Two Families Hold 12 per cent of Armenia's GDP

The German Friedrich Naumann Foundation and the Armenian Agreement Center held a round-table meeting in the series "Armenia 2007" on June 14.

The main speaker was the former prime minister of Armenia Hrant Bagratyan.

He entitled his speech: "Build democracy, get dictatorship."

Before speaking about Armenia Hrant Bagratyan enumerated some phenomena which are typical of almost all the post-Soviet states: the economic reforms are ahead of the political reforms, first structural then institutional reforms were implemented, two-digit growth is reported everywhere, reforms are slow in countries which have mineral reserves. For Armenia, "these developments cannot sustain evolution, it will blast one day, like it has been the case throughout our history." Hrant Bagratyan said his analysis is based on the official statistics, but he does not trust these statistics because "they are exaggerated three or four times."

In the United States 400 families hold 10 percent of the GDP of Armenia, in Russia 40 families hold 26 percent of the GDP, in Armenia 44 families hold 55 percent of the GDP and two families hold 12 percent of the GDP. "This affects governance and elections." "One cannot run a bank and be the vice president of the Central Bank. One cannot run a hospital and be in charge of the health sector. One cannot run a sphere 35 percent of which belongs to them. There cannot be neutrality or independence," Hrant Bagratyan said.

According to Hrant Bagratyan, centralization of the capital hinders economic reforms. On the other hand, business owners try to become oligarchs, participate in the public administration, and again prevent the reforms. As a result, it is difficult to separate property from government, public administration from economic activities.

If we take into account the enterprises we gave to the Russians in return for the Diaspora and debt, Armenia is the third in the Caucasus by the correlation GDP-foreign investments. Georgia's foreign investments total 38 percent of the GDP, in Azerbaijan 70 percent, in Armenia 20 percent.

According to official statistics, over the past 5 years jobs have decreased by 400 thousand. In addition, return on tax has decreased. "Black economy grows. The economic growth is harmful rather than useful to the country."