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Lragir, Armenia
Dec 26 2007
THE FORT SHOULD NOT BE LET STARVE TO PREVENT A REBELLION
The director of the Armenian Development Agency Tigran Davtyan
pronounced an interesting idea that the foreign investors find that
the climate for investments is better than they had expected but
since the Armenian market is small, Davtyan says it is the main
hindrance to major industries. It is difficult to disagree with
Tigran Davtyan. Nobody would make major investments in Armenia if
hardly 3 million people will pick up their fruits, more exactly those
of the three million who get remittances or are oligarchs or
officials. In brief, those who have money. However, this is mere
reporting of the fact. It is important to find out why the situation
is so, in other words, if there is a possibility to enlarge the
market. No doubt there is but it should be used, or efforts should be
made to use. The first option is perhaps an effort to set up
effective relations with neighbors.
The case of Azerbaijan is clear. The relations with this country
cannot be improved for a long time. This is the reality and there
cannot be illusions regarding this. The Armenian and Azerbaijani
relation has a long way to go to discharge the lack of confidence in
each other, and in this sense pragmatism can be more useful than
impertinent optimism.
As to Iran, the resource of our partnership with Iran is highly
restricted, and it began and ended with energy projects which are
turning into a `protectorate' of Russia because Armenia is no longer
an actor in energy and has handed out the cords to Russia. In terms
of multifunction economic relations Iran has no prospects for us,
considering also the problems this country has with the international
community.
The case of Georgia is much more complicated. In reality it is not
clear what Armenia and Georgia have in common except for Javakheti.
The leaders of both states swear they cannot live without meeting and
greeting each other several times a year but the economic relations
between these two states does not go beyond retail trade. For
Armenia, Georgia's importance is export of capital rather than
involvement of capital, considering the resorts which the Armenian
businessmen are building on the Adjarian coast.
Perhaps the Armenian and Turkish relation seems a little more
probable than the Armenian and Azerbaijani relation but on the whole
it does not inspire hope, judging by the tough stance of the Turkish
government and the thinking of the Armenian government. In this
connection, there are expectations from a third party which means
there is no hope because there are many third parties and each of
them has their interests, and if it is in the interests of one to set
up Armenian and Turkish relations, the interests of the other two are
the contrary. As a result, the possibility of relations vanishes
rather than becomes visible, and the impression is that the third
parties try their best to leave the stances of the Armenian and
Turkish elites the same, although they make those efforts in the
context of their actions, because there is total peace and tolerance
at their surface.
Hence, it is obvious that Armenia is deadlocked, and nobody would
make major investments in a deadlock if the investments do not have a
political purpose. One does not need to be an economist to understand
it. Therefore, only Russia is willing to make major investments in
Armenia. A fort should not be let starve to prevent a rebellion.
The problem is the size of the mistake of the Armenian government.
This is a complicated problem because there is too little information
for even suppositions. However, it is perhaps clear that the internal
economic policy is pushing Armenia deeper into the deadlock. First of
all, through its loan and monetary policy Armenia artificially
reduces its market to make producing in Armenia and exporting
non-lucrative. In other words, any investor knows that producing is
not lucrative because there are no favorable conditions for export.
Besides, what is found in the Armenian economy? Monopolies,
protectionism, relations based on illegal arrangements, absolute
preference of Russia. For instance, if a major foreign businessman
comes to Armenia and tries to make investments, on learning that he
first needs to find out whether that sphere is vacant and how much he
must share with the government, what conditions the government will
impose except for the law and whether one day Russia will not have an
eye on that sphere whose wish and words are a law for the Armenian
government, the major foreign businessman will turn back his plane in
the air, if he is not from Russia, and he is not an adventurer, if he
is not a Diasporan with already a philosophical outlook for life, and
most importantly if Vardan Oskanyan has persuaded him that we will
develop for another 100 years with blocked borders.
