Thursday, May 08, 2008

Economic development in Armenia.

Hernando De Soto speaks about why the third world countries fail to become rich in this short video. It all boils down to the absence of legal infrastructure and he focuses on the property rights. In such situations, he argues, only a small elite is able to take advantage of capitalism and grow richer.

This concept applies very well with Armenia. The property rights are not very respected there (remember the Buzand street and Northern avenue residents whose property was taken away from them). The other rights of the citizens are not respected much either so you end up with a corrupt banditocracy where the vast majority of the population can not take advantage of capitalism and only a small group of people is able to prosper.

Such a situation is inherently dangerous. It pushes people to embrace false ideologies like socialism and communism. The bitter lessons from the Soviet era prevent that but Armenia is still a quasi socialist country with a gigantic government. That is a great drain on the resources that could be used to add value to the society instead of being wasted.

35 comments:

Haik said...

The USSR has nothing in common with Communism. Nothing belonged to the communes or communities and the communities had no impact on the way that they wanted to live.
Everything was decided by a dozen people based in Kremlin. They called themselves the State. everything belonged to this State. We can very confidently say that USSR was a State Capitalism.

Coming to socialism: which is better to respect and value the society or the capital ( dead objects)?
The society is more valuable for me. It is another question that what kind of socialism, about which I will not talk here. It is a very long topic.
We have more or less pure capitalism in the US and as a result over 60% of the population has no access to healthcare, around 40% doesnt know when will be their next meal. meanwhile the fat cats get fatter and the whole burden is set on the middle class.
Capitalism is in its final age. We might not see this breakthrough but we definitely witness the process.

Armen Filadelfiatsi said...

De Soto doesn't know what he's talking about. He is one in the long line of apologists for capitalism starting, in our epoch, from Keynes, to Sachs, and now de Soto.

They write some batty paper explaining the rote inequalities and crises that capitalism produces as the fault of this or that scapegoat, like, for example, distance from the center, racial immaturity, corruption, and so on. Then some hireling PhD reads their batty paper, reports to his ruling elite bosses, and all of a sudden de Soto is a "celebrated" economist, the smartest guy since, erm, Alan Greenspan, don't you know.

It's all bullshit.

De Soto says that corruption is to blame for capitalism not working miracles in "developing" countries. What he is covering-up is that capitalism is the cause of the corruption. In a system where the rich necessarily get richer and the poor necessarily get poorer, the word "corruption" is nothing but the word that the rich use to entertain the poor's notion of ethicality. "Corruption" is "inequality" with ethics mixed in.

Who would say that Kocharian and Sargsyan and their cronies are not capitalists? They have the money and they have the power: meaning, they have capital. They are using that money and power (capital) to get more money and power (capital). That's capitalism. It's that obvious.

There is as much ethics in capitalism as there is ethics in mathematics. If you call Kocahrian "corrupt," then what you are doing is saying that his enjoyment of capitalism is going beyond a certain ethical limit.

Admit it.

Historically, this tendency for people to go beyond the ethical limit has been checked by the regulation of the economy. The state has said to the capitalists: you can't privately own the water supply of the country, you can't own the electricity, the roads, or any other vital resource a human being needs to live and work. That is what socialism really is: state regulation of the excesses of capitalism, the only thing standing between the people and the Kocharians of the world.

But all of that disappeared with, generally speaking, the (predictable) economic crisis of the 70s, infantile voters, and the monster named Reagan that they gave birth to, who started a trend of deregulation the hag mother of which was the banking deregulation of 1996: the--real--cause of the housing/mortgage crisis that is threatening the welfare of the entire world.

And none of this is accidental, mind you. This is why de Soto is a lying crony. Those who do have capital don't want any competition. They make sure that the working class--read, erstwhile middle-class--remains ignorant, without capital, and at the mercy of the hate it has for the scapegoats that are put on the television for it to blame for its misery: homosexuals, "liberals," Mexicans, and, in Armenia, Levon Ter-Petrossian.

The poor people of Peru, or of Egypt, or of Armenia are poor because they have no capital and nothing to invest. All they can do is to go out and work for someone who does have capital and make enough to pay the bills and get by, if they're lucky. And they never make enough to be able to save, and even if they manage to save, inflation makes sure that their savings end up meaning nothing. That's not accidental.

