Monopolies in Armenia became a part of state power

Monopolies in Armenia became a part of state power

Armenia is worried about another rise in prices, including prices for food products. Experts believe that prices for goods are dictated by supermarkets as a result of the monopoly economy. Monopolies remain a primary reason for absence  of a real competition in the field of entrepreneurship in the country, and a serious obstacle to the development of the economy, in particular, in the filed of investment attractiveness.

To be fair, it should be noted that Karen Karapetyan's government has made great progress in a number of important indicators. During 10 months of work of the new Cabinet, a steady growth of tax revenues up to 7.6%, the economic growth to 6%, and a significant increase in exports were achieved. However, the work of the government does not have an integrated approach - the promised fight against corruption is not being conducted. The Cabinet members have repeatedly made statements about absence of monopolies in Armenia. However, just a month ago, a serious clash of interests happened between small and medium-sized entrepreneurs and Spaika corporation - Armenia’s largest freighter to the CIS countries and Europe. According to the Armenian press (and this information has not been denied yet) a son-in-law of President Serzh Sargsyan, Mikael Minasyan, is linked to the company.

Small and medium-sized enterprises were forced to take apricots from Russia back to Armenia. According to one of the deputies of the capital's parliament, Araik Arutuyan, Spaika, using its great influence, blocked an opportunity to trade apricots at Russia’s largest wholesale market in Krasnodar for other Armenian suppliers. According to some businessmen, this is not the first time Spaika company behaves so, trying to monopolize Russian market.

In most cases, monopolization is diversified. For example, a number of registered firms engaged in the same business line may exceed 20-30 subjects. But in fact all these companies belong to the same person, though might be registered to his relatives. According to the official documents, 22 companies operate in one of the most monopolized spheres - sugar supplies to Armenia.

It turns out that the largest monopolist in this sphere, the National Assembly deputy from the ruling Republican Party, Samvel Aleksanyan, is not the only sugar importer in Armenia, as he ‘competes’ with 21 companies. According to the official data, 61,554 tons of sugar were imported to Armenia in 2016, of which 58 thousand are accounted for Aleksanyan, which is 95% of all imports. The remaining 5% are distributed among other importers. However, all these companies are managed from one center.

A similar situation has developed in other most monopolized sphere -  bananas import - where the MP from the same ruling party and former head of the Service for Enforcement of Judicial Acts, Mihran Poghosyan is a monopolist. According to the Armenian Time newspaper, the last year a company was created, which like Katherine Group (the company owned by  Poghosyan through a figurehead), imports bananas,  in order to create a semblance of competition. The both companies account for 97.5% of banana imports.

It is unlikely that the government, whose members are confidently pointing to the absence of monopolies in Armenia, do not know the real state of affairs. Moreover, the import of sugar and bananas are not the only areas where monopolists have organized competition. The monopolistic way of the economy became the most important element of the clan-oligarchic power system created in Armenia, which is characterized by merging with business. Such perverse phenomena as corruption, shadow economy, monopolies remain on the political plane. The government can not or does not want to fight deeply against the categories that have become a backbone of the ruling elite.