Who depleted the Armenian economy?

David Stepanyan, Yerevan. Exclusively to Vestnik Kavkaza

“A poor quality of human capital assets, lop-sided development of the financial system, and problems with establishing fair competition are main obstacles for economic development of Armenia.” Considering the fact that these factors clearly reflect the situation in the Armenian economy, it is difficult to call them news. A surprise is an author of the thought – it was voiced by Premier Tigran Sarkisyan.

Sarkisyan who has been heading the government since 2008 and his team took huge efforts to approach the mentioned problems close to a disaster. Before the Sargsyan-Sarkisyan government, the situation in Armenia matched at least some economic norms.

On March 4th Sarkisyan stated that establishing of fair and equal conditions for competition is the main goal of the government; and if the government fails to solve the problem of fair economic competition, its work could be considered a failure.

The question is: why hasn’t the government made a step in the direction since 2008? Instead of complaints about mobility of high-skilled professions, which enables them to migrate as soon as a problem with fulfillment of their potential appears, Sarkisyan could think about establishing of relevant conditions for the fulfillment. However, the government hasn’t made any step for preservation of old jobs and creation of new jobs; moreover, it did its best to boost migration of Armenian citizens from the country, first of all, high professionals in various spheres. The constant growth of taxes, the launching of new indirect taxes, oligopolies which kill medium and small businesses – these are some of factors which encourage human resources outflow. The last initiative by the government, which boosted staff scarcity, was the Defined Contribution Pension System. Thousands of young people who don’t want to fill pockets of bureaucrats embezzling the budget decided to become migrants. IT workers who earn good money in Armenia would earn much more abroad.

However, Sarkisyan who admitted a dead-locked situation in the Armenian economy added that it could be settled only under governmental support. At the same time, Premier means not creating or development of the real sector of economy, which would enable to create new jobs and stop progressive migration, but more financial frauds. For example, “effective redistribution of finances” is considered by Premier as a fundamental goal of the government, connected with development of small and medium businesses. Sarkisyan didn’t mention a reduction of taxes for SMB enterprises.