Applied to Armenia, de Soto's bogus argument would be that Kocharian and Sargsyan corrupted the system that would have worked otherwise. But the real question is: Who corrupted Kocharian and Sargsyan? Who? The answer is the World Bank, the IMF, and the Millenium Fund that sent billions of dollars of--unmonitored--money in their direction. These institutions are happy to loan money to--read, buy Armenian children's lives from--Kocharian and Sargsyan, because on top of everything else, they get deregulation of state services in Armenia. That's not accidental, either.

The truth is the exact opposite of what de Soto says: Developing countries aren't poor because their corrupt local governments keep them like that, no. Developing countries are poor because rapacious--global--capital corrupts local governments, then hides behind the people it has corrupted and gives the microphone to useful idiots like de Soto to spread his personal confusion far and wide.

And that's how we all became slaves.

Armen Filadelfiatsi said...

I think this is an important topic and I cross posted my response on my own blog.

Thanks for bringing up this issue, Nazarian.

reflective said...

The dark side of capitalism was best exemplified in Armenia long before Kocharian and Sargsyan were even in Yerevan.

Check out the history of privatization in Armenia when LTP sold off the industrial infrastructure in the name of Bagratian-liberal reforms and nearly all the factories (source of jobs) to his cronies, who in turn liquidated the physical capital, selling parts and metal scrap to Iran and Turkey, while promoting Armenian emigration.

How about Vano who opined that the emigration of Armenians from Armenia was a positive and natural phenomenon?

The above sell-off coupled with the banking sham, when another set of LTP mafiosos stole peoples' meager savings and took off (this one to Bulgaria, that one to Los) leaving the People in the lurch.

Fat cats emerged and hundreds of thousands were left penniless or just gave up on Armenia.

Sounds like a good example of system abuse in the name of liberalism and capitalism. Are the -isms to blame? Not sure.

Poor laws, a poor constitution, and a legacy of corruption from soviet days which spread like cancer during Levon's time and continued during Kocharian's have clearly played a role in this devastation of Armenia.

Anonymous said...

Knereq offtopi hamar, bayc indz tvum e bolorin partadir petq kardel Galust Sahakyani darakazmik verlutsutyuny
http://www.armenialiberty.org/armeniareport/report/ar/2008/05/9F75099E-5488-40D0-8084-57DA8D6CFB74.ASP

HN said...

Reflective
Have you every lived in Armenia during the mid 80s till mid 90s?

The land privatisation in early 90s was a huge success. It was the first one in former-USSR and saved Armenia from hunger.There might have been local level irregularities but what Levon could do if a village chief took an extra co. We were in a war damn it, the USSR economy was in ruines and the whole USSR was de facto collupsed.

The factory privatisation took place in the form of giving shares to people. So the people became the owners of the State property.
Because of the harsh times (the huge USSR totally collapsed, we were under blockade and we were in a war) people start selling their shares. Like in many situations there were speculators ( mainly the corrupt factory directors) who started buying those shares and at the end became the owners of the factories. This was based on the free-market economy principles.
I think it should have been regulated some sort, at least people whould have been educated. but again we were in teh war, the whole economic system was collupsing, there were no good specialists. During Soviet times Marx's "Das Capital" was the only economics book in teh universities. I was an economics student in YSU and was 'taught' economics based on Karl Marx.


As for the saving accounts you have the history and years mixed up. This happened when Armenia was still part of the Soviet Union.
Armenian banking system was part of the Soviet systems, the money was the USSR Rubles therefore Armenia had no impact wahtsoever on the monetary policy. This was the time when the bank accounts were frosen or withdrawls were limited because the USSR was bankrupt, there was no money in the banks. As a result Moscow changed the currency. This is the time when people lost their money because they were allowed to convert only up to 3000-5000 rubels per person. This was done to decrease the money supply and therefore to stop inflation and control the economy.
This had nothing to do with Aremnain government and Levon as all of those were decided in Moscow.
To add at least from 1984 there were food huge food shortages. In 1987 food ration coupons were introduced formeat, sugar, butter, tobacco, and even soap. And of course if you were lucky to find them. I remember how many of those coupons never materialised and we had no food for the month.

spm said...

