Arbitrary rules of the power game drive investors away

The Heritage Foundation’s 2026 “Index of Economic Freedom” report (about 176 countries of the world) is not another statistical report for Armenia, but a sober and unbiased assessment of the policies of the current government.

Armenia, having 67.1 points out of a possible 100, continues to be among “moderately free” countries. At first glance, this can be perceived as stability, but in fact it is a long-term stoppage of progress. For 5 years, Armenia remains in the same group, which means that the government has not been able to ensure any qualitative progress, despite loud announcements about reforms.

Moreover, the increase of 1.7 points recorded in 2026 is not a new achievement, but: a return to the figure recorded more than a decade ago, in 2015. In other words, the policy implemented for years has exhausted the previously accumulated potential: In 2017, Armenia even managed to make the transition to a higher group of “mostly free” countries. In short, the “reforms” trumpeted by the authorities over the last 8 years have not pushed the country forward, but pushed the country back, nullifying the previously recorded progress.

The current authorities will presumably try to rely on the growth of some sub-indices: “trade”, “monetary” or “financial freedom”. But even here the picture is very worrying. For example, the current indicator of “trade freedom” (75.0 points) exceeds only the indicators of the previous five years, and before such a low result was last recorded in 1999. It is simply frivolous to talk about any structural progress here.

At the same time, more importantly, indicators of a systemic nature remain highly problematic. The level of “freedom of labor” is significantly inferior to the indicators of 2007-2017, and a result lower than the current value of “investment freedom” was last recorded in 2007. This is a clear signal that the economic environment has lost its attractiveness for both internal and external actors.

However, the most problematic image was formed in the “rule of law” group. Armenia ranks among the “economically oppressed” countries in two fundamental directions: “property right protection” and “effectiveness of justice”, significantly lagging behind the world average indicators. This means that the fundamental conditions necessary for the normal development of the economy are not provided in the country: protection of property, applicability of contracts, independent and efficient judicial system.

In other words, the investor in Armenia does not have sufficient guarantees, the business does not trust the courts, and the citizen does not see the impartial application of the law. And this assessment is made not in the framework of internal political criticism, but in the analysis of an international authoritative structure.

In this context, it is not possible not to mention the state’s seizure of the HEC, the inglorious activities of the “ANIF” fund, as a result of which millions of dollars were lost. these are prime examples of possible developments for investors, which definitely did not escape the attention of the authors of the report.

Forceful and non-transparent interventions by the state towards large economic objects create an atmosphere of uncertainty, where ownership becomes subject to political whims.

The summary is simple․ The political force that came to power with the agenda of economic freedom in 2018 could not only develop, but also preserve the previous achievements. When property is not fully protected, courts are not trusted, and the rules of the game can be changed at any time based on political expediency, the economy cannot be free.

Under these conditions, any “growth” is temporary, and any “success” is fragile. And the problem is not in the indicators, but in the system. Until that system is changed, the regression will continue.

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