Thursday, February 18 2016 15:45
Emmanuil Mkrtchyan

International Labour Organization`s National Report data poorly correlate to achievements of Armenian Government

International Labour Organization`s National Report data poorly  correlate to achievements of Armenian Government

ArmInfo.  The data of the International Labour Organization's National Report poorly correlate to the achievements reported by the Armenian Government, Gagik Makaryan, President of the Republican Union of Employers of Armenia (RUEA), said at today's conference when presenting the National Report "Enabling Environment for Sustainable Enterprises" prepared jointly by the International Labour Organization (ILO) and RUEA.  

A total of 300 heads of various companies were interviewed. 63.3% of the companies have been operating for over 5 years. The main focus groups were presented by the companies engaged in tourism, lodging industry, trade, public catering, IT business. The companies which have actually frozen their activities were also interviewed. The survey covered a variety of areas, such as corruption perception, effective management, stable energy supply, business environment development, standards and certification, fair competition, personnel 
training, financial services/access to financing, etc. 
 
Makaryan said that the findings of the survey have proved to be rather distressing. More than half of the respondents feel the direct impact of high corruption on their work, and 60% of the respondents do not even know that Armenia has structures, which must combat 
corruption. 60% feel the negative effect of the inflation, and 41% of the respondents said that the Government fails to create the necessary legal framework for development of entrepreneurship.  38% stressed that the high level of shadow informal economy seriously 
hinders fair competition. At the same time, almost 37.7% of the respondents stressed that the financial system in the country is unable to serve the needs of small and medium businesses.  Makaryan explains that the loan rates are high and the financial technologies are not developed well enough. Almost 40% of the respondents said that they finance their business development at their own expense, however, the reduction in the companies' profitability will shortly result in even bigger drop of internal investments. At the same time, the improper training of specialists at the Armenian universities also influences the quality of the business environment - over 70% of the respondents are discontent with the professional level of the 
personnel. 
 
The ILO report also analyzes the comparative indicators for several countries. Armenia lags behind Croatia and Latvia in terms of political stability and lack of enforcement. It lags behind Croatia, Latvia, Georgia and Macedonia in terms of corruption perception index. The country demonstrates low results in terms of control over corruption. Armenia also lags behind the specified countries in terms of trade and economic integration. Makaryan thinks that the official data of the Armenian companies' expenditures for export of 1 container of products that cost 1,885 USD in 2014 are underreported. 
 
The RUEA President stressed that the survey findings and the actual condition of thebusiness environment in the country have nothing to do with the position (35th position - editor's note) of Armenia in the WB Doing Business rating. The priority should be given to what conditions are created for business rather than within how many days a company can be registered. This is why, Makaryan said, about 30% of the registered SMEs in Armenia have actually frozen their activities. This means a $300 mln loss in the GDP, he said.
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