Filadelfiatsi.... your analysis is not valid. Re-phrasing W. Churchill, the capitalism is not the perfect system, but its better than anything else tried so far by human societies. The capitalism assumes that there is a competition, which is absent in such "capitalism" as implied by Rojik and other middle asian states. Of course the richer is getting richer, but in a free economic society there are also Brins, who come from Russia and create Google. In Armenia and counties governed by RK and alike, also some people become millionairs overnight, but the society does not gain anything from that. I dont have time and interest in going to all details of your comment. Capitalism, and particularly the US brand have many deficiencies and reasons to be criticized, but please, dont compare it with what is going on in Armenia and try to justify whatever our XOZ rulers do.

As for Reflective, you tire me man. No matter who speaks of what you sing the same song, Get over. LTP is not president of this country for over a decade now, and Vano has vanished, living miserable life of former kingmaker. Find something new to say.

reflective said...

I think that land privatization = success is a fair estimation. I was refering more to the pennies-for-factories that were gifted to the ruling elite's cronies, which also resulted in the dismantling of all industry in Armenia. Note that we are still under blockade now, and I also note that for nearly half of LTP's reign there was a ceasfire.

The banking scandals did not vanish during Levon's regime. Many people lost their saving when shading mafiosos close with the authorities ran off with the peoples' money.

I wonder if not having lived in Armenia during that time makes me any less informed. After all most of the one-sided commentary about teh situation in Armenia today is coming from people who left Armenia (most, ironically from when LTP regime ruled).

And spm, I feel that too many have too quickly forgotton the hell that Armenia was in the early 90s, and no amount of excuses about wars and blockades can excuse willful neglect and hatred of the poeple while the mafia dons ran the country into the ground. Sorry if I tire you, spm.

hn said...

Yes Reflective not living in Armenia during the 80s and mid 90s makes you less informed about that period.

It shows in your claims that some ran with the people's savings.
Maybe you mean the worthless pile of roubles? Or the coupons that were given to people as salaries?

The Armenian CCP existed till September 21 1992. As a soviet Republic we had the GeKaChePe in the August of 1992, still now I dont know why I think it was winter time.

Yes it was a harsh period. But it was we who lived it and not you. So you can't even imagine how it was regardless how sincerely you try to do.
So please stop insulting us who suffered the war and the economic collups and shut up.
Have the dignity to shut up.

Anonymous said...

reflective,
hn is just correct. leave it alone. i respect you as a diaspora trying to actually know your Mother Land - if only there were more like you! - but you are incorrect. try to remember that propaganda works both ways and you've been equally trained to hate ltp no matter what.

the people sold off those factory shares for nothing. judge them if you will, but you will never know or understand unless you've been in those shoes.

reflective said...

So your point is that you who are not living in Armenia now are not competent to comment on life here? On Kocharian and Serj?

Should I be asking you to shut up?

reflective said...

So all the social ills, emigration, murder, unfairness etc during Levon's time was due to soviets or war. All the corruption and graft and imperfect elections now is due to Kocharian.

Is this the essence of the "analysis" from the collected wisdom I missed out on then by not living in Armenia?

hmmmm...

Anonymous said...

reflective:

"So your point is that you who are not living in Armenia now are not competent to comment on life here? On Kocharian and Serj?"

no. this does not necessarily flow from what was said. don't jump to conclusions, unless you're simply looking to instigate needless debate.

"So all the social ills, emigration, murder, unfairness etc during Levon's time was due to soviets or war. All the corruption and graft and imperfect elections now is due to Kocharian."

no. again, you're setting up a false dichotomy, an 'either/or' approach. you give too much credit to one man. the point is that the national economic and wartime picture far outweighed the power of the president. considering the soviet mentality (that still exists btw) we can be sure that things could have been much much much worse. considering time and place, compared the other true soviet republics, ltp was a saint. remember: comparably!! .

again, i ask you to remember your own biases that you'd throw out the overwhelming circumstances of the time and place to lay the blame (and none of the kudos) on one man.

it's quite easy to run a country from your computer in hindsight...

Anonymous said...

There are many mistakes and good decisions both during LTP and during Kocharyan times.

However, what I don;t like is attributing all bads during LTP time to external/uncontrolled factors and the opposite during Kocharyan and vice versa /depending on your political agenda/

1. those who really lived in Armenia or have information about Armenia in mid 80s early 90s know that dram reform in Armenia started in end 1993 while Soviet Union collapsed in 1992. Armenia and Tajikistan were last to introduce local currency and all soviet rubbles inflew in Armenia by all those who had some power. This was a base for hyperinflation caused by a wrong decision. The implementors of these decision were Tigran Sargissian, Levon Barkhudaryan, and Isak Abasich.