JAMES HAKOBYAN
Dec 26 2007
THE FORT SHOULD NOT BE LET STARVE TO PREVENT A REBELLION
The director of the Armenian Development Agency Tigran Davtyan
pronounced an interesting idea that the foreign investors find that
the climate for investments is better than they had expected but
since the Armenian market is small, Davtyan says it is the main
hindrance to major industries. It is difficult to disagree with
Tigran Davtyan. Nobody would make major investments in Armenia if
hardly 3 million people will pick up their fruits, more exactly those
of the three million who get remittances or are oligarchs or
officials. In brief, those who have money. However, this is mere
reporting of the fact. It is important to find out why the situation
is so, in other words, if there is a possibility to enlarge the
market. No doubt there is but it should be used, or efforts should be
made to use. The first option is perhaps an effort to set up
effective relations with neighbors.
The case of Azerbaijan is clear. The relations with this country
cannot be improved for a long time. This is the reality and there
cannot be illusions regarding this. The Armenian and Azerbaijani
relation has a long way to go to discharge the lack of confidence in
each other, and in this sense pragmatism can be more useful than
impertinent optimism.
As to Iran, the resource of our partnership with Iran is highly
restricted, and it began and ended with energy projects which are
turning into a `protectorate' of Russia because Armenia is no longer
an actor in energy and has handed out the cords to Russia. In terms
of multifunction economic relations Iran has no prospects for us,
considering also the problems this country has with the international
community.
The case of Georgia is much more complicated. In reality it is not
clear what Armenia and Georgia have in common except for Javakheti.
The leaders of both states swear they cannot live without meeting and
greeting each other several times a year but the economic relations
between these two states does not go beyond retail trade. For
Armenia, Georgia's importance is export of capital rather than
involvement of capital, considering the resorts which the Armenian
businessmen are building on the Adjarian coast.
Perhaps the Armenian and Turkish relation seems a little more
probable than the Armenian and Azerbaijani relation but on the whole
it does not inspire hope, judging by the tough stance of the Turkish
government and the thinking of the Armenian government. In this
connection, there are expectations from a third party which means
there is no hope because there are many third parties and each of
them has their interests, and if it is in the interests of one to set
up Armenian and Turkish relations, the interests of the other two are
the contrary. As a result, the possibility of relations vanishes
rather than becomes visible, and the impression is that the third
parties try their best to leave the stances of the Armenian and
Turkish elites the same, although they make those efforts in the
context of their actions, because there is total peace and tolerance
at their surface.
Hence, it is obvious that Armenia is deadlocked, and nobody would
make major investments in a deadlock if the investments do not have a
political purpose. One does not need to be an economist to understand
it. Therefore, only Russia is willing to make major investments in
Armenia. A fort should not be let starve to prevent a rebellion.
The problem is the size of the mistake of the Armenian government.
This is a complicated problem because there is too little information
for even suppositions. However, it is perhaps clear that the internal
economic policy is pushing Armenia deeper into the deadlock. First of
all, through its loan and monetary policy Armenia artificially
reduces its market to make producing in Armenia and exporting
non-lucrative. In other words, any investor knows that producing is
not lucrative because there are no favorable conditions for export.
Besides, what is found in the Armenian economy? Monopolies,
protectionism, relations based on illegal arrangements, absolute
preference of Russia. For instance, if a major foreign businessman
comes to Armenia and tries to make investments, on learning that he
first needs to find out whether that sphere is vacant and how much he
must share with the government, what conditions the government will
impose except for the law and whether one day Russia will not have an
eye on that sphere whose wish and words are a law for the Armenian
government, the major foreign businessman will turn back his plane in
the air, if he is not from Russia, and he is not an adventurer, if he
is not a Diasporan with already a philosophical outlook for life, and
most importantly if Vardan Oskanyan has persuaded him that we will
develop for another 100 years with blocked borders.
JAMES HAKOBYAN