Relying on Emigration and Remittances
Naira Hayrumyan
Story from Lragir.am News:
Published: 13:36:08 – 24/09/2011
No international organization has stated yet that Armenia is
overcoming the oligarchic system and monopolization of the economy.
The positive evaluations of the organizations are on the legislative
reform which reduced bureaucracy in business registration. These
evaluations are caused by the isolation of the Armenian banks from the
world’s financial system.
Prime Minister Tigran Sargsyan uses these evaluations as a weapon
against his opponents. He refers everyone who worries about the
economic problems to the evaluations by international organizations
without noting which criteria were evaluated by them.
Leaving aside the political reasons why Armenia is ranked by
international organizations higher now, we will dwell on economic
data.
International organizations hail simplification and higher level of
freedom of registration of business. Anyone in Armenia will tell you
that problems with doing business in Armenia are ue to the dominance
of oligarchs on the market rather than registration. While an ordinary
man can register his business in only three days, he will be denied
access to the market. A whole system of dirty methods of competition
works, ranging from legislative privileges for major businesses to
impeding irrigation or intimidation. Member of Parliament Artsvik
Minasyan, ARF-D, Vice-Chairman of the NA Standing Committee of Finance
and Budget Affairs, for example, thinks that difficulties arise from
preferences given to selected ones.
Has the Armenian economy become more free? Let the prime minister
mention one area which has been de-monopolized or is free for economic
operators. Let him point out an oligarch who has been deprived of tax
and customs preferences.
How many new enterprises opened thanks to these reforms? Has
investment growth been triggered by increased freedom of economic
activities? The National Statistics Service notes investments in
Armenia are a little above zero.
The prime minister says the government’s policy was effective, the
country got over the crisis and is entering a phase of economic
activity. But, the president, apparently, has a different opinion.
Last week, Serzh Sargsyan signed a decree on the formation of a State
Coordinating Council to enhance the efficiency of economic activities
and improve the legislative framework in order to overcome the
obstacles to develop business and the free economy, to simplify public
services and improve the laws.
Apparently, some populist events are to come this autumn. Possible
introduction of differentiated income tax rates is considered, the
Chairman of the NA Committee on Economic Affairs Vardan Ayvazyan
stated.
I wonder why the international agencies suddenly wished to increase
Armenia’s rating: to attract investors or to support the government of
Armenia prior to elections. Levon Ter-Petrosyan thinks the West
supports Sargsyan’s team and so it ignores the rigged election in
2008. Now, instead of a rigged election rigged economic indices are
required. For political reasons, it is not even ruled out that the
foreign debt will be written off.
Charles Sevil, the Director of Fitch Company, expert for Armenia, told
News.am: `Payments of debt will grow in 2012-2013, in addition, the
greatest part of them will be directed to the IMF and other
international organizations. In turn, the IMF debt can be rebuilt.’
So, political issues will be solved but it means that Armenian
citizens will live in an oligarchic country like before, relying, like
Tigran Sargsyan, on emigration and remittances.
In the first 8 months of 2011, physical persons transferred 772
million dollars to Armenia for non-commercial purposes. Compared with
the same period of the last year, we can see that transfers grew by
25%. Statistics also shows, the number of people who left Armenia
during the first 8 months of 2011is equal to the number of people who
left the country during 2010.