Category Archives: Economy

Stop the Custom’s Agreement from being Signed with Moscow

Armenian citizens should not allow the customs agreement to be signed with Russia.

Joining a still-abstract Customs Union, with Russia, Belarus and Kazakhstan confirmed onboard, is a disaster in the making and would the worst thing the Armenian republic ever did in its 22 year history. It would be tantamount to entering a screeching time vortex and landing in the dark ages, complete with the classic communist slogans pasted across the city walls and statues being re-erected glorifying the days of the Soviet dream. Putin’s dream is to bring it all back, under a different guise, but all the same associated nonsense.

After 4 years of negotiations with the EU on signing the Association Agreement and the Deep and Comprehensive Free Trade Agreement, which would have entered its final phase with a formal signing ceremony in November, one man’s abrupt decision should not lock Armenia’s fate and compromise its long-term sustainability and prospects for expanding growth. The Armenian people themselves must decide their own future, not someone who places his own personal interests over those of the people he is supposedly serving.

Any citizen who has had the privilege of studying or even visiting Europe, the US and other free democratic nations, and has a concept of what living in a democratic society means, and cares about the long-term viability of Armenia for his children and future generations, and wants to see expanding growth on all levels — economic, social, cultural, educational and so forth–must not permit the agreement for Armenia to join the Customs Union to be signed. It will neutralize the Association Agreement with the EU–this has been confirmed by EU officials.

According to RFE/RL’s report:

Elmar Brok, the German chairman of the European Parliament’s Foreign Affairs Committee, likewise said Armenia’s Association Agreement will not be signed any time soon. “I feel very sorry because it is legally — because of certain conditions — not possible to be a full member both of the Customs Union and have an association agreement and free trade area agreement with the European Union,” he told an RFE/RL correspondent in Brussels.

It’s not too late to stop this customs agreement with Russia from going through by any means. Fatalists in Armenian families, especially anyone over the age of 50, need to be locked up in the closet. It’s time to ensure that Armenia does not squander its opportunity for tighter integration with the west and opportunities abound for Armenia’s sustainable development. It’s time to demand that the Armenian government intervenes and forces the President to go back on his promises in Moscow. Armenians need to stand up.

Yerevan’s Digital Billboards – Are They Really Necessary?

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About six weeks ago a mounting stand for a digital billboard was fixed on the corner directly across the building in which I live adjacent to the printing house, at the intersection of Vartanants and Hanrapetutyan Streets. It was supposed to be installed across the street but someone came by and complained that it would block their windows, and remarkably whoever was in charge listened, then they hauled the thing away. Last week the LED  screens were installed, and yesterday the blinding advertisements for luxury ski resorts, casinos and expensive furniture stores began, in the heart of a middle-class neighborhood.

I have become so numb to such buffoonery that I’m not even trying to understand the logic in installing this billboard and others like it in the first place. But I wanted to get an estimate for what such a billboard would ordinarily cost and I found a web site that provides instant quotes.

I’m not very good with guessing measurements but to my eyes the billboard measures about 3 x 3 meters.  The screen seems to be high-resolution, judging from the picture quality and brightness, which brings the price at around $18,600. The stand seems to be constructed of some heavy duty metal, perhaps iron–the site estimates it to cost around $11,800. Then there’s shipping and installation to take into consideration, about $800 and $1800, respectively. At 7 cents per kilowatt, the current price of electricity that is scheduled to increase incidentally, the monthly operational cost is just over $103. Altogether, including other fees such as connectivity, the total expenditure comes to around $56,640, and again, this is according to the data that I fed into the calculator, it’s not meant to be an accurate figure.

Some alternative, more constructive ways to put that $56,640 to use:

1. Subsidize low income housing for two newlywed couples. In more remote parts of the city like Sepastia, Nor Nork or even Avan, Soviet-era apartments could be found for $25,000, maybe even less. Give them another few thousand to furnish the place properly and inspire them to be good citizens in the process. Or, find housing for families living in crammed quarters like sardines in the Erebuni hostels. The homeless, naturally, could also benefit from proper living conditions and mental rehabilitation.

2. Renovate one or two schools in dire need of repairs, especially in rural areas of Armenia far from the capital. Many still have broken windows, improper heating, dysfunctional lavatories. State-subsidized hospitals are also in need of funds–the shabby, unhygienic maternity ward where my child was born in Zeytun comes immediately to mind.

3. Build additional playgrounds, especially soccer fields, and thereby encourage children to be more active in playing sports. While your at it, might as well start a physical education campaign to get kids off their asses and exercise properly.

4. Increase the wages of the invisible street sweepers who are out there at 4 o’clock in the morning each day. Who knows what they make–it can’t be much more than a hundred bucks a month, realistically half that.

