SOMETHING OLD, SOMETHING NEW
AZG
26-08-2011
As Armenia’s capital Yerevan takes its first steps towards privatising
key public services, May or Karen Karapetyan tells COURTNEY FINGAR of
his priorities for this ancient city, and his hopes for improvements
in relations with neighbouring countries
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Q.Yerevan is not that well known globally, nor is Armenia generally.
Do you think there is a knowledge gap about what the city has to
offer businesses and how do you intend to raise its profile?
A. It is true that Yerevan and Armenia are little known. But I am
positive that we have a lot to say. I don’t know whether you know
that Yerevan is 50 years older than Rome and Babylon. It is one thing
to say that Yerevan is 2794 years old and another to say that it is
a contemporary of such famous cities as Rome and Babylon. Moreover,
one of our districts, Shengavit, is more than 6000 years old. It is
one of the more extraordinary areas in this region.
Armenia itself is the first Christian state; Noah moored his arc to
Mount Ararat during the floods. I agree that we do not communicate
in the right ways and we are little heard of. So, what should we do
about it? We should use all possible information channels.
The streaming of information nowadays provides great opportunities.
Take the Armenian diaspora, for example. There are two and a half
times as many Armenians living outside the country. They have their
own friends, colleagues and, of course, information channels, be
they diplomatic, diasporan or internet. What the City Hall wants to
do about this issue is to boost the brand awareness of Yerevan. We
want to communicate a range of information, including our history,
business and investments. To do this we have created a new department
that will be responsible for this work. We will be using the services,
support and help of certain organisations to do all this.
It is a fact that if we are little heard of, we are little known
about. If we are little known about, then we are little trusted.
Everything stems from that.
Q. What do you feel are the city’s unique selling points as an
investment destination?
A. Taking into account the current situation, Yerevan is a very
profitable market to invest in. I would say it is a good time to
invest as it is such a fallow market. Which sectors are best to invest
in? Almost all sectors connected with municipal services. It is the
aim of the City Hall team to create the utmost open and fair business
environment. We want to give the sectors that have business logic to
private companies, or to create public-private partnerships. These
sectors include medicine, hotel business, public transport and waste
management.
Moreover, we are ready to pass the management of our state-owned
enterprises to potential investors and partners where there is also
business logic. For example, YerCityLight, City Funeral Bureau, the
underground and City Landscape Gardening planting services. We are
more than sure that this will bring a stream of investments, reduce
the risk of corruption, develop these sectors and produce savings in
our budget. Very often we spend the budget on these sectors not as
correctly or optimally as we should.
These cost savings will let us invest more into those sectors where
there is no business logic, for example, road building, landscape
gardening and the provision of urban amenities. We are currently
implementing this policy intensively. Our main task is to gain
investors’ trust so in the near future we can pass our companies over
to them.
The new department I mentioned earlier is called the Department of
City Development and Investment Projects Support. Its main task is
the creation of a transparent business environment. We are ready
to support our investors and assist them any time they encounter
artificial barriers to business development, whether from a state body,
a monopoly or whoever.
To sum up: in my opinion Yerevan today is really interesting for
businesses, especially foreign ones because the norms of profitability
are very different from those in more established countries. Municipal
management is different from business management because it is
difficult to prioritise. Kindergartens are a priority, road building
is a priority. The solution to one problem could come at the expense
of solving another one. All the problems require a solution now.
Q. What are its weaknesses and what your priority areas for improvement
to make the city more attractive for foreign investors?
A. The fact we are not trusted is our major weakness. This is due
to multiple factors, primarily a lack of awareness. Business is
an environment where money is invested when there is stability and
confidence in the deal.
So our first challenge is to make the world aware of us. Then we must
create the right business environment. We have publicly announced
that we intend to eradicate corruption in the City Hall. I think the
public is already receiving the right signals about the sincerity of
our intentions.
Gaining permits and other documents has been massively simplified. We
cut out a lot of bureaucracy to make City Hall work better. Next,
we have to create an atmosphere in which our team will be motivated
to work towards the same goal. This is the problem that we have to
solve first of all. If we do not, there is the risk that deals will
be done illegally. It is very important for us to know that we are
trusted and this trust should also involve recognition and openness. I
am more than positive that we will be successful in achieving this.
Q. The region in which Armenia sits is one that is underexploited in
terms of business development, trade volumes and foreign investment,
yet in many ways is fragmented culturally and economically. Do you
feel that regional integration is essential to Yerevan’s success,
and to what extent is closer integration possible or even desirable?
A. I consider regional co-operation to be both necessary and
desirable. In our region, there are four countries, two of which we
do not have any diplomatic relations with and this is not good. Our
regional leaders’ understanding of this necessity is not at the
appropriate level.
Are we doing everything to create an environment of regional
co-operation? I don’t think so. Nonetheless, I think that very often
we do much more than our neighbouring countries, but it’s not enough.
We all have to be consistent and should never tire of dealing with it.
Co-operation is essential in all spheres.
Armenia is a small country and its market is so small that producers
should focus not only on internal consumers, but also on external
ones in order to secure a critical mass of sales. In which fields
could there be co-operation? Various ones, such as energy or medicine.
In the field of medicine, we should regionally agree on creating
smaller specialised clinics rather than bigger ones with multiple
specialisations because the market is small.
When I negotiate with potential investors in the field of medicine,
I tell them that they shouldn’t think of Yerevan just as a city
with a population of 1.2 million, but they should also take into
account the neighbouring countries of Iran, Georgia and the south
of Russia. To tackle this issue, the governments, the municipalities
and the businesses need to have the courage to start negotiations.
Before I became the mayor, I headed the gas company of Armenia and
before that the electrical networks company and we were determined
to start trade with Turkey and even with Azerbaijan. I hope you
know about the political problems with our neighbours. They seem to
have more complexes and to be more closed than us in trying to solve
this problem.
Does this mean that we should feel disappointed and discontinue the
attempts? Of course not. Does this mean that we should do it at the
expense of our dignity?
Of course not. It is God’s will for neighbours to live in friendship
and to reach a compromise. One cannot avoid it, one does not choose
neighbours. We need to find an acceptable way of communicating.