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Sarkisian Vows End To Business Oligarchy In Armenia

09.11.2011 Sargis Harutyunyan

President Serzh Sarkisian made a case for separating government and business in Armenia on Wednesday, saying that is vital for securing the country’s long-term economic development.

Addressing members of the leading Armenian business association, Sarkisian also said that his government is already succeeding in improving a flawed business environment widely regarded as a serious hurdle to faster growth.

“Business must be consistently separated from the state system and the authority,” he said in a speech at the annual congress of the Union of Industrialists and Entrepreneurs. “Instead, the state should keep learning to fully respect the interests of every citizen and entrepreneur.”

This, explained Sarkisian, will be part of a radical “transformation” of Armenia which he said will serve as a “long-term guarantee of our further economic growth and development.”

Government connections have long been essential for engaging in large-scale entrepreneurial activity in Armenia, resulting in an effective monopolization of lucrative sectors of its economy by wealthy businesspeople close to the ruling establishment.

Also, many senior Armenian officials are known to have had extensive business interests. Throughout his long political career Sarkisian himself has been dogged by opposition allegations of sponsoring such “oligarchs” and even making a personal fortune.

Dozens of parliament deputies from his Republican Party of Armenia (HHK) are wealthy individuals. Reports in the Armenian press have said that Sarkisian intends to bar many of those lawmakers from entering the next parliament to be elected in May 2012.

Government critics claim, however, that the president will keep heavily relying on them in order to retain control over the National Assembly and win a second term in office in 2013. The government-linked tycoons will therefore continue to enjoy privileged treatment by the government, they say.

But Arsen Ghazarian, chairman of the Union of Industrialists and Entrepreneurs, insisted that Sarkisian is committed to dismantling the “oligarchic system.” He said he and other senior members of the union arrived at such a conclusion after a “quite frank” meeting with Sarkisian held in early October.

“Comments made by him lead us to the following conclusion: there is a political will to … finally start breaking up the oligarchic system,” Ghazarian told RFE/RL’s Armenian service (Azatutyun.am).

Most of the oligarchs are not affiliated with or are only nominal members of Ghazarian’s organization uniting hundreds of entrepreneurs.

“Business needs a favorable business environment and we are going to ensure that,” Sarkisian said in his speech. He insisted that government efforts to improve the investment climate are “already producing results,” citing the findings of an annual survey conducted by the World Bank.

The bank’s “Doing Business 2012” report released late last month rated 183 economies on ten aspects of government regulation of business, including taxation and the ease of starting and closing businesses and registering property. Armenia occupies 55th place in the rankings.

“Armenia is the only country among 183 economies that implemented as many as five regulatory and institutional reforms between June 2010 and May 2011,” said the report.