5. Install new, clean public toilets, especially in areas heavily frequented by tourists, like Republic Square and the Vernisage. If Armenia aspires to be European, it needs to act like it and properly cater to so many of its guests from Italy, France, etc.

The list goes on. I could sit here all night and think of more useful ways to spend that fifty grand, and I’m sure anyone reading this will have some other useful suggestion in mind. Installing digital billboards is not the answer to demonstrating progress. It comes from smaller, tangible things that are not easily noticed but make a huge impact on the community. That’s how society expands and transforms.

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Elections Over. Now What?

Karen Minasian, photo
Karen Minasian photo

As the press and politicians predicted, Serzh Sargsyan won the 2013 Armenian presidential elections in a landslide victory with 58.6 percent of the vote. His main challenger, Raffi Hovannisian, came in second with a rather impressive 36.7 percent, much higher than Levon Ter-Petrossian’s “official” count back in 2008.

Naturally we don’t know how realistic these numbers actually are since there was widespread vote buying, ballot stuffing and arranged voter turnout with some people purportedly being bused into Yerevan from Gyumri according to one account. RFE/RL reported other specific cases of voting irregularities.

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Nelli Shishmanyan photo

There is already discussion of revolution in the air–Hovannisian’s press secretary Hovsep Khourshoudyan said today that “Even Serzh Sargsyan wants a constitutional revolution. A revolution is in the making.” And on Feb. 15 Aghvan Vartanian of ARF-Dashnaktsutyun told reporters that the party foresees a post-election “radical transformation” in Armenian politics. Naturally, such comments don’t seem serious when you have voters purportedly drawing caricatures on their ballots–one person actually ate his ballot at the polling station. This shows blatant cynicism in society, not a call for transformation.

As Armenians will likely tolerate another five-year term of Serzh Sargsyan, here’s a list of equally important issues and concerns that he should examine immediately in order to win over the confidence of the apathetic, hopelessly fatalistic public:

– Double the minimum wage to  increase the standards of living for 99% of the population, most of which is struggling, to further stimulate the economy with consumer spending.

– Dissolve the monopolies shared by several oligarchic clans to invite competition in the marketplace.

– Attract foreign investment by continuing to offer tax breaks to would-be investors. Waiving customs fees, a good chunk of which ends up in the pockets of officials anyway, would also be a nice incentive.

– Persuade oligarchs to create jobs by actually investing in the manufacturing sector instead of relying on selling cheap Turkish and Chinese imports at exorbitant prices to earn profits.

– Boost foreign investment in the IT industry. The importance of this cannot be stressed enough. There is a plethora of talented young software engineers in need of jobs and career growth potential. They are leaving the country en masse–I personally know about eight people who have departed for the US, Canada and Russia and are extremely successful there. That talent has to stay put and help build the country.

– Overhaul the social welfare system to ensure that the plight of the very poor and homeless (yes, people without shelter roam Yerevan’s streets) is assuaged by providing free housing, health care and employment for those who need it urgently.

– Either stop or retract the complex web of governmental corruption. President Sargsyan best knows what needs to be done so there’s no need to elaborate here.

The Armenian diaspora can do the following:

– In memory of the victims of the Armenian Genocide, actively become involved in curbing emigration and cease justifying the inevitability of it. As I have written on this blog the continued exodus has become an issue of national security for Armenia and it urgently has to reverse, people need to return to their homeland. Armenia needs to be populated, it’s that simple. Armenia is fast becoming a serfdom, and the middle class will likely shrink with continued cynicism and the infectious desire to be “anywhere but here.”

– Stimulate  civil society in Armenia through trainings and by promoting initiatives.

– Become proactive in democracy building efforts. The mentality that “you can’t do it” fostered by Armenians from Armenia living abroad needs to change.

Good luck, everyone.

Reflections on Armenian independence unchanged

Armenian TricolorI am reposting this article about Armenian independence that I wrote exactly one year ago since I can’t emphase this message enough. I couldn’t find the words to say the same things again a bit differently. although I tried. Indeed, everything expressed herein is still relevant, and sadly, nothing has really changed to address the issues that I identify.

Twenty years ago when Armenia declared itself independent from Soviet rule it was not only claiming statehood, it was calling for a restoration of values.  The Armenian people would be able to think and create freely in a fledgling democracy that was both naïve yet highly optimistic. Many people believed that prosperity was on the horizon, jobs would be created, and a bright future awaited them. Little did they know that both war and unchecked entrepreneurship would set them back several years.  Some have never seen any kind of prosperity after independence, whether financial or spiritual.

