The “Competitive Armenia in the Private Sector” program funded by the USAID is aimed towards showing the path that Armenia has to take in order to develop along with other developed countries. The program correspondents say that the only solution is to provide stable economic development, which will be possible by encouraging competitiveness. The program has started since 2005.
There are a couple of million dollars for the project implementation for the next three years and the correspondents will think about the future amounts later. They have chosen two sectors for this program-the IT and tourism sectors. Currently, they are thinking about including one more field-pharmacology or greenhouse economy. During a press conference, the correspondents presented their theoretical knowledge, which is necessary for the companies to raise their level of competitiveness and which is not really applied in Armenia.
So, what is competitiveness, quality products, newness, or natural resources? Of course, the abovementioned is necessary, but not enough for competitiveness. According to CAPS experts, it’s necessary to raise the level of productivity and the capability to satisfy the demands of consumers in order to reach competitiveness. Vice-director of CAPS Artak Melkonyan presented the structure of competitiveness, which consists of the following: distinguishing profitable markets, increases in the prices for products and services, which will be different from the proposals made by competitors, and the effective presentation of the distinguished products to the most profitable consumers. This structure is somewhat acceptable by Armenian businessmen. However, the Armenian businessmen will be surprised to hear from the experts that the “special attention of the officials towards private businesses” is not necessary for competitiveness. Any average or even businessman citizen of Armenia will find it impossible and even ridiculous to hear that it’s not necessary to have the support of the government officials or the Armenian authorities to start the business of importing sugar, butter, meat, construction materials or petroleum. If anyone tries to convince, the average citizen or businessman will simply think that that person is crazy or think that the person saying that is a government official who’s just making that announcement for the press or international organizations.
Recently, the Economic Competitiveness Protection Commission of Armenia found out that a new company, “Salex” Group”, has risen to the top in sugar imports. Last year, “FlitFood” was the monopolist. At first sight, you may think that as a result of honest competitiveness and probably by going along with the necessary conditions of CAPS, “Salex Group” has surpassed “FlitFood” in sugar imports, especially since that isn’t prohibited by Armenian legislation. But then it turned out and was printed in the press that the two companies actually belong to one National Assembly deputy-Samvel Alexanyan. The latter had simply split the sugar import business into two parts and transferred the major part over to the newly founded “Salex Group” company. This, of course, is based on business motives and it’s a different topic. I would just like to say that this was not a result of the healthy competition standards for stable economic competition or the standards proposed by the American company. On the contrary, this is aimed towards providing the sugar importer with huge profits developing at a steady pace. It’s quite possible that “FlitFood” took over the sugar importing business before “Salex Group” as a result of the same “healthy” competitiveness, but once again on the account of another business belonging to Samvel Alexanyan. This is the same in almost all fields.
Meanwhile, according to CAPS, if competitiveness is the roof, then the non-stable bases are the “special attention of officials towards private companies, the currency exchange rates, the low level of inflation”, etc. During the press conference, the speakers said that this program had been successfully implemented in other countries.
“Why can’t Armenia do it?” they ask.
Everything is the opposite in Armenia. As to why Armenia can’t, the Armenian businessmen can answer that question. U.S. experts have noticed that during the past 5-6 years, Armenia has changed positively. They have noticed that there are more paintings being sold at the Vernisage and have come to the conclusion that the living standard of Armenia has improved. They also said that there is shady economy in Armenia, but also said that the reason for that could be that companies don’t know how to compete. So, this is how the CAPS experts are teaching how to be competitive. The problem is that their theoretical knowledge doesn’t fit in with Armenian reality.
Let’s not forget to mention that the CAPS experts have studied the tourism market in Armenia and have come to the conclusion that the tourists visiting Armenia leave satisfied, although hotel prices are higher in Armenia than, for example, Turkey.
“It’s important for Armenia to be competitive compared to its neighbors. The markets for tourism are not selected correctly in Armenia. Armenia must decide what it’s selling and to whom it sells,” says a CAPS expert Alen Saferi. Mr. Saferi also thinks that “Armenia will never become a massive tourism country and doesn’t have to.” But the Armenian authorities, in particular the field correspondents and Armenian President Robert Kocharyan are certain that Armenia will be full of tourists in the next couple of years. Perhaps that’s why they’re building many expensive hotels.
“Armenia has the potential to attract tourists with a lot of money” say the CAPS experts and agree with the Armenian authorities.