One of the big businessmen of Armenia told “168 Hours” during an interview that in his opinion, election year 2007 will have a negative influence on Armenian economy. The reason for this was the following: Armenians are going to pay more attention to politics than economy.
Generally, it is proven that elections have a bad influence on the economy of the country. It is expressed by the decline in the indices of stock markets. The same indices (Dow Jones, Nasdaq, etc.) that EuroNews shows a couple of times a day that, unfortunately, nobody pays attention to in Armenia. In any normal country, elections mean uncertainty, uncertainty means risk and risk is one of the main obstacles for investors.
However, no matter how surprising it sounds, the upcoming elections still haven’t reflected on the economy of Armenia. Armenia does not have stock indexes to draw comparisons. Instead, we have other ratings. For example, the Armenian national currency exchange rate usually goes down before the elections. Currently, it is the opposite. The dollar exchange rate has already gone down from the foreseen 357 drams.
Secondly, real estate prices also go down on the threshold of elections. This is also the opposite in Armenia-real estate prices are skyrocketing.
The marks of the economic situation as a whole are rather interesting. Based on the data of the National Statistics Service of Armenia, Armenia’s GDP was 12% in January 2007. In 2006, it was 7.7%. Last year, industry in Armenia declined by 1.3% and went up by 4% this year. The increase of exports for the first month of this year (24%) exceeds that of last year by two-fold (10.5). Basically, it seems as though 2006 could have been the year for elections.
We almost forgot taxes. Head of the State Taxing Service Felix Tsolakyan told “168 Hours” that the big businessmen in the political field will appear on the long list of taxpayers soon enough. So, paying many taxes and finding their names at the top of the list may serve as additional PR for them. The list of big taxpayers for the first trimester will most probably be published in April during the heated pre-electoral campaign. But the opinion of the State Taxation Service head is very close to reality.
So, does this mean that the pre-electoral period doesn’t have a negative influence on Armenian economy? It is hard to say because there are still two months before the elections. Perhaps some say that this is the tranquility before the storm, however there is still no sign that may at least signal a soft fluttering of waves. Of course, if there happen to be any economic flaws at the end of the year, for example, if the growth “is not two-digit”, then that will be explained by election year. But it is rare to see any serious ups-and-downs.
The main reason is perhaps because Armenian economy is worse than it could be and there is no room for casualties. In foreign countries, the businessman supporting the oppositionist will never be afraid that the government will “touch” his business in case the oppositionist candidate doesn’t get elected. The pro-government businessmen also don’t fear that the government will “steal” all they have if the opposition wins. Businessmen support this or that force by first of all taking into consideration the propositions of their plans; in other words, what kind of taxing policy they will have, etc. Armenian reality is much more different, hastier. The businessman does not have the right to commit an error or escape. Armenian public will know about that businessman’s economic crimes and the dark pages of his past on “HayLur” (Armenian News) immediately the day after he makes the announcement to support the oppositionist candidate. As a result, big business in Armenia has grown parallel to the powerful or potential pro-government political parties in order to secure itself. You can take a look at the proportional electoral lists of the Armenian Republican Party, the “Prosperous Armenia” and other parties with the inclinations to come to power and see how many businessmen are included in the lists.
That is comprehensive-businessmen benefit from stability. Stability for them means the re-election of the current authorities. It seems as though the word “election” is not that much of an uncertainty in Armenia, as in normal countries. The authorities have already managed to instill in the minds of the Armenian public that everything is decided beforehand with the certain percentages and that the elections are simply going to be formal. If there is no uncertainty, no risk factor, then there will be no shocks in the economy.
As for “not paying attention to economy” as mentioned above, that expression is conditional. “Paying attention” is like “pressing” the businessman to pay his taxes and many businessmen are ready to refute that “attention”.
In any case, only time will show. There is no sense in making judgments and predictions. Armenia is the type of country that does not fit in with any economic or political standards. In a country where economy grows in two digits but a person may still burn himself due to social conditions, anything is possible; including economic surprises. They say miracles do happen, if you believe in them.