Armenia today is ruled by a handful of wealthy families competing for prominence, similar to what you would find in a Hollywood film about the mafia, but without all the gory violence. The common people are subjects to the nepotistic society these leaders, or oligarchs, have created. Citizens who speak out against government decisions are cruelly suppressed by this system. Others are victims to bad policies and lose their livelihoods in the process. Civil society is weak, and initiatives to bring about change in the form of grassroots movements are often supported by outside special interest groups, mainly from the US or Europe. Narcissism has long become a virtue of the nepotists, with general disregard for law and order and respect for neighborhood peace violated day and night. Society is increasingly polarized with the dividing line between the haves and have nots all the more obvious. The social equality of Armenia’s soviet past is long gone.

Although the president is quite aware of the dire economic and societal issues that most Armenians face day to day, he either plays them down or fails to address them. For instance, he recently discounted the somber fact that entire villages have been relocating to remote parts of Russia as part of a controversial resettlement program promoted by the Russian government. Judging from the headlines in the Armenian press, it is clear that the president is often out of sync with what is transpiring in the country he supposedly rules.

Below is a list of problems that the president needs to contend with to ensure Armenia’s democratic and economic progress in the years to come:

Create jobs. In the wake of independence countless factories that were prosperous during the soviet era closed either overnight or during the course of several years. Although some like chemical plants and sugar processing facilities have reopened in recent years, Armenia’s industrial output is nowhere near what it was just before the Soviet Union began to crumble. The permanent closure of key factories in rural areas, like Sisian in the southern Syunik region and Charentsavan to the north of the capital, not to mention scores of other towns throughout the country, have resulted in a depopulation, with many people once living in small towns and villages flocking to Yerevan or leaving the country, most of them for Russia, in search of work. The president needs to create an environment whereby new factories can be built by wealthy Armenian citizens or foreign businessmen weary of doing business in Armenia. Eradicating corruption in the tax and customs departments and simplifying the business registration process would be an excellent start.

Promote small business. Yerevan mayor Karen Karapetyan made himself public enemy by sweeping traders off the streets (oddly only florists are allowed to sell roses from sidewalk stands) and destroying inconspicuous kiosks where cobblers, tailors, and cigarette sellers set up shop. Shopkeepers are harassed by taxmen and some are even forced to close for days on end while they scramble to clear up minute discrepancies found as a result of loopholes purposely left open by the tax authorities to extort bribes.  Although Prime Minister Tigran Sarkisian has often talked about encouraging the growth of small businesses, he has been reluctant to disclose the details of policies his government plans to implement. Tax breaks coupled with guaranteed interest-free government loans would encourage small businesses to open and help nurture an environment of trust.

Encourage civil society. In flourishing, deep-rooted democracies dissent and opposition to government policy are tolerated, and public advocacy is allowed to function. Initiatives to promote civil society need to be implemented, mainly by immediately stopping police confrontations or crackdowns on peaceful demonstrators. Society cannot be built while oppression and fear looms overhead Armenian citizens.

Tax the wealthy and give tax breaks to the lower classes. Hundreds of millions of dollars in revenue can be generated if only oligarchs were taxed, the sums of which could be funneled to important social programs. By 2006 estimates 26.5 percent of the population lives below the poverty line. Free housing could be provided to impoverished citizens still living in shacks, temporary housing, or on the street. Also, pensioners could finally receive monthly stipends that are in line with the current standard of living, which is continually on the rise with food prices often skyrocketing, especially in the period leading up to the holiday season. The government should aim to eradicate poverty nationwide, and it can easily do so if and when taxes are properly collected.

Prevent emigration and promote immigration. President Sarkisian desperately needs to draft a plan for slowing down the exodus from Armenia. That should include job creation through promoting foreign investment in the manufacturing and IT sectors, an increase in the minimum wage, and equal opportunity, particularly in government agencies. He also needs to address the relatively low birthrate, with 12 children born for every 1,000 people and on average one child born per household, according to 2011 figures. He also needs to ensure that infrastructure is modernized even in the most remote villages of the republic.  Several areas of Artsakh along with the Armenian controlled territories surrounding it must be populated, and that again can only come about with increased investment and the vital infrastructure in place.  When Armenians worldwide feel confident that the Armenian government is able to provide the means and conditions for promoting growth throughout the regions, they will begin to immigrate.

These are only a handful of issues that loom over Armenia’s destiny.  There are just as many if not more challenges related to Armenian foreign policy that must be addressed, the most important being the resolution of the Nagorno-Karabakh conflict, which seems to be floating in an eternal stalemate.

In his Independence Day remarks, President Sarkisian hailed the new generation of the republic recognizing its “concerns and demands” of a better society.  He also stated that “… in the next twenty years we will be able to build a country which will come close to our ideals. I believe in that because I believe in our collective power.”

