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ANALYSIS: GOVERNMENT OFFERS "LEVEL-PLAYING FIELD" TO BUSINESSES AMID LINGERING SKEPTICISM
Analysis | 16.05.14 | 10:08
Photo: www.gov.am
By Sara Khojoyan
ArmeniaNow reporter
No matter how much Armenia's newly appointed prime minister and his
government declare that equal conditions for the business environment
will be applied from now on, experts and ordinary citizens continue
to feel skeptical about the genuineness of the intention based on
previous experience.
On Wednesday Prime Minister Hovik Abrahamyan held a closed-door
meeting with more than 100 top business leaders of the country. At
the session of his Cabinet the following day, he said that during
that meeting he discussed with businessmen and top bankers numerous
issues regarding cooperation and setting the "rules of the game".
"We agreed that we all need to work in a level-playing field and
everyone should do everything to come out of the shadow. This was
our condition. Before July 1, we will give an opportunity for them to
start working in a level-playing field of their own volition," said
the prime minister, instructing the finance minister to oversee the
"maintenance of the rules of the game".
Abrahamyan also stressed that the problem is very clear and that the
government will be consistent. "If they fail to do so, we will also
try to use our leverage in order to be able to solve the problems we
are facing."
International financial institutions in various reports in recent
years argued that Armenia lacks competitiveness and the shadow part
of its economy is quite sizable.
Last fall the World Bank published a study, saying, for example,
that Armenia's economy has the highest degree of monopolization
among the former Soviet Union and Eastern European countries, with 20
percent of the economy being in the hands of businessmen-politicians
and oligopolies and monopolies controlling nearly two-thirds of the
country's economy.
According to the International Monetary Fund's recent study, the level
of Armenia's shadow economy is the highest as compared to five other
former Soviet states, including Armenia's neighbors. Thus, if the
shadow economy in Armenia makes an estimated 35 percent of the GDP,
in Georgia it is about 30 percent and in Azerbaijan - 31.5 percent.
The opinions of most experts in Armenia little differ from those of
international organizations. Political analyst Armen Grigorian says
the "pseudo-campaign" against oligarchy in Armenia began still under
the previous government of Tigran Sargsyan.
"But that wasn't a campaign against the oligarchy, but rather an
attempt to concentrate economic resources in the hands of one person,
i.e. [president] Serzh Sargsyan. As a result, the economy went through
a decline and appeared in a very difficult situation."
In Grigoryan's opinion, a competitive field is not in the interests of
Sargsyan, because this way he may lose control over economic resources,
and that is a challenge to the constitutional reforms.
"They may ensure some formal competition for businesses that are
not under their control at this point, and that may become a tool
for taking control of their resources," Grigoryan told ArmeniaNow,
adding that Sargsyan would eventually not go against those who have
supported his continued stay in power.
Officials in Armenia routinely deny being engaged in business or using
public office for promoting the business interests of their families
and close associates.
http://armenianow.com/commentary/analysis/54418/armenia_government_businesses_meeting_prime_minist er_hovik_abrahamyan
Analysis | 16.05.14 | 10:08
Photo: www.gov.am
By Sara Khojoyan
ArmeniaNow reporter
No matter how much Armenia's newly appointed prime minister and his
government declare that equal conditions for the business environment
will be applied from now on, experts and ordinary citizens continue
to feel skeptical about the genuineness of the intention based on
previous experience.
On Wednesday Prime Minister Hovik Abrahamyan held a closed-door
meeting with more than 100 top business leaders of the country. At
the session of his Cabinet the following day, he said that during
that meeting he discussed with businessmen and top bankers numerous
issues regarding cooperation and setting the "rules of the game".
"We agreed that we all need to work in a level-playing field and
everyone should do everything to come out of the shadow. This was
our condition. Before July 1, we will give an opportunity for them to
start working in a level-playing field of their own volition," said
the prime minister, instructing the finance minister to oversee the
"maintenance of the rules of the game".
Abrahamyan also stressed that the problem is very clear and that the
government will be consistent. "If they fail to do so, we will also
try to use our leverage in order to be able to solve the problems we
are facing."
International financial institutions in various reports in recent
years argued that Armenia lacks competitiveness and the shadow part
of its economy is quite sizable.
Last fall the World Bank published a study, saying, for example,
that Armenia's economy has the highest degree of monopolization
among the former Soviet Union and Eastern European countries, with 20
percent of the economy being in the hands of businessmen-politicians
and oligopolies and monopolies controlling nearly two-thirds of the
country's economy.
According to the International Monetary Fund's recent study, the level
of Armenia's shadow economy is the highest as compared to five other
former Soviet states, including Armenia's neighbors. Thus, if the
shadow economy in Armenia makes an estimated 35 percent of the GDP,
in Georgia it is about 30 percent and in Azerbaijan - 31.5 percent.
The opinions of most experts in Armenia little differ from those of
international organizations. Political analyst Armen Grigorian says
the "pseudo-campaign" against oligarchy in Armenia began still under
the previous government of Tigran Sargsyan.
"But that wasn't a campaign against the oligarchy, but rather an
attempt to concentrate economic resources in the hands of one person,
i.e. [president] Serzh Sargsyan. As a result, the economy went through
a decline and appeared in a very difficult situation."
In Grigoryan's opinion, a competitive field is not in the interests of
Sargsyan, because this way he may lose control over economic resources,
and that is a challenge to the constitutional reforms.
"They may ensure some formal competition for businesses that are
not under their control at this point, and that may become a tool
for taking control of their resources," Grigoryan told ArmeniaNow,
adding that Sargsyan would eventually not go against those who have
supported his continued stay in power.
Officials in Armenia routinely deny being engaged in business or using
public office for promoting the business interests of their families
and close associates.
http://armenianow.com/commentary/analysis/54418/armenia_government_businesses_meeting_prime_minist er_hovik_abrahamyan