On the way to meet the “two- headed” dragon

31/12/2011

It turned out that the current year which was not quite successful for Armenia, ended with an event that is positively accepted by Armenians. Of course we mean the adoption of the French bill that criminalizes the rejection of the Armenian Genocide.

Indeed, it still needs to be adopted by the Senate; indeed, it has certain motives; indeed, it doesn’t console our compatriots who are on the margin of poverty, destitution and took on the route to migration, however, we have no doubt that this event is going to be one of the holiday messages of our government. Of course our government did not play any role but the decision of the French MPs will be swiftly ascribed to the spectacular role of the Armenian authorities and the indispensible achievements. Have there been successes in the socio- economic sphere? More or less, yes. We are sure that those successes will not skip the attention of our authorities either. If we speak of the economic situation, then we should note that the macroeconomic indexes provided by the National Statistics Service are not so bad. The index of economic activeness during the last months of the year have slightly slumped (in November 2.4% compared to the same month of the previous year), however, during the first eleven months of the year, the economy was activated by 4.5- 5.0%. There has been growth in all sectors except construction, and the highest growth was registered in the industry section. For example, in November 2011 the volume of industrial production grew by 18.8% compared to the same month of the previous year. The export growth rate exceeded the import growth rate, etc. These are the “bright spots” that our government highlights with pleasure. However, the same official data tell us a different thing if we look at them from a different angle. The index of economic activeness has grown, but the population does not feel its effects. Incomes and salaries have slightly grown but due to the high rates of inflation, people have become poorer. During the year we have also found out that the consumers are cheated not only by prices but also quality and content due to the pricing policy of major entrepreneurs. For example, instead of butter they have sold some kind of a chemical substance named “vegetable spread” which 99% of the population is not familiar with. The volume of industrial production has grown but wealth is not evenly distributed. The export growth was higher than the import growth at the expense of the continuing growth of the negative balance of the foreign trade. The structure of export also doesn’t give any grounds for joy. The government lauds about the support to small and medium businesses but the latter are experiencing almost impossible conditions for further functioning. They speak about improving the business environment in the country but raise taxes even more for the next year. Hired employees complain of the business and hold strikes by demanding their salaries. During the year while the government continues to loftily speak about its achievements and complains that nobody else wishes to see the success, the Armenian citizens are intensively migrating from the country. Let us only remember that during January-  October of this year over 80.000 people left Armenia, according to the official data. It turns out that the external world does not notice the success of the Armenian government either. The Forbes has recognized Armenia the second worst economy in the world, and then the Armenian government labeled it unserious. But the problem is that serious economic organizations such as the Doing Business were also not very delighted by the Armenian economy. The government was speaking about their determination to implacably fight against corruption, but according to the Transparency International, there had been no progress. Seemingly, there is a dialog between the government and opposition but certain international organizations claim that the state of democracy has not been improved during the past two years. They speak about media liberty but media outlets have been numerously sued during the year. The government ensures that we are financially stable and have no problems in term of foreign debt, but the “Mudis” declines Armenia’s rating. We may continue this list, but let’s stop right here. As they say, New Year is coming and it should bring new hopes and optimism. But in order to be optimistic, we should understand where we are headed (nobody already cares where we came from). We are all sure that on the threshold of parliamentary elections both government and other non parliamentary parties will start to promise and impress us with bright and thick platforms but it is hard to believe in their sincerity. It is still unclear in what direction Armenia is moving – European integration or Russia (or what they currently call the Eurasian Union). This is not a fresh issue but has been refreshed by Russia this year. It seems that Armenia has long ago given its answer to this because it has been actively participating in the Eastern Partnership program. The government actively negotiates on joining the EU- Armenia association memorandum, as a result of which, we will be deeply integrated with Europe and the European market. During the year, however, Russia’s Prime Minister Vladimir Putin revived the idea of the Eurasian Union and it turned out that our answer in smeared and unclear. The Armenian government rushed to announce that they have a positive opinion about the initiative and thus confuse the people who linked their future with the European family. But according to unbiased pundits, this is technically impossible. If we are moving to the European movement, we should adjust our legislation to EU standards. And the standards of the EU and Eurasian Union are completely conflicting. The matter, however, is not only technical and it does not only relate to the economic aspect. Everybody realizes that the Eurasian Union is created as a counterbalance to the West and most importantly the EU. The economic integration cannot fully segregate from political, social, and cultural integration. It is impossible to have an Asian model of economy and a society with European values. We should either completely head toward Europe or Russia. If we join the Eurasian Union with Russia, then we can maximally be considered by Europe a neighbor with an economy and political system which we have now. If we decisively move to the EU, then it is not hard to guess what kind of problems our insulted strategic partner will create for us. Moreover, it will not be possible to conduct a complementary policy with this regard for too long. The renaissance of the Eurasian Union witnesses that the big players of the world wish to clarify certain things, by trying to understand who is with whom. It is not improbable that next year Armenia has to clearly express its stance in this regard, and this is going to be very difficult because we cannot ignore Russia, especially closer to elections. That is why both the opposition and the government are very cautious and make references to Russia and the EU at the same time. So far they succeed in it. However, as there is no concreteness in this regard, all the plans, including economic ones, are infeasible. We do not have any intention to spoil the holiday mood, but we should say that in 2012 Armenia will undergo a difficult stage. Of course during the holidays we will try not to think about the problems of the last year or the challenges of the next one. At any rate, we seriously need to think about our future.