2. Bank pyramids started to emerge and as a result population maney were stolen en mass /the infamous Armenia bank and many others/

3. Only after 1996 bank system was balanced thanks to IMF and Central Bank of Armenia /the only effectively established institutions during LTP time + Constitution/

4. Land and cattle privatization was criticized many times. All cattle were "eaten" by hungry population and we lost agriculture sector.

5. However the most blame should go to corruption on "food programs". EU gave food to Armenia to fight hunger. All food disappeared and those who lived in Armenia in beginning of 90's should recall butters, flours, etc packaged as "not for sale" in shops. EU took back all this grants /around 57 million dollars/ in USDs back and regranted it in 1998-1999. So government paid back what thugs stole in 1992-93 to EU in 1998-99. Even some deputy-ministers appeared in Prison after all this case /the infamouse "dvin" concern case, the infamouse Turmenistan-Iran gas clearing transactions, etc/

6. Hrant Bagratyan was the first person in Armenian politics who said we need economy for which I praise him. However those who lived during mid 90s should recall tension between Bagratian and LTP cronies. And LTP cronies want the battle forcing Bagratian to leave Government /Bagrataian could not tax them/. I consioder Bgratian as naive liberal reformist when LTP cronies and thugs were using and abusing his reforms.

7. The large sacale privatization started in 1997-98. The most famouse being Armentel. Both Kocharyan and LTP are guilty in this privatization. And the most fuinny is that both accuse each other. However one name should open some blind eyes "poghpatyan". Were is LTP cadre Poghpatyan? Why LTP is saying that only Kocharyan and SS are his mistakes?

8. Anyway, if LTP era marked with cirruption at middle and small scale privatization, then Kocharyan era marked with corruption of large scale privatization. However staring point Armentel was "joint venture corruption" between LTP and Kocharyan.

9. And on non-privataztion guilts/corruption. The first transaction which was later operationalized by Kocharyan thugs was by Vano-Grzo contract of forcefully buying/selling fire-distinguishers to car owners and Hyundai transactions of Police again between Grzo/Vano. btw this was the first serious capital of grzo family boosted from taxpayers money. So those who lived in Armenia starting from early 90s till now may remember many things.

10. Եվ, որպեսզի չնեղացնեմ ՌՔ/ՍՍ թիմի ատողներին, նշեմ նաև նրանց թիվ 1 «մահացու» տնտեսական հանցանքները. Privatization of Kajaran mining factory /RK/ and Teghut transaction /SS/. If Armentel is possible to somehow tolerate, these transactions are hardly tolerable for me.

nazarian said...

Just to point out that the Soviet era factories that do not function now were designed to be functional in the Soviet Union. I do not know about their financials but it is clear that it is impossible to have them operate and be profitable in an independent Armenia. These were inefficient operations from the start which mainly contributed to low unemployment rate in USSR regardless of the value they added. Add to that that what they produced was archaic and of low quality (uncompetitive in a normal market), it is no wonder that they went down very quickly.

Whatever was a viable operation has remained - take the beer manufacturing, for example - or is slowly being revived. Capitalism is not a stupid system to tolerate value losing operations for too long.

As for who got the proceeds from the scrapped equipment sales, I have to agree with reflective. Quite a few unsavory characters, like the Soviet era managers or the new mobsters, enriched themselves these moneys instead of the state or the citizens.

But it is way in the past and my post was not intended to examine the past. This post is about the current situation and the steps necessary to make sure that country moves ahead in the future.

hn said...

My answer to the reflective's question (below) is yes and no.

"
So your point is that you who are not living in Armenia now are not competent to comment on life here? On Kocharian and Serj?

Should I be asking you to shut up?
"

It will be hard for a person who didnt witness the events on and after February 19th 2008, especially March 1-2 to make judgments on them. So yes people who werent at Liberty sq and in front of the Fr Embassy cant talk on behalf of those who were.

In other aspects it is not as such as in 80s and mid 90s basically because
A)the information flow was limited during that period. There was no Internet.
B) Also the situations were different. in 80s and 90s the situation was more complex on the global and multiangular terms, i.e. the situation effected the largest country in the world (all the republics were interlinked), Armenia specifically was a country in the process of independence, war, blockade and the economic hardship. All those THREE COMBINED made it a very unique situation.

