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Corruption hindering Armenia's economic growth

16 November 2015 17:00 (UTC+04:00)
Corruption hindering Armenia's economic growth

By Laman Sadigova

An American diplomat has identified corruption to be a major hindrance to the economic growth in Armenia.

"The entire economy, and indeed, the entire country suffers," US Ambassador to Armenia Richard Mills stated while hinting at the true state of affairs in the poor post-Soviet country.

He believes that Armenia had to pay a steep price for the corruption existing in the country.

"I hear about the toll from potential US business investors and from the average Armenians as I travelled the country," he stressed.

"When competition among businesses is unfair and not based on objective commercial criteria and when there are powerful interests that have disproportionate economic and political influence, it limits economic growth," he pointed out.

Armenian and foreign investors have shunned expanding their business activities in Armenia after realizing that their potential competitors can become ministers, members of parliament, the prime minister, or any other former official.

Armenia ranked 94th along with four African states among the 174 countries and territories evaluated in Transparency International’s most recent Corruption Perceptions Index (CPI) released last December. It held the same position in the 2013 CPI, which covered 177 nations.

Chairman of the Armenian Employers' Union Gagik Makaryan affirmed that the CPI in Armenia does not fall below 66 percent only because the fight against corruption is not carried out properly, and it is necessary to eliminate the root causes and to have a system in place that will be able to reduce the risks of corruption.

Earlier, in 2015, an anti-corruption commission headed by Prime Minister Hovik Abrahamyan was established in Armenia. However, the committee had yet to deliver any effective results.

Despite the European Union Delegation to Yerevan contributing €1.5 million towards two anti-corruption projects in the 2011-2014 period and having announced plans to allocate an additional €21 million to promote transparency and civil service reforms, the situation has shown no signs of change. Moreover, the Armenian authorities do not support the fight but also impede it.

Moreover, a largely controlled media environment further aggravates this situation.

The initiatives that the Armenian government “supports” to fight against corrupt structures are vague and symbolic. The authorities are not keen to eliminate conditions that help them flourish and buy new properties. It appears that their conscience does not suffer from guilt even though one-third of the country’s population lives below the poverty line.

The situation will become clearer if the public realizes that almost half of the current Armenian government officials are oligarchs who utilize their power to expand their own businesses.

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Follow Laman Sadigova on Twitter: @s_laman93

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