Armenian Prime Minister Vows To ‘Crack-Down’ on Oligrachs

YEREVAN (RFE/RL)—Armenian Prime Minister Tigran Sargsyan pledged on Friday to crack down on wealthy and presumably corrupt state officials, saying that will be a key element of his drive to strengthen the rule of law in Armenia.

Sarkisian stood by his ambitious reform agenda that puts the emphasis on tackling tax evasion by the rich, improving the country’s business environment and, in particular, breaking up “oligopolies” that have monopolized key sectors of the Armenian economy.

The country’s monopolies are controlled not only by wealthy businessmen but also high-ranking government and security officials. Local anti-graft campaigners say this is the root cause of government corruption in Armenia.

“I think we can conclude, together with you, that officials engage in business nowadays,” Sargsyan acknowledged during a year-end news conference. “We can make such a political evaluation.”

He complained Armenia’s existing laws make it all but impossible for the authorities to expose and punish officials with extensive business interests of dubious origin. “That’s what makes us refrain from publicizing names and prompts us to create and introduce, together with you, [legal] mechanisms that would address this problem,” he said.

“We are going to fight against oligopolies, rather than oligarchs,” stressed the prime minister. “These are different things.”

The International Monetary Fund and the World Bank also increasingly stress the importance of tackling the oligopolistic structures. Officials from both multilateral institutions have warned in recent months that Armenia cannot return to the path of robust growth without combating government corruption and creating a level playing field for all businesses.

Sargsyan argued on Friday that his government has already obligated the country’s 500 largest companies to issue more detailed financial reports certified by foreign auditors starting from next year. He described that as the first step towards breaking up the oligopolies.

Sargsyan again defended the government’s response to the global economic crisis that has plunged Armenia into its worst recession since the 1990s. He claimed that the country is emerging from the slump with “minimal losses.”

He did not, however, comment on the consequences that many economists believe will follow Armenia’s heavy reliance on foreign debt to mitigate the impact of the recession. Ara Nranyan, an economist and parliamentary deputy from the Armenian Revolutionary Federation, has repeatedly warned that the growing foreign debt, which will amount to 40 percent of GDP in 2010, will make Armenia dependent to foreign capital.

The government, however, says that economic growth will resume already in 2010, despite figures that show it is on track to contract further by at least 15 percent this year.