New government's incompetence causes capital outflow from Armenia
By Rashid Shirinov
The new Armenian leadership is presently trying in vain to make the world believe that the victory of the “velvet revolution” has allegedly turned Armenia into a really democratic country that is ready to move forward to a bright future. Almost three months have passed since Nikol Pashinyan came to power in the country, but he has not yet presented an economic program with which he is going to lead Armenia to the promised progress and development.
The prime minister talks a lot about democratic reforms, struggle against corruption, large-scale investments, development of tourism and other components of the future economic boom that Armenia will allegedly enjoy soon. However, so far he can only present a bizarre model of replenishment of the state budget – by robbing the robbers. Today, many high officials, businessmen and financial magnates who are closely connected with the former ruling regime are deliberately persecuted in Armenia.
Pashinyan’s statement after the recent NATO summit in Brussels is particularly noteworthy in this regard: “I believe that we are fighting corruption in the country quite effectively. When a European official said that they are ready to allocate funds within a program for Armenia, I replied with the name of a well-known corrupt official and said that if we shake him out properly, this amount will fall out of his pockets.”
Thus, these words make it clear that the new government of Armenia intends to selectively take money from the rich, since it has not yet developed a specific serious economic plan.
The persecution of rich people has already caused panic among entrepreneurs and owners of large fortunes. The commotion in the business environment of Armenia began in late April, when the people learned about the victory of the revolution. At that time, there was a sharp increase in the flow of capital withdrawn from the country.
Large companies and holdings regularly withdraw considerable funds from the country. The money is mainly transferred to Russia, the U.S. and neighboring Georgia. The head of the Alternative analytical center, doctor of economics Tatul Manaseryan has recently told Armenian media that the annual capital outflow from Armenia to Georgia in the tourism sector alone is about $300 million.
It is also noteworthy that small and medium-sized business people in Armenia are also not happy with the new government, since its attempt to totally document the turnover has dealt a blow to their businesses. The entrepreneurs complain that as a result of excessive documentation, their tax burden has increased, but the turnover remained the same.
In summary, one can say that the Armenian prime minister is taking steps to eradicate corruption in the country, but it is obvious that he chose a totally wrong way of doing that. If he keeps this up, the Armenian economy may receive a much stronger blow because of the constant capital outflow that began when Pashinyan came to power and is still ongoing.
---
Rashid Shirinov is AzerNews’ staff journalist, follow him on Twitter: @RashidShirinov
Follow us on Twitter @AzerNewsAz