“The results of the elections won’t change the situation in Armenia”

“The results of the elections won’t change the situation in Armenia”

David Stepanyan, Yerevan. Exclusively to Vestnik Kavkaza

The member of the administration of Armenian All-National Movement, the head of the parliamentary committee on international affairs of Armenia in 1995-1999, the expert of the European Business Association on Investment and Market Access Affairs, Ovanes Igityan, told Vestnik Kavkaza about peculiarities of the investment climate in Armenia ahead of the incoming presidential elections.

-       Armenia went up by 18 points in the rating of the World Bank Doing Business for 2013 – from 50th to 32nd place. Is this rather high place reflecting the real climate established by control bodies for doing business in Armenia?

-       Even the 32nd place in the Doing Business rating is not enough for changing the tendency of reduction of direct investments into Armenia. Only countries which managed to attract investments from abroad were able to cope with the crisis. Even the US which has always had the strategy of investment export, market penetration and increase of a political factor in other states and continents considers attraction of investments into American economy today. It means an importance of direct and indirect investments. The wave of patriotism covered Armenian Diaspora under Robert Kocharyan has gone. A contemporary businessman from Diaspora can be attracted only by certain rules of business, rather than by pressure on his patriotic feelings.

We have to withdraw stereotypes. For example, it is thought that the Armenian market is too small and it is difficult to attract investors here. However, it is obvious that a lot of spheres are waiting for investments, for instance, tourism. The real problem is not the size of the market, but its underdevelopment. Our market is still not regulated enough. Our Association together with the European Commission tried to improve the business-climate of Armenia. But the government often acts as if investors need this more than Armenian economy.

-       So you see no governmental contribution to the promotion of the nvestment attraction of Armenia?

-       The Armenian government deals with accounting rather than with ideology and a strategy of economic development. There are a series of directions which have to be developed by the state in favor of better economy: IT, technoparks across the country. But it is not implemented. Moreover, many consider Armenian economy which is based on private transfers as a developed economic model. The banking system is working for transfers, transfers are spent for goods which provide the budged with taxes. The government doesn’t mind about increase of transfers and, therefore, promotes export of labor forces through recruiting agencies. At the same time, they forget that the historic experience led to development of skills of Armenians and as the result Armenian communities in other countries, despite their paucity, have much more professional specialists and successful businessmen than other ethnic-groups. The state has to plan and divide robbery from development, avoiding robbery projects. Armenia has no lack of money which is confirmed by expenses by our politicians and tycoons abroad.

-       But here we can speak not only about expenses, but also investments…

-       Many of them try to invest into foreign countries because they don’t want to connect their future with Armenia. However, they often fail to invest abroad –they lack knowledge, including language. Their capitals are a dead-weight. At the same time, Kazakhstan which has much more resources is actively developing legislation on regulation of concessional projects and investment security. Few citizens of Kazakhstan invest into foreign economies and prefer investment into their own country. Despite huge volumes of energy resources, Kazakhstan implements the European system of electricity saving, which is much recommended for Armenia importing energy. This sphere is waiting for investments. There is only one obstacle – the Armenian business-climate is too far from European standards. Even the closed border with Turkey is not the point. We shouldn’t encourage a foreign investor to the prejudice of an Armenian investor. Today business depends on whether a businessman has certain contacts, on a bureaucrat who interferes with your business. The role of a person is bigger that the role of the law.

-       Will the results of the presidential elections in February change the situation?

-       I don’t think so, considering the way how Armenia conducts elections. If everything remains the same, we will have no elections in a European, civilized sense in 2013. The visual part of the presidential elections will be presented perfectly. But people will come, throw ballots into ballot-boxes for money or under pressure of the authorities. Today political forces are considered in Armenia as participants of the elections; people forget that the main participant is the society which is absolutely indifferent these days. It is easy to manipulate by a passive society, given presence of money and an administrative resource.

There are a lot of factors which are able to wake the Armenian society up: beating soldiers, murders in army, the crime in Arsnakar, impudence of politicians appointing their children to state positions, weakness of laws. But the waking-up is not happening. As the result the power will get as much votes as it wants.