Coming to SerjoRobert years it is mainly a localy matter and thefore not hard to manage.
If Robert followed three basic principles we wouldnt have the current situation.
Resepct people's:
1. property rights 2. freedom of speech and movement 3. freedom of ellections.

Let's put everything else aside. Let's put 80s and 90s aside; it is you reflective who brought it up not me.

At the moment we have a huge crises and the only person who can defuse it is Serj. And the recepie is given to him by PACE.

Anonymous said...

Anonymous writing at 10:53

I can understand your position, but the difference between LTP and RK, that during LTP's government the objective conditions were as bad as they could get, and during RK they were as good as they can get.

Let's remember the objective conditions:
1. 1988 earthquake
2. demise of the USSR
3. war with Azerbaijan
4. blockade + civil wasr and instability in Georgia

During RK's time the objective conditions were favorable:
1. relative stability
2. Armenians who emigrated during LEvon's time, started earning good money and sending it back (smth they couldn't do in 90s because they were not well off enough)
3. high prices of oil - economy boom in Russia - huge money flows from Russia's Armenians
4. the blockade remained in place,
but Georgia became a stable and more or less reliable transportation channel.

Even if my grandmother was president instead of RK, the situation would be better than that during the 1990s.

Yet kocharyan failed to use this situation to make profound improvements in the economy - e.g. to develop industries or IT.

Besides, Levon's government was the first one. Anyone who's had sex more than 1 time, knows that there is a huge difference between the first time, and all the other differences

Anonymous said...

I meant between teh first time and all the other times
I hope you got it

Anonymous said...

>So your point is that you who are >not living in Armenia now are not >competent to comment on life >here? On Kocharian and Serj?

Isn't it obvious that the comments of those who actually live in Armenia right now are much more credible than comments of those who don't live there.

I've been outside of Armenia for 4 months only, and even I find it hard to understand and explain certain things. How can someone who hasn't been in Armenia for years consider him/herself competent enough to make sweeping statements about Armenian politics.

Especially, since Armenian mass media is not as free and developed as for ex. the American one. Still, even with all the CNNs and Newsweeks available worldwide it is hard for anyone who doesn't live in US to understand american politics.

Why do you think you understand Armenian politics well enough when you sources are confined to Haylur, Radio Liberty and a couple of blogs? (in the best case)

Anonymous said...

One more point about RK and LTP comparison:
even though external conditions were favorable for RK, he managed to get the country into 3 major crises during his government.

1. October 27
2. 2003 elections + 2004 protests
3. 2008 elections and following events

All of them were not caused by objective external factors, but were clearly a result of internal developments.

So, even though the slogan of RK-SS is "stability", what RK actually brought was the greatest instability possible to imagine.

p.s. OF course LTP's period was not stabe either, but, as I said this was conditioned not only by internal but mainly by external factors (war, collapse of USSR etc),
while during RK's reign external conditions were stable, and isntability was caused by purely internal factors, which makes RK number 1 responsible for that.

Anonymous said...

What I understood from last post, is that economic situation was conditioned by political factors. I agree with this but I would like to add some facts for balanced approach.

1. During LTP time external political conditions were much favourable, Armenia being considered as island of democracy and all Western countries supporting Armenia in much favourable terms compared to othe SSR countries.

2. There were resolution 907 counterbalancing Armenia blockade

3. It was a result of 1995 and later 1996 elections that Armenia's external political situation worsened.

4. LTP's ideology was not accepting diasporans involvement of politics and many proffessionals who wanted to support Armenia were forced to leave Armenia

5. One of the largets investment in Armenia by diasoprans - "Armentoy" - was fully stolen by some LTP thugs at that time and took years to renegotiate some diasporan investement later.

PS
External conditions depend also on what you do and how you interact with others.

HN said...

"
1. During LTP time external political conditions were much favourable, Armenia being considered as island of democracy and all Western countries supporting Armenia in much favourable terms compared to othe SSR countries.
"
- True. This is because LTP and his team managed to established it.

"
2. There were resolution 907 counterbalancing Armenia blockade
"

- Maybe related to the point one. USA didnt want to stop the existence of the newly born RA. Turkey moved its army on the Armenian Turkish boarder on August,1991 during the days of GKChP.


