The “Caucasian tiger” is an adjective used to describe Armenia’s status in the region and the picture shown during the seminar organized by the local specialists of the World Bank was rather diverting. One of the participants stated that he is not in favor of naming Armenia the “Caucasian tiger”, which is part of the cat family. However, he says that the only similarity between the tiger and the cat is that both fall on four feet.
The main speaker, World Bank adviser Bart Kaminski, made a correction immediately: Armenia is a tiger, but small in size-corresponding to the country’s size.
There are still some finishing touches to be made to the report on Armenia and it will be published in June. The title is: “Armenia-the “Caucasian tiger”: Politics for maintaining growth.” However, the title may change.
The report consists of two parts: the first part presents the developments of the past five years, while the second part focuses on the future predictions and some obstacles that may come in the way of economic development.
One of the positive things stated in the report is the low level of inflation, the economic growth, and the rise in foreign investments. Mr. Kaminski believes that specialists shouldn’t underestimate the role that diamond production plays in exportation of products. According to the speaker, Armenia takes advantage of its foreign relations by exporting products in the following three fields: diamond, alcohol production as well as software. Based on studies conducted by the WB, the number of diamond products being exported has gone down after 2003, but exportation has gone up.
The report also states that there is competition in the textile industry, but that this field faces some obstacles. Armenian economists don’t agree with this because they believe that the Armenian textile industry has a long way to go before it gets recognized in the international market. It will be very difficult for the industry to get to the point where it actually competes with Chinese products.
Mr. Kaminski also focused on the main issues, which may have a negative impact on Armenia’s economic development. For example, issues concerning transportation and customs. Let’s recall that recently, during the international anti-corruption conference at the National Assembly, MP Tatul Manaseryan sharply criticized Armenia’s customs points. He based his opinions on the evaluations given by the WB, particularly stating that 46 of every 100 dram paid to the customs point is bribe.
During an interview with “168 Hours”, foreign relations correspondent for the WB Yerevan branch Vigen Sargsyan said that those evaluations are actually stated in the WB report, but are in the past. The new report also touches upon this, however there still are no details.
WB specialists don’t think it’s good to see business and politics developing at the same rate, in other words, the fact that businessmen and political figures have a major influence in the country nowadays. However, they do also state that this exists even in developed countries, for example Italy with its prime minister Berluskoni.
Another thing mentioned in the report is that the committee on competition defense, which was supposed to solve many issues, is not working effectively. The law is not being applied and the committee’s analyses are not good enough.
One of the major problems facing Armenian economy is, of course, the problem with accrediting. Many projects that have an outlook may not even start getting implemented due to the fact that there is no financing in the country. But Armenia places high in starting businesses easily, higher than even some member countries of the European Union.
During the seminar, it turned out that the Armenian economists hadn’t come to listen to appraisal of Armenia’s economy. As one economist stated, different organizations come, conduct studies, decide which courses to take, confirm them with the government and that practically doesn’t have an impact on business. We shouldn’t “create illusions and then have those illusions be confirmed by the government.”
The director of the WB Armenian branch Roger Robinson agreed with this and even confessed:
“I am an economist and I used to believe in the theory of the advantages that relations have about 15-20 years ago. However, I don’t believe in that now. Business always surprises us economists.”
Mr. Kaminski stated the fact that the WB is not focusing on just one field, but rather is covering all fields of economy. In that case, how come the WB hasn’t drawn its attention to the IT field in Armenia? True, they talk about keeping the level of programming high, but that still doesn’t mean development. Orders come from offshore countries and Armenians only get salaries. We can’t really consider this an achievement. Meanwhile, years ago the government had declared the IT field as the major field and that was it-nothing serious happened after that. As a result, Armenia places 86th in the index of 115 countries with network readiness as stated in the “2005-2006 IT world report”. Armenia has even placed below Azerbaijan. That index simply shows the development of the IT field in each country.
“They showed us where we stand with that index,” said one of the participants.
In general, you got the impression that Armenian economists were not really taking the WB report seriously or hiding something. The main thing is that we Armenians don’t know what we want-are we going to turn into an influential country, industrial or a country that provides services? Sometimes they try to steer us in the right direction, but it doesn’t always turn out to be right.
Despite the rest of the topics, all participants agreed on one thing: they are not paying enough attention to the level of university education. Some fields are in the center of attention, but the country will need specialists to work in those fields in the future.
President of the Armenian Industrialists and Businessmen Union Arsen Ghazaryan advised the WB specialists to consult with Armenian economists before preparing a report and plan out better ways of getting the government’s confirmation.
Bart Kaminski said that they have everything planned out, but some things are kept confidential. All we have to do is wait and see what the World Bank will say about Armenia this time and how our “tiger” image will change.