Usually when any prices for goods are increased we look for the reasons not in market regulations, but in personal relationships between some people. First of all, we try to find out who the main participants and decision makers of those markets are. The most interesting thing here is the fact that usually this increase concerns mostly those goods that have much demand. But these increased prices are not formed in accordance with economical market rules, but rather artificially. In other words, we can say the following in regard to Armenian market regulations: “If there is much demand, the price increase brings to bring super-profit”. This formula concerns the wood market of Armenia too.
A month ago one of my colleagues decided to reconstruct his apartment and bought wood by paying 180 dollars for 1 square meter of wood. Some sellers told him that it was about one month that wood importers hadn’t imported wood in Armenia. Another citizen placed an order for furniture. It was a long time that they hadn’t made it and said that importers hadn’t imported wood yet and it was difficult for them to find it in Armenia. A week ago my colleague bought wood again, but this time for 220 dollars for one square meter of wood. What happened in this one month? Why did they increase the prices for 40 dollars for one square meter of wood?
We were informed by some participants of this market that the state customs service had increased the rate they asked as unofficial payment to them (bribe) and didn’t let people import wood in Armenia. We asked some customs service officials about the reasons that the state customs service didn’t let people import wood, about how many companies imported wood and how much wood they imported, but they didn’t give us any information, claiming that they had no time.
Anyway, we talked to some participants of the wood market and they told us that the main decision makers of this market were General Manvel Grigoryan and Haykaz Baghmanyan. We were also informed that the wife of Manvel Grigoryan, Nazik, played a key role in the market since she had been the head of the environmental protection inspection. Besides these people, there have been other participants in this market too, as well as a businessman known as “Sergey the construction material guy” was involved in this business. Sergey has a lot of shops where he sells construction materials, factories, as well as a wonderful house with carvings and monuments not far from the road of Ashtarak. They also told us that MP Samvel Alexanyan was involved in wood business too. It is said that some decision makers in the upper levels have made a decision to monopolize this field and give the ruling role to Samvel Alexanyan. As for the generals, it is not clear yet as to what kind of compensation they will get. They may not leave this field, but work with Samvel Alexanyan.
There is one more characteristic feature for our domestic business environment: if there is any field that is profitable, some people monopolize it, and at the same time it is done with the help of the state customs service (by making arrangements and sometimes by giving privileges to some businessmen).