"
3. It was a result of 1995 and later 1996 elections that Armenia's external political situation worsened.
"

- I disagee. I had close connection with foreign missions after 96 and still in 1997 Armenia was considered as a bastion of democracy. Yes it is true the 96 is a dark spot in our history but we shouldnt forget that it was the same Serje who proposed opening a fire on demonstrators which LTP rejected. Not a single person was injured or killed.
Also the Parliament has been attacked and occupied which is against the foundations of the Republic. I heard with my own ears when Vazgen Manoukyan declared on TV (in 2003 or 2004) that he didnt win the 96 elections. Therefore it was a failed coup by him.
Yes I still think that Levon had to defuse the situation by establishing an investigative comettee or a provisional government.

It is interesting how the USA or an EU country would have reacted if their parlaments were attacked?


"
4. LTP's ideology was not accepting diasporans involvement of politics and many proffessionals who wanted to support Armenia were forced to leave Armenia
"

-- Not true. More diasporans were involved in the Armenian government or policy making than there are now.
Raffi Hovhannisian, Vardan Oskanian, Sharl Aznavour and many more that I know by name.
It is also depends that whay you mean by Diasporans.
Dashnaktsutyun was banned because they were unconstitutional, I dont know any country in the world that has a political party with an HQ in abroad.
Hnchakian and Ramkavar Parties faced no problems in establishing and getting involved in Armenian politics. They moved their HQs to Armenia.


5. One of the largets investment in Armenia by diasoprans - "Armentoy" - was fully stolen by some LTP thugs at that time and took years to renegotiate some diasporan investement later.


-- How big was that investment?
What do you mean by "LTP thugs"? can you give names and bring facts? In the same success I can say that LTP discovered a new planet.
A far more number and bigger companies were established in Armenian before 97.
Please look at the Appendix D of the following report http://www.wtm.com/country.cgi?Country=ARMENIA
If compaired to nowdays it was a business paradise.
nowdays when you start a successful business you will be forced out. I personally know at least 6 enterpreneurs who were forced out or didnt start a business because they knew they would be forced out as soon as they became successful.
We all know many other well known cases such as Royal Armenia, the mobile phone imports, VivaCell and many many others.

Anonymous said...

oh yeah - it was paradise. everyone lived great in the early 90s. lots of investments...we even gave away armentel so that we can be sent into the stone ages in telecom, phone, internet.

exports to turkey were high while armenians starved.

i agree that levon's time busines was booming. like anonymous, we got nice factories to liquidate and get rich. now in la with ferraris while harif went to fight in karabakh and die.

very convincing, anonymous.

Anonymous said...

i mean:
very convincing, hn.

hn said...

"If compaired to nowdays "

try to start a business or bring more than 1 mobile phone with you to Armenia from let's say Dubai.
Your mobile phone will be confiscated.
go and eve try to import a carload of fruit from Georgia. You will be forced to pay an "import duty" that will set you in loss.
I am talking about small and medium businesses.

hn said...

defenders of the current regime read this:
http://armenianow.com/?action=viewArticle&AID=3033&CID=2944&IID=1186&lng=eng
100s of people were made homless.

Anonymous said...

/// - True. This is because LTP and his team managed to established it.///

Can you give the means and actions of LTP and his team on how he/they reached this perception of Armenia??? In my opinion it was simply granted.


/// - Maybe related to the point one. USA didnt want to stop the existence of the newly born RA. Turkey moved its army on the Armenian Turkish boarder on August,1991 during the days of GKChP.////

You are missing some dates. It was not in 1991. It was later and thanks to Russian /The only case/ when they announced about counteraction if turks intervene and possible WW3 as escalation. btw LTP worsened Armenia relation with Russia /infamous LTP speach re Russia/ and it took some Armenian efforts in Moscow to solve the tense.


///- I disagee. I had close connection with foreign missions after 96 and still in 1997 Armenia was considered as a bastion of democracy. Yes it is true the 96 is a dark spot in our history///

This is relational. If you mean Armenia compared to Azerbaijan, then you are right. If you mean Armenia of 95-96 vs Armenia of 92-93 then you are wrong. So thanks to Azerbaijan stupidity over Armenia. And now it is OIL vs Armenia democracy. My point is that the momentum of being bastion of democracy was lost by LTP and after oil factor it is hell difficult for our IR.

///but we shouldnt forget that it was the same Serje who proposed opening a fire on demonstrators which LTP rejected. Not a single person was injured or killed.///

Did LTP mentioned (manipulated) Serj? Whatever. And why LTP didn't punish Serj? Why he considered him his teammate? Why he used Serj factor against people as head of KGB?