Now the pressure is on the president. He alone can muster the support of both an apathetic public and the oligarchic society backing him by making the right policy decisions that would benefit all, not just a select few. That is a difficult balancing act, but the means to accomplish such a feat simply need implementing and the vision to do so. Having said that, it is up to Armenian society as a collective whole to ensure he aspires to the same ideals to which he alludes, the same that all citizens expect to live by.

A Defeatist Nation

This article originally appeared on the Armenian Weekly web site.

With the Armenian National Assembly elections right around the corner slated for May 6, I am obliged to reflect upon the political situation of the last four years and contemplate where Armenia is headed. These elections will be the most important in this republic’s brief history as a test for the functioning of democracy, yet most people don’t realize it.

Whenever I meet someone for the first time here in Armenia a minute doesn’t pass before politics comes up in conversation. For the last seven or eight years I have heard countless people express their disgust in the Armenian government and authorities, that the country is not a country, there is no justice, the oligarchs do whatever they want and take advantage, and so forth. Indeed, not once have I met anyone who has told me that they approve of the regime in power — either backed (in Robert Kocharian’s case) or fully controlled by the Republican Party (along with its coalition partner parties). Nearly everyone has told me the same thing — the laws don’t work or there are no laws, and the judicial system is corrupted. They are desperate, hopeless and dwell in a self-imposed realm of defeatism, each playing the role of the eternal victim. They expect governmental reform without having to work for it, as if the authorities will magically one day realize that they shouldn’t lie to and cheat their citizens any longer. They want justice and good governance, but no one can agree on how it will be achieved and who will lead that reform movement. Meanwhile, the Armenian Diaspora remains silent, continuing to turn a blind eye to the lack of democracy and governmental irresponsibility.

Given the negative mindset in the motherland, one should come to the logical conclusion that the Republican Party will win less votes than it has in the past–despite election fraud that is bound to occur–making way for a new National Assembly controlled by a union of parties, albeit fragile, that have been in opposition. This ideal union would likely comprise the Armenian National Congress, ARF-Dashnaktsutyun, the Heritage Party and Free Democrats alliance, and the Prosperous Armenia Party, which has been keen to distance itself from the authorities in recent weeks although it refuses to officially break away from the pro-government coalition. This fresh National Assembly will also signal a new era in government, one where the demands of the people will conceivably be met and, as Raffi Hovannisian put it in my interview with him [link to http://hetq.am/eng/multimedia/videos/62/], emigration is reversed so that a wave of immigration displaces it. Nevertheless, the Republican Party’s notorious pre-election terror campaign of intimidation and harassment that has already been unleashed is bound to coerce many voters to cast ballots in their favor. The authorities are also counting on disenchanted citizens to sell them their votes for twenty bucks apiece.

The issues plaguing Armenia are too numerous to list. But the most relevant points to tackle in random order are the following: a reformed, competent and properly trained police force; an independent judicial system; a substantial increase in funding for social services including doubling the minimum wage and pensions (which all contending opposition parties are pushing); the renovation of schools and hospitals nationwide starting with the most remote areas first; the reconstruction of roads and infrastructure again with the most remote villages a priority; the encouragement for civil society to flourish; the break up of the trade monopolies, especially on staple foodstuffs to promote competition in the marketplace; incentives for small and medium-sized business ventures to start up; a four-fold increase in efforts to encourage foreign investment in the thriving Armenian IT sector; additional investments in the tourism industry; and the immediate cancellation of long-term environmentally devastating mining projects that would only benefit foreign investors (the local economy would not be positively affected by any means). The list can go on and on, but tacking the aforementioned issues is a good start to getting things on track in Armenia and reversing the trends of narcissism and greed that have been strangling this country for far too long.

Some argue that it will take decades and several generations to pass before the aforementioned issues even begin to be properly addressed. Unfortunately, we don’t have that long to wait. It’s been nearly twenty-one years since Armenia declared independence, and most citizens are no better off than they were then. Unofficial population estimates in Armenia are between 2-2.5 million. Entire villages have picked up and moved to remote parts of Russia where they have been provided housing and employment as part of a rural colonization scheme. The talented, technology savvy youth are leaving for the US, Canada and elsewhere–I personally know five software engineers that have emigrated during the last three years. Artsakh is continuously being emptied of its populace–only around 2,700 people are left in Shushi alone.

The new wealth and economic growth that is noticeable to foreigners and Armenians from the Diaspora is concentrated in central Yerevan–it is a mirage, actually a smokescreen obscuring what things are really like here. The sooner the Diaspora comprehends this and puts pressure on the Armenian government to get its act together, the more secure and yes, entrepreneurial Armenian citizens will be. But that reshaping cannot happen on its own, it needs stimulus; it requires motivation and dedicated hard work. It is dependent upon foresight and ingenuity. And it has to start right now.