan, Vice Chairman of the Armenian National Congress
(opposition), has reached a stalemate.
From: Emil Lazarian | Ararat NewsPress
Vestnik Kavkaza, Russia
March 10 2014
10 March 2014 - 1:27pm
Susanna Petrosyan, Yerevan, exclusively for Vestnik Kavkaza
The monopolistic nature of the Armenian economy based on the
clan-oligarchic regime has been encountering obvious problems. Despite
the assurances of Prime Minister Tigran Sargsyan that a fair
competitive atmosphere was the priority for the government in order
to achieve economic growth, the government is in fact busy serving
the interests of the few dozen families that form the ruling elite.
Monopolization of the economy has become an even more distinct tendency
in the last six years. About 3,000 small and medium-sized shops have
closed down in the last three years.
Vaagn Khachatryan, an economic expert, says that Serzh Sargsyan is
trying to concentrate all the economy on himself and his supporters.
He is doing all he can to centralize the economy. There were clear
monopolization tendencies in certain sectors before, but people
still had an opportunity distribute them between medium-sized and
large businesses. All the basic sectors of economy and trade have
been monopolized: gasoline, diesel fuel, imports of jet kerosene,
sugar, mining.
Grant Bagratyan, an ex-Prime Minister, denied the existence of any
formal restrictions on other importers, but everyone knows that
any attempt to break the unofficial monopoly would be punished with
problems in customs offices and other administrative offices. Thus,
no one wants to get into this trouble.
Such situation aggravates unemployment, poverty and migration.
According to official data, 246,000 people have left the country
in the last six years. Poverty and migration reduce consumption of
goods and services. According to the National Statistical Service,
consumption of bread, meat, eggs and sugar dropped in 2013.
Consumption of electricity dropped by 4.1% in 2013, sales at markets
and fairs dropped by 34.5%.
Negative developments can also be seen in the tax policy. It would
be logical to see the government demonopolizing the economy and
developing small and medium-sized businesses. Specialists suppose that
the country needs tax reform to stimulate business and impose higher
taxes on the rich. But this needs the political will of the government.
The authorities are forced to fill breaches in the budget with new
schemes to leech more money from ordinary citizens. "The creativity
of the government is boundless, every day is a new trick to get into
the pocket of its own citizens: rising fees for gas and electricity,
implementation of compulsory car insurance, parking-meter zones and
accumulative pensions. This means that the government needs money,
a lot, and now," Vaagn Khachatryan expresses confidence. In his view,
pension funds are the easiest way to find finances.
These steps have provoked social resistance. The government,
in its attempt to protect the interests of large monopolies with
"serious political powers and individuals," as they are called by
Levon Zurabyan, Vice Chairman of the Armenian National Congress
(opposition), has reached a stalemate.
From: Emil Lazarian | Ararat NewsPress