///Also the Parliament has been attacked and occupied which is against the foundations of the Republic.///

agreed. Thats why I am against revolutions be it dancing/singing or violent one.

//// I heard with my own ears when Vazgen Manoukyan declared on TV (in 2003 or 2004) that he didnt win the 96 elections. Therefore it was a failed coup by him.////

Have no information but he said smth different recently.

/// Yes I still think that Levon had to defuse the situation by establishing an investigative comettee or a provisional government.////


LTP invited RK to change situation re his thugs and uncontrolled ministers and marzpets.

///It is interesting how the USA or an EU country would have reacted if their parlaments were attacked?///

Good point, Unfortunately EU doesn't care of his own standards otherwise they will never call detainees as 'political prisoners'. They have their interests and it is not democracy building.


///Not true. More diasporans were involved in the Armenian government or policy making than there are now.///

I was talking about professionals and not political figures. Are you familiar on how soveticus ministers approaching diasporans? Do you know on how some diasporans were pretending as foreigners to be respectfuly accepted by some ministers. I do not want to generalize but the real professional power of diasporan /western educated/ armenians were dismissed and the momentum was lost again.


///Dashnaktsutyun was banned because they were unconstitutional, I don't know any country in the world that has a political party with an HQ in abroad.////

This is long debate.


////How big was that investment?
What do you mean by "LTP thugs"? can you give names and bring facts? In the same success I can say that LTP discovered a new planet.///

If you don't know the case of "Armentoy" then are you sure you lived in Armenia?

///A far more number and bigger companies were established in Armenian before 97.
Please look at the Appendix D of the following report http://www.wtm.com/country.cgi?Country=ARMENIA
If compaired to nowdays it was a business paradise.///

Let me quote from mentioned document:

"In 1996, according to the official Armenian statistics (highly unreliable),"

"In 1996, aside from telecom, there was no single institutional investment recorded."

"They will be replaced by small new production companies which will emerge in the second half of 1997- beginning of 1988 as the proper financial environment improves."

"American-Armenian relations are excellent."

"In September 1996, following presidential elections, a number of incidents took place where both the opposition, which disagreed with the election results, and the government resorted to violence. Though the tensions have receded and a reconciliation process is underway, the events negatively affected the image of the country and prompted hesitation among some investors."

"Despite severe penalties, bribery is widespread and the most common form of corruption. Heavily involved sectors include government procurement, all types of transfers and approvals as well as business-related services such as company registration, licensing, and land or space allocation. It may also take a bribe and/or a word of a high-ranking acquaintance to get certain positions, the amount depending on the position’s “money generating” potential.

Relationships between high ranking government officials and the emerging private business sector is another fast growing phenomenon, establishing influence peddling between officials and private firms from which they benefit. Powerful officials at the central, district or local levels are acquiring direct or indirect control, or partial control over emerging private firms. Such control may be exercised through a hidden partner position, or through majority ownership in prosperous private companies. The involvement can also be performed indirectly - through close relatives and friends. These practices promote protectionism, creation of monopolies or oligopolies, hinder competition and undermine the image of the Government as a facilitator of private sector growth. "


////nowdays when you start a successful business you will be forced out. I personally know at least 6 enterpreneurs who were forced out or didn't start a business because they knew they would be forced out as soon as they became successful.////

This is called self-fulfilling prophecy. Please, understand me correctly, I am not saying that it is paradise now, but I do not buy in that LTP was angel and his period was paradise in comparison with what is now.


///We all know many other well known cases such as Royal Armenia, the mobile phone imports, VivaCell and many many others.///


Yes, and we should fight for all those cases and systems and don't blindly believe in "revolution will change all those" miracle.

Anonymous said...

hn

you wrote ///defenders of the current regime read this:
http://armenianow.com/?action=viewArticle&AID=3033&CID=2944&IID=1186&lng=eng
100s of people were made homless.///

May I ask stop generalizing? I am not defender of current regime. Also the writer of that article Vahan Ishkhanyan was labeled "as defender of current regime" since he is against all this dancing revolution?!

How would you feel if I generalize and say all LTP-akans as "destructors of Armenia state"?

I value this blog mainly due to the pluralism allowed and accepted in. If someone has different view on LTP movement, on LTP and/or whatever it doesn't make him/her "current regime defenders"

PS
btw There is only one regime in Armenia. The one created by LTP which is still alive.

