Armenia 'has achieved' international recognition of oligopolic government system

Mr. Sargsyan, the head of the WB Office in Yerevan has recently said that Armenian economy needs diversification, which is almost impossible without liquidation of oligopolies. What does such statement mean?

It means, I think, that Armenia "has achieved" international recognition of oligopolic management system. The latest statements by the WB and IMF representatives allow such a conclusion. All this took place against the background of the mess around the Armenian-Turkish railway which many structures pined hopes with, he says. Sargsyan mentions the statement by Aristomene Varoudakis, WB office in Yerevan, saying that economy of Armenia needs diversification, which is almost impossible without rooting out corruption in the tax and customs spheres, creating equal competitive opportunities in the market as well as liquidating oligopolies. It is noteworthy that such international financial organizations like the WB and the IMF and not political subjects were the first to make such statement. They hereby dispelled our illusions that economy of Armenia will began recovering after the 18% decline of GDP. Earlier on October 18 the WB Managing Director Dr. Ngozi Okonjo-Iweala called it senseless pinning hopes for economic progress with opening of the railway from Turkey to Armenia, for the Armenian economy is oligopoly and the Armenian people must do something about it.

What can the people do?

The point is that everyone in Armenia had long ago understood the nature of the administrative construction where the key specific is the phenomenon of dividing the rights and responsibilities between the union of oligarchs and the serving parties as well as the remaining public. The principle of inequality in the country is no secret for anyone. Considering the factor of monopolization of the property and business as well as the key information sources, such construction seems unshakable. That is, the international recognition of the given circumstance last year was quite notable. Armenia is closely connected with financial, political and human rights structures. The relations with Armenia were and are being built also proceeding from this evaluation. It was no mere chance that in the period when the financial crisis affected all the countries in the world, the topic of the “unfair” government system of Armenia proved in the focus of attention of many instances.

Varoudakis also highlighted that Armenia’s foreign debt will reach 50% of GDP by 2011…

Varoudakis also highlighted that Armenia’s foreign debt will reach 50% of GDP by 2011 that indicates the oncoming catastrophe. To redeem the foreign debts Armenia must diversify economy that requires liquidation of oligopolies. This, in its turn, requires political will since many politicians are connected to the heads of those oligopolies with invisible threads. If there is no will, we should prepare for bigger economic problems, such a vicious cycle.

Why the authorities do not understand that?

The whole political economic system in Armenia is a single whole. It would be wrong saying that the incumbent authorities in Armenia were of another opinion of the state of affairs inside the country. After all, Prime Minister Tigran Sargsyan admitted in public yet in early 2009 that the political economic system of the country is oligarchic. However, a year after his statement, Tigran Sargsyan was advised “not to be busy with trifles” and to join the course on neutralization of the claims against the Armenian oligarchy at international financial structures. Well aware of the situation the authorities displayed no desire to correct it. Moreover, they took a course towards misinformation of the public to maintain the administrative construction so favorable to them. They hoped for success of such approach with the launched “Turkish course”. They supposed that the mess around the salvatory Armenian-Turkish relations would overpower the desire to oppose the authorities. Their approach was a success for a half-year, when the radical opposition leaders welcomed the activity of the authorities. Nevertheless, at the end of the current year the Turkish topic lost its effect.

And yet, the authorities will think up something…

The authorities still hope to outplay this situation. In the current conditions, President of Armenia Serzh Sargsyan applied the power centralization mechanism once again having invented nothing new. He convened RPA congress on November 28, having advanced a quite expected thesis saying Armenia needs to form a stable intra-party system. Moreover, he stated that "the changes we can fix inside the party, will be easily designed for the public”. Taking into account the RPA staff, it will be clear that the country has taken a course for further bolstering of the oligarchic system. Therefore, the key figures of the government headed by Prime Minister Tigran Sarkisyan joined RPA. No one has been left in the top echelon to blame big owners for the state of economy in the country.

What can such centralization of power lead to?

The matter is that the situation on the eve of 2010 is extremely critical. Centralization of all the power resources within RPA and attachment of a common status of "RPA member" to all the existing staff is a two-edged sword. In case of another collapse of economy even by partial fall of the national currency, the stake on a stable intra-party system may not pay off since the authorities are more afraid of the political ambitions of their members. In this case, blaming oligopolies for the economic situation in Armenia shake all the echelons of the power. In other conditions no one would resort to toughening the discipline of that camp. If there is no desire and opportunities to save the country, the energy is directed to self-salvation.

By David Stepanyan.