On February 1 the Georgian president Mikhail Sahakashvili made an announcement, which was accepted by our patriot officials aggressively. “It takes a lot of work to teach Armenians that they learn something from Georgia, and we have been able to do that,” said Sahakashvili.
We know about the personal characteristics and eccentric character of the Georgian president mainly due to the Russian media. However, when he says something that is really true, our patriots become aggressive instead of looking for the real reasons. Even more, what the Georgian president said is proven not only by the people that have been to Georgia at least once but by our officials as well. “Now the main obstacles of our development are corruption and bribery. We can speak for the reasons for hours, but our goal is to get rid of it. There are former soviet countries where this problem was solved. Of course they did not cut corruption fully, but they minimized it to the extent that people started to believe in state officials, judges and the police,” said RPA president Serzh Sargsyan during the ceremony dedicated to the 20th anniversary of the party. He means first of all Georgia.
In ten days after Sahakashvili’s announcement the Georgian media published information, which seemed to be the answer to those Armenians who do not believe in what Sahakashvili said. Specifically, the Georgian state register has published information about the number of Armenian businesses operating in Georgia, according to which since January 1, 2010, over 100 companies have been registered in Georgia. 70 out of these companies are limited liability companies, 3 of them are branches and 24 out of them are private entrepreneurs. For a small economy like the Armenian market this is a great number of business emigration. In other words, the Georgian journalists do not exaggerate the situation when they say that this is a “migration of Armenian businesses to Georgia.” Several months ago there were rumors that large businesses may leave Armenia too, and now the media writes that large business owners Hrant Vardanyan and MP Vardan Ayvazyan are going to take their businesses to Georgia. Why do Armenian businesses prefer Georgia? There are formal and a number of other reasons.
As a formal factor let us mention the annually released report “Doing Business” of the World Bank, which classifies the economies based on the level of favorability of starting businesses. Back in the day, our government was proudly speaking about that not only because our rating was rising on the list but because our neighbors were significantly below us with the rates. So what is the situation like according to the last report? As the table shows, Armenia yields to Georgia in almost all the categories except for the dissolution of businesses. Just because of the protection level of investors the foreign investors will definitely chose the neighboring Georgia. The fact that our indices gradually decrease and the indices of the neighboring countries are increasing is no less lamentable. The Doing Business 2011 in a formal aspect is a cause because it mostly classifies the legislative processes. We may have a favorable legislative field and favorable laws for business development but those are not worth anything if are not enforced properly. Here we have the informal factor. Every objective citizen, who visits Georgia, confesses that the Georgians not only write laws about human rights, protection of investors’ rights, corruption and prevention of crimes but also enforce those. The average citizens feel that. And if we add to this that the Georgian market is larger; it has access to the sea, which cuts the transportation costs then it would be surprising to maintain businesses in Armenia and not moving those to Georgia. And especially if we take into account the similarity of Armenians and Georgians the big community of Armenia in Georgia and the frontiers then the Georgian market becomes very attractive to Armenia.
It is also surprising that the Armenian businessmen become very angry about moving their businesses to Georgia. Some people consider it treason to Armenia. However, as they say, the business doesn’t have a soul and flourishes only when preconditions are created for that. Businessmen are not kamikazes. They never wish to damage and decrease their incomes. They want to make sure that their businesses are protected. Let us bring an example. Anybody, who goes to a store to the US, will hardly ever find any clothes made in the US. Most of them are made in China or India. The consumption doesn’t need to worry anything because the quality is no less than of the ones, made in Europe because the production process is in close supervision of the US. In China human labor costs cheaper and the American businessmen prefer to move their businesses to China. It is clear that because of their own interests they open work places in China instead of the US, where the unemployment rate is 9%. But no super patriotic American would ever think to blame the business for such a behavior. Let us mention that the US government is also very calm about this fact. During one of our US meetings we have asked one of the officials of their economic block whether he is not concerned that their production is moved to another country. “No,” he said calmly. He said that instead of production they are focusing on science and innovation. It means that they are always ahead. It is not appropriate to compare to Americans but we shouldn’t forget that we also consider the development of science and investment of innovative methods a priority for us. But even this doesn’t give us much joy because quite recently the Azeris cracked several hundred of Armenian websites. And the Georgians are soon going to produce computers. After this, let our government brag about our centennial culture, our potential, and the plans of becoming regional, international and galactic centers, the ignorance and banality of our neighbors. But the fact that our Armenian business with its oligarchs, who are considered criminals as well, are moving to Georgia, is a real paradox. The businesses strive for legality even more than the government.