Anonymous said...

I'm reading some of the stuff here, and I lived in Armenia for the whole of LTP's "rule" mind you, and some of the things are breaking news to me. We wonder how the history of the genocide got so mangled in 93 years? Well we are seeing the history of the '90s rewritten in front of our eyes. I don't even know what to say except that all this would make great fiction books some day.

Reflective, I have to hand it to you. If someone wrote "the sky is blue in Armenia today", you'd probably counter that we need to remember that the sky was also blue during LTP's time, and that he and his "cronies" lay the foundation for it to be as blue as it is today. Let me just remind everyone that LTP and his cronies were there for 7.5 years and left when they were told to, while RK and his cronies have been here for over 10 years and show no intention of leaving.

...Going back to the original topic, Armenia today isn't an indictment on capitalism, it's living proof that capitalism is the only system that works. Before we rail against capitalism, let's note that what we have in Armenia is ages and miles away from it. Artificially set exchange rates, interest rates, consumer prices are decidedly not characteristics of capitalism, and neither is pricing imports based on your political views.

spm said...

Some excellent posts since I last visited this page.

I must add for those who compare LTP privatization and RL privatization. Apart from land there was very little to be privatized in Armenia during the war. And it is a lesson of capitalism, there was no demand, so whatever was privatized, was bought by poor local investors for pennies. No foreign capital was interested in Armenia in 1991-1995, till war ended, and some stability start to appear. The first big privatization was of Armentel, and with all wrongdoings related to it it was more like a favor from greeks than actual commercial interest. Risks were too hight, return too uncertain.
Meanwhile during RK period war was firmly extinguished, agriculture picking up thanks to excellent land privatization and establishment of HSBS and Coca-Cola thanks to Armen Sarkissian and Vache Manukyan demonstrated that Armenia is reliable and can be a investment target. How RK used that advantageous situation? He gave everything large and worthy free of charge to Russians, while himself and his cronies capitalize on monopolizing the imports.

Anonymous said...

LTP privatization = telman gets everything for free, grzo gets everything for free, vano threatens or kills you if you wish to invest in armenia but outside the iron grip of the mafia controlled country.

now there is still some of that, but ask microsoft, synopsys, german mining companies, viva-cell, the (civilized) argentinean airport, etc etc. gone are the days of diasporans being fleeced, of foreigners being excluded from the investment climate. tourism is up, the country is moving forward.

R said...

Unfortunately the days of diasporans being fleeced appear to still be with us. For this who read French an article this week in Nouvelles d'Arménie online entitled 'Closing of Café de Paris in Yerevan' details how the owner, a French-Armenian of the well known café on Abovian Street, is throwing in the towel after 13 years in Armenia. She alleges that her local partner has defrauded her and she is unable to obtain justice from the legal system.

http://www.armenews.com/article.php3?id_article=40988

reflective said...

Well for what it is worth, I find partner-gone-sour situations different from having an would-be-investor being threatened with his life a la Armentoy among many others in the early 90s.

Anonymous said...

Well, Armenia is still not quite the hotbed of foreign investment, is it? If you read any literature on this, the cost of doing busines in Armenia (in terms of bribes and ridiculously high import and export fees), coupled with complete lawlessness, too much red tape and unpredictable business environment make it an unattractive spot for investing (and that's putting it mildly).

And it's completely irrelevant how independent Armenia, ravaged with war, a few years removed from its Soviet past, without any reliable source of electricity, gas or heat, without transportation, under increasing international calls to stop the war offensive in Azerbaijan fared in terms of foreign investment. Enough of this, but in LTP's time, blah blah blah...Times have changed, but little else has.

And actually, the diaspora is still being fleeced pretty routinely. If during LTP's time they were sparsely allowed in, during RK's time they are welcome with wide open arms, taken advantage of, and sent on their merry way. Further, and even more sadly, I know people who've tried setting up ventures there, but all the locals are interested in earning money without having to work.

reflective said...

Anonymous - I agree that the investment climate has a long way to go to become healthy. It is all relative. My own opinion is that it has never been better (as bad as it is). This may be because of or despite the government.

The assessment is actually not based on my or your opinion, it is the opinion of the sum total of investors, which thankfully is growing. I think the new government will be more proactive and inviting than the previous, but time will tell.