If we believe that the figures the official statistics services write or paint are true, we will have the impression that Armenia is in a phase of a rapid economic growth.
According to the statistical services, the growth during the first five months of this year reached 8,8%. This is a very good growth indicator and first of all the businesses should feel the difference as they import and export goods. However, we talked to some businessmen and they are sure that notwithstanding the official statistical information about growth, the small and medium businesses are sinking and the big businesses are flourishing. Big businesses assure that the economy is growing, but the small businesses say that it is the vice versa and there is no growth.
The owner of Vedi Alco company, NA MP Manvel Ghazaryan says that the growth is evident compared to last year. “We can see that both in our company and in our relation with businesses. Both the export is growing and the domestic production is activated as well. Our export capacity has grown too,” said Manvel Ghazaryan. According to the official information, compared to the same period of last year, this year the unemployment rate grew by 1,2%. We asked Mr. Ghazaryan whether the growth of his business has resulted in new openings and vacancies. “The vacancies in our production are mainly constant and this number does not change. There has been a little growth since March,” he said.
Concerning the business environment in Armenia Mr. Ghazaryan said, “It is relatively for everyone because if a businessman wants to develop and grow much, he/she must look for solutions and rely on himself and work. Now the environment is very liberal and there are no subjective conditions. The past years and our experience have taught us to rely on ourselves.”
The director of a large production company in Armenia “Rusal-Armenal” said that their business goes smoothly. Georgi Avetikyan says that the economy is growing. “The economy is growing compared to the last year. We furnished the factory with the most modern facilities to make the production better. Last year we produced 2300 tons while before that we used to produce 1200-1500 tons.
We are exporting almost all of our products because there are no consumers in Armenia.” Concerning new vacancies Mr. Avetikyan said, “There were no new vacancies because after the refurnishing the factory with new facilities the labor is not needed that much as everything is done with machines.”
The owner of Max Group company, NA MP Khachik Manukyan says that in order to speak of 8,8% growth people should first of all compare this growth with the growth of the previous years. After comparing these development rates with the rates of the past two years, it turns out that now the economy is falling. However he says that there is some development, otherwise it would not be profitable to work. He says that the growth in the poultry production is faster as there is no monopoly in this sector and the competition is healthy. “The price of egg is the lowest price in the market, but it does not mean that people are consuming more. If the price is going down, the consumption capacity does not grow. Even if the price is very low, people will not eat 5 eggs instead of 2 eggs. Usually people use the first need consuming products as much as they need,” he said. Mr. Manukian says that the economic growth depends on inflation too and in consideration of the inflation rates of the past year it is clear that the growth of the past year is not so much as it is said to be. “You can’t say that the economy is growing as we are still in a crisis phase because the results of crisis can be overcome in one or two years but not so fast,” said Mr. Manukyan.
The director of Antares company Armen Martirosyan says in the conditions of the tax and customs policy of the Armenian government we can’t even speak of economic growth. According to him, the trade circulation has grown but not the incomes. “If a company does not have an income, it means there is no prospect of development. The prime minister Tigran Sargsyan embezzled our income on March 2, 2009, when the national currency was devaluated rapidly in one day. We are selling the products for the same prices but the imported goods are more expensive. It is very hard to work in Armenia in such conditions if you are not producing molybdenum,” he said.
Mr. Martirosyan says that the authorities are creating obstacles for their work. “As a result of the bad work of the customs services we can’t take our products out of the customs depots for about 17 days. How can the economy develop or improve if they are keeping your goods at the border for such a long time? For example, in Georgia if they don’t give you the customs documentation in three hours, the government pays a fine to the company. I have many orders from other countries but I can’t export due to well-known reasons. My products will spoil if they keep it for such a long time at the border. They are asking for stupid papers from exporters, which is a very big obstacle for export. I believe I am a good businessman and pay taxes. I am always paying all the taxes, all the payments for my employees, but we can’t breathe. Our company is not a small company, it is a mid-size company, but they are walking on us like they would do with small businesses,” says the businessman. He complains of high taxes and fees as well. “Now the problem in Armenia is that the taxes are paid by people who are not oligarchs. Companies like us are paying for oligarchs who don’t pay taxes and ourselves as well. It doesn’t matter how you are paying; whether voluntarily or no. It cannot help the economy to develop. As far as the system is in this situation, the big businesses will develop but the small and medium ones will walk in the place. For example, the businesses involved in the import of papers are free of taxes as 70% of them are oligarchs and don’t pay the VAT. The other 30% are paying not 20% but 61% because the customs payment is taken not from the customs fees but the fees they are defining, thus small and medium businesses are paying three times more as they pay for oligarchs too, who are free of the VAT though. This is the real picture of our economy,” said the businessman. Our newspaper has written about the problems of small and medium businesses a lot. Most of them have even ceased their activities and closed their businesses because of bad financial situation and conditions.