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    Categories: 2017

RFE/RL Armenian Report – 06/09/2017

                                        Friday, June 9, 2017

Procurement Fraud `Minimized' By Government


 . Artak Hambardzumian


Armenia - Prime Minister Karen Karapetian chairs a cabinet meeting in
Yerevan, 25May2017.

The Armenian government has sharply cut corruption risks in the
administration of state procurements criticized by anti-graft
watchdogs, a senior Finance Ministry official claimed on Friday.

"We have enacted the kind of legislation that would preclude or at
least minimize such practices," said Sergey Shahnazarian, the head of
a ministry division overseeing procurements by various government
agencies.

"For that purpose a new system was designed and introduced," he told a
news conference. "In my view, it seriously complicates, if not
prevents, the manifestations mentioned by you."

Shahnazarian cited a government-drafted law that came in force in
April. It is meant to make the procurement process much more
transparent and prevent conflicts of interests among officials dealing
with such purchases. If those officials have relatives among private
supplies bidding for government contracts they must formally
acknowledge that fact.

"We now also publicize data on the real owners [of government
contractors,]" said Shahnazarian. "The information is public. You can
see who holds more than 10 percent stakes in which companies."

Prime Minister Karen Karapetian publicly questioned the integrity of
the process just days after taking office in September. He
specifically decried "primitive theft" of budgetary funds set aside
for government officials' travel expenses.

Varuzhan Hoktanian, the program director at the Anti-Corruption Center
(ACC), the Armenian affiliate of Transparency International,
acknowledged that the new law provides for greater transparency in
procurement administration. But he said that it alone will not solve
the problem.

"When there is no will to expedite clean processes, including in the
area of procurements, primitive theft will be placed by more
sophisticated theft," Hoktanian told RFE/RL's Armenian service
(Azatutyun.am).

The ACC has repeatedly charged in recent years that various government
agencies purchased many goods and services at disproportionately high
prices from a handful of companies usually owned by government-linked
individuals. According to it, the government awarded 70 percent of its
procurement contracts without any competitive tenders in 2015.



Dashnaktsutyun `Not Opposed' To Corruption Whistleblowing


 . Ruzanna Stepanian


Armenia - Armen Rustamian, a leader of the Armenian Revolutionary
Federation, speaks at an election campaign rally in Yerevan,
30Mar2017.

The Armenian Revolutionary Federation (Dashnaktsutyun) insisted on
Friday that a parliament deputy representing the pro-government party
was misunderstood by media when he objected to the introduction of a
legal framework for whistleblowing in Armenia.

The lawmaker, Andranik Karapetian, said Armenians must not be
encouraged to report corruption among their superiors or colleagues to
law-enforcement authorities during this week's parliament debates on
this and other anti-corruption bills drafted by the government.

"The institution of whistleblowers does not befit us, Armenians,"
Karapetian said. He said the practice would run counter to
"Armenianness" and spread mistrust between co-workers in the country.

The remarks prompted criticism and ridicule from Armenian media
outlets as well as social media users. Commentators also wondered
whether they reflect Dashnaktsutyun's position.

Armen Rustamian, Dashnaktsutyun's parliamentary leader, claimed that
Karapetian merely warned against reviving the Soviet-era practice of
false denunciations by citizens which was particularly widespread
during Josef Stalin's long rule. "There is such concern because
[whistleblowing] will be introduced for the first time," he said.

"It's just that [Karapetian] used vocabulary that has been the main
theme of the last two days," Rustamian told RFE/RL's Armenian service
(Azatutyun.am). He argued that Dashnaktsutyun's parliamentary faction
voted for this and other anti-corruption measures passed by the
National Assembly this week.

The new mechanism officially called a "system of whistleblowing" will
enable citizens to report corruption cases known to them. They will be
able to anonymously file such reports through a special website.

Dashnaktsutyun holds 7 seats in the 105-member parliament and is
represented in the government by three ministers.



More Armenian Companies To Be Privatized


 . Astghik Bedevian


Armenia - Staff at a post office in Yerevan.

Armenia's parliament allowed the government on Friday to privatize the
national postal service and dozens of other state-run enterprises,
hospitals and recreation facilities.

