By the index of economic freedom, according to the American “Heritage Foundation” organization, Armenia has registered regress this year. According to the data of the survey “Index of Economic Freedom 2015” published by the organization, Armenia ranks the 52nd by 67.1 points, while last year, it ranked the 41th. One of the 10 points of decline in the economic freedom registered in our country, where the highest decline was noticed are the sectors of the property rights protection, labor freedom and currency freedom. According to the report, Armenia is still considered to be a country with an average economic freedom. To the point, as mentioned in the report, Georgia ranks the 22nd, this country’s economy was estimated as essentially free. Whereas, Russia that is one of the Eurasian Economic Union countries, ranked the 143th, Kazakhstan – 69th and Belarus – 153rd.
In the conversation with Aravot.am, Vice-Chairman of the National Assembly Standing Committee on Economic Issues, also PAP MP Michael Melkumyan commenting the respond of the Heritage Foundation, mentioned that the matter is to learn about the level of such assets, or the equivalent unhealthy assets and the property profitability in Armenia, unlike other countries. In other words, according to Melkumyan, the same property would bring several times much less revenue in Armenia. “The matter is about what conditions are available in Armenia for the operation of the assets and effective management of it, in contrast to other countries. If we look at the production capacity, the factories, let’s take, with machine tool population and infrastructures and compare with those in other countries and our neighboring countries, and we will see that we have one problem: the property price incurs from its guarantees, from the conditions of future operation of the institute of ownership, and, of course, from profitability”.
Mr. Melkumyan noted that the profitability in Armenia is small; the industrial-type assets are working in losses. According to the economist, there is another problem too. The properties that represent different businesses, a large portion of them are often pledged to the bank in the form of collateral and loans than the same type of ownership in other countries. The other problem associated with the assets, according to Mr. Melkumyan, is the nature of the institute of ownership being identical. “In other words, if the ownership in other countries is managed based on corporative management, in our country they are managed by more monoruling position, not monopolistic but monoruling, which are 1-2 owners, in the result of which the risks are greater. It’s one thing when there are 1-2 shareholders, and another thing when the shareholders are many. In the history of Armenia’s economy, the history of the private institute is arranged so that Armenians, intrinsically, are unable to do business with each other in dozens and hundreds due to the lack of mutual trust and culture, and also due to their aspiration to interfere in the running management.”
As observed by the MP, the matter is not the poor state of legal acts and laws, nor the poor administration to say that someone has come and chokes us; the matter is about the terms and conditions. “In other words, the business freedom that you invest your money and efforts, what revenue it brings to you. It is no coincidence that money is poured in the countries with fewer restrictions, because the revenues are much a lot there.”
Nelly BABAYAN
