Government Moves to Improve Business Climate

YEREVAN (RFE/RL)–The government approved on Thursday a wide-ranging plan of actions designed to improve Armenia’s business environment, which Prime Minister Tigran Sargsyan said leaves much to be desired.

A government statement said the program envisages more than two dozen specific measures relating to tax collection, enterprise registration, contract enforcement, investor protection and other aspects of doing business in the country.

It gave no further details, saying only that all government agencies will be obliged to report to the Armenian Ministry of Economy on a monthly basis about their implementation of those measures. The ministry will in turn have to sum up and submit that information to the prime minister’s office, the statement said.

In his opening remarks at the weekly cabinet session, Sargsyan indicated that the program is part of his government’s broader efforts to combat widespread corruption, which he described as “our number one enemy.” “The number one problem in the Republic of Armenia is not the lack of democracy or the absence of free speech, it’s corruption,” he said. “That’s the number one problem hampering our reforms. If we fail to create a level playing field for all economic entities, there will be no democracy in Armenia.”

“There is the need of institutional changes that will eradicate this negative phenomena,” he said.

Government connections have long been vital for engaging in lucrative forms of large-scale economic activity in Armenia. Some sectors of its economy have effectively been monopolized by wealthy entrepreneurs and their government patrons.

The launch of the program was announced amid the government’s ongoing efforts to simultaneously reduce tax evasion and corruption among tax officials. The drive has already prompted protests from some local businessmen.

Meeting with Sargsyan on Tuesday, they complained that the tax authorities anxious to meet their rising revenue targets have stepped up the controversial practice of forcing private firms to pay more taxes at any cost. They also implied that government-connected tycoons continue to enjoy privileged treatment.

Sargsyan acknowledged the practice and pledged to do his best to eliminate arbitrary tax collection.

“Unfortunately, we have to say that today we do not enjoy the business community’s confidence,” the premier told ministers on Thursday. “Of course it’s not good when you are not trusted, but at least they can now freely and audaciously speak about that. We can achieve serious changes in that area only through consistent work.”

The prime minister spoke also about corruption in passport and visa department of the police instructing appropriate agencies to propose suggestions on radical changes in this sector


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