The National Assembly approved a list of 47 entities subject to
privatization over strong objections voiced by its opposition
minority. Prime Minister Karen Karapetian's cabinet says that they are
in need of serious capital investments which can only be raised from
private sources.

Previous Armenian governments had tried unsuccessfully to sell off
some of these entities. "We hope that we will finally find buyers for
them," Arman Sahakian, head of Armenia's Department of State Property
Management, told lawmakers.

Opposition deputies were particularly critical of the inclusion on the
list of about a dozen medical centers, including the country's main
oncology clinic and a children's hospital in Yerevan. They said
private ownership would only increase the cost of medical services
provided by them.

The children's hospital called the Arabkir Medical Center was for many
years managed by Ara Babloyan, a veteran pediatrician who was elected
parliament speaker last month. Its current director is his son.

Gevorg Gorgisian of the opposition Yelk alliance expressed concern
that Babloyan or his family could benefit from the hospital's
privatization. The speaker affiliated with the governing Republican
Party of Armenia ruled out any conflicts of interest.

The most important business enterprises on the privatization list are
the Haypost postal service and a jewelry factory based in
Yerevan.Haypost has been managed for the past decade by a company
controlled by Eduardo Eurnekian, an Argentinian billionaire of
Armenian descent who has extensive business interests in Armenia. With
some 900 offices across the country, it not only provides traditional
postal services but also collects utility payments and some taxes and
duties, handles wire transfers of cash and even distributes travel
insurance.

Most state-owned Armenian companies were privatized in the 1990s and
early 2000s. The private sector now accounts for more than 80 percent
of the country's Gross Domestic Product.



Press Review



"Haykakan Zhamanak" hits out at a parliament deputy from the Armenian
Revolutionary Federation (Dashnaktsutyun) who decried earlier this
week the introduction of a legal "system of corruption whistleblowing"
on the grounds that it contradicts Armenian traditions. "We are sure
that if this newly elected parliamentarian [Andranik Markarian] had
known how shocking his words will be to people he would have
immediately refrained from uttering them," writes the paper. It says
that the Dashnaktsutyun leadership must enlighten Karapetian on "what
it means to speak from the National Assembly rostrum, who listens to
such speeches and what consequences they may have."

"Aravot" says that Karapetian's remarks may be condemnable but they
reflect a widely held belief in Armenia. "Although in theory we,
critics, disagree with Andranik, in real life we usually do what the
deputy described," editorializes the paper.

"Zhoghovurd" reports that the U.S., Russian and French co-chairs of
the OSCE Minsk Group will arrive in Yerevan on Saturday at the start
of a fresh tour of the Nagorno-Karabakh conflict zone. "The Karabakh
peace process has slowed down of late," writes the paper. "The last
major meeting took place in April in Moscow at the level of foreign
ministers. Although there was talk of a meeting of the [Armenian and
Azerbaijani] presidents there are still no agreements to that
effect. The reason for the slowdown is not only Azerbaijan's refusal
to fulfill [confidence-building] agreements reached in Vienna and
Saint Petersburg [last year.] There is also another, more important
reason." It notes that Russian Foreign Minister Sergey Lavrov said the
other day that the parties continue to disagree on "small but very
important details" of a settlement favored by the mediators.

"One of the details applies to the [proposed] referendum on Karabakh's
status: its dates and the circle of eligible participants," continues
"Zhoghovurd." "Indeed, these are small but very important details."

"Hraparak" claims that Gevorg Kostanian, Armenia's former
prosecutor-general and current representative to the European Court of
Human Rights (ECHR), has warned against a lawsuit filed against an
Armenian civic activist by 30 school principals who were tricked into
admitting that they are campaigning for the ruling HHK in recent
parliamentary elections. The paper says Kostanian warned the
authorities that the ECHR could eventually rule against them if the
activist, Daniel Ioannisian, is fined by Armenian courts. "But the
supporters of organizing a judicial show prevailed and received the
supreme leadership's go-ahead," it says.

(Tigran Avetisian)

Reprinted on ANN/Armenian News with permission from RFE/RL
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