Fight for Demonopolization: Expert says political decisions needed to deal with market “concentration”

Photo: Media Center

While the Armenian government is taking steps to regulate “high concentration” areas of the economy, many in the country still remain skeptical about its having the necessary political will to fight against corruption and monopolies.

Prime Minister Hovik Abrahamyan on Thursday instructed the economy minister to develop within a month guidelines with detailed description of importation procedures related to a number of essential goods whose trade in Armenia is perceived as monopolized. Among these goods he mentioned sugar, flour, wheat, cooking oil, rice, buckwheat, butter, margarine, bananas, oranges, baby formula, poultry, medicines, petrol and diesel fuel.

At the government session, the prime minister said that while the above-mentioned markets were formally not monopolized, they were still perceived as such by the public.

“The reason is that there is a high degree of concentration in the commodity markets, which leads to such risks as disruption of competition, ousting of small and medium-sized enterprises from the market and limitation of access for new companies, the violation of consumer rights, corruption, unjustified fluctuations in prices and finally damage to the country’s overall economy,” the premier said, adding that the government will not limit itself to the mentioned goods only.

The prime minister also instructed the Ministry of Economy and the State Revenue Committee to discuss and present within a two-month period a concept of what additional regulations should be applied in the import-wholesale-retail trade chain, which will exclude the imposition by large companies of their rules on the market. In particular, he suggested considering the idea of prohibiting large companies from being engaged in wholesale and retail trade at the same time.

According to Economy Minister Artsvik Minasyan, who represents the Armenian Revolutionary Federation, a party that, in particular, espouses socialist ideas, commodities were singled out based on their social importance, and the government should carry out work to regulate their sales beginning from the point of importation to wholesale and retail trade.

Photo: Photolure
Photo: Photolure

“Every commodity should have free access at the border. Transition from wholesale trade to retail trade cannot take place in unequal conditions. That is, if one entity, which is an importer and can sell the imported goods through his commercial network, then the same should be for other commercial networks,” Minasyan told journalists at a news briefing on Thursday, adding that to achieve this, it is necessary to change the legislative regulations.

“There should be equal opportunities for all, this is the meaning of the instructions and we are going to work in this direction. The customs value must be the same for all economic operators importing the same commodity,” he added.

However, representatives of Armenia’s opposition and business community, as well as a considerable number of experts remain skeptical about the government initiatives first revealed by Premier Abrahamyan on May 12.

According to Hayk Gevorgyan, an economic analyst writing for the pro-opposition Haykakan Zhamanak daily, the fight against corruption and monopolies so far has been around “formalities”.

“I believe that in this struggle the last thing they need is legislative amendments, as monopolies and corruption in Armenia have a highly structured and defined system, whose parts are merged into each other. And the magic wand is not in the field of legislation,” Gevorgyan said during a discussion at Yerevan’s Media Center on Thursday.

The economic commentator believes that both corruption and monopolies have been created in the first place with permission of political authorities and can be removed only with political decisions.