It has already been two years since Armenia has been implementing the
“Armenia 2020” project. The project’s goal is to make plans for the
development of Armenia in the year 2020 through research and
investigations. Many investigations have been done within the framework
of this project, especially concerning topics such as Armenian
oligarchs, corruption, globalization, culture, education and others.
The title “Oligarchs-personal or social interests” is a very
interesting study.
Despite the fact that there are no names of oligarchs mentioned, the
“Armenia 2020” specialists have summarized information based on the
interviews with 20 well-known Armenian oligarchs. The summaries
describe the present situation. The majority of the oligarchs included
in this project has started doing business in the beginning of the
1990s and has achieved great success during the years of 1997-1998.
According to the specialists, this is due to the change in politics. As
for the present business world, the investigators note the following:
“In modern day Armenia, business is being done in a legal, economic and
social-psychological environment.” Either this is due to the fact that
besides official laws, there are many unaccepted norms, or the fact
that authorities influence the oligarchs: “The mixture of the
unaccepted norms and rules” does not allow foreign investors to do
business in Armenia, despite the steps taken by the authorities to make
that possible.
According to this study, one of the main characteristics of the
present-day oligarchs is that they do not limit themselves to a certain
economic sphere: “Armenian modern-day businesses are unique in the
diversification of interests in different economic fields, rather than
just specialization in one field.”
The study focuses on the social-psychological environment where
businessmen do big business. In reference to the opinions of many about
the tolerance of oligarchs, the authors of this study have concluded
that oligarchs, just like the rest of society, are also vulnerable.
“Based on the interviews, we became convinced that the state, its
ministries and institutions are perceived by the oligarchs as a
dangerous force which may seriously cause harm to their businesses at
any given time.”
This also explains why many oligarchs today are entering the political
scene, which can be clearly seen by the number of oligarchs who had
participated in the National Assembly elections. In other words,
oligarchs are going into politics to defend themselves and what’s
interesting is that, they are defending themselves from the state and
the authorities. As for the oligarchs’ influence on the state, that is
done by establishing ties with the president and his colleagues through
the means of the “representatives” of the executive body.
“One other way of having an influence on the authorities is for
the oligarchs to establish close ties with the president, which is
typical in Armenia,” claim the authors of the study. However,
establishing ties does not guarantee the future business and it is more
like a status. As one of the participating experts of the survey said,
“today they are oligarchs, but tomorrow, when the authorities change,
about two to three people will remain, which has already happened.” On
the other hand, there are opinions stating that the oligarchs have
played a role in forming the authorities which may limit the chance of
them having an influence. “The president can not order the oligarchs
around due to the fact that they have been the ones who helped him win
during the elections.” Basically, oligarch-authorities relations are
closely connected and they rely on each other.
What kind of outlooks are there for the development of business in
Armenia under these conditions? According to professionals of the
“Armenia 2020” staff, the objective limits set on the Armenian domestic
market force the oligarchs to choose in taking the following
strategies: diversifying economic interests in the country or entering
new markets, adding to export of products and services. As a matter of
fact, what’s interesting is that according to the authors of the
project, it is very rare to find a poor businessman taking hold of a
good business. As for export, a majority of Armenian oligarchs thinks
that it is still suitable to do business with Russia and CIS countries
because Armenian products are still not competitive in Western markets.
Entering the Asian market is difficult due to the much needed
sponsorship and the complex methods for doing business in those
countries.
What do the oligarchs think about improving the business environment in
Armenia? First of all, almost everyone agrees to the “Armenian
character” factor but they find that that is practically impossible to
eliminate. Then you have the oligarchs who think that it is possible to
improve the business environment if the person taking that initiative
is the president. Having that said, the oligarchs point out that the
authorities do not pay much attention to their issues. According to
them, the one or two meetings with the president and the businessmen
have been more like official meetings.
“There are only 50-60 people at the meetings. I just sit
quietly,” said one of the businessmen during an interview. Basically,
many oligarchs think that the improvement of the business environment
in Armenia is highly dependent on the authorities. In that case, this
means that the oligarchs are ready to put an end to having an influence
on the authorities, and most of them wish to get out of the political
arena and strictly do business. “I am forced to be involved in
politics, to go to the National Assembly. If there could be serious and
respected political parties in our country and if our political
activities were stable, I would only be involved in business without
setting my eye on politics,” said one of the well-known oligarchs
during an interview.
So, according to this study, the present-day oligarchs of Armenia are
not independent and they are closely connected with both politics as
well as the authorities. However, the oligarchs are forced to accept
the rules of the game.
In any case, what courses do the authors of the project plan on taking?
According to them, there are two possible views-realistic and
optimistic.
The realistic view predicts that in the future, business will function
under the same conditions, in other words, the consumer motivation and
the negative moral/psychological environment within the society, the
unpredictable business environment, the ever-lasting fear of state
interference and liability on the society. According to this, Armenia
will remain a third-world county for many years to come. As a result,
the business world will continue to be complex and private, there will
be advantages, and oligarchs will be divided into “us” and “them”.
Under these conditions, it will be practically impossible for any
oligarch to enter the market without the consent of the “high”
institutions. At the same time, there are outlooks for keeping the
steady growth in economy (according to statistics of the World
Bank-6-7%), with one condition: the Karabagh conflict must remain the
way it is. “Armenia 2020” researchers think that the possibility of all
of this to happen ranges from 95-97%. Armenia will still continue to be
a third world country based on this plan.
According to the optimistic view, researchers predict that the
authorities will achieve coexistence between members of society,
maintain economic growth at a 15% level which will help us approach the
standards of foreign countries. As a result, the state and business
will both be equal, state interference in business will directly or
indirectly reduce, a civilized business environment will slowly take
shape in the country and that will help Armenia’s standards to be
considered among some of the developed countries. Let’s not forget to
mention that the authors of the study think that the possibility of
this is not too likely to happen (3-5%).
The “Armenia 2020” project has also conducted studies on corruption.
“168 hours” weekly will discuss that in the upcoming editions.