The Armenian government pledged to lend more support to small business on Wednesday, with Prime Minister Tigran Sarkisian reiterating that its expansion is essential not only for the country’s economic development but also democratization.
“The development of small and medium-sized businesses also aims to create a middle class in the Republic of Armenia that will play a substantial role in political and economic reforms,” Sarkisian said. “Experience shows that the middle class has been and remains the main driving force of reforms.”
“In terms of forming a civil society, we think that it is not possible to achieve serious success without having small and medium-sized businesses,” he added.
Sarkisian similarly described small and medium-sized enterprises (SMEs) as a “reliable backbone of civil society” in a speech last April.
His latest comments on the subject came at the first meeting of a government council tasked with supporting small business. The body headed by Sarkisian comprises government officials, private entrepreneurs and representatives of international organizations.
The premier acknowledged that there are still “numerous obstacles” to the development of SMEs in Armenia. He said the council will seek to elaborate ways of eliminating them.
Its first meeting identified ten specific problems facing entrepreneurs. Those include cumbersome procedures for liquidating companies.
Some council members noted that by contrast enterprise registration in the country is quite easy. “You can now very quickly register a company from a single [government] ‘window,’” Karen Martirosian of the Yerevan Chamber of Commerce told RFE/RL’s Armenian service.
Another council member, businessman Albert Poghosian, complained that Armenian tax legislation grants no privileges to newly established SMEs. In Britain, he said, such firms are exempt from taxes during the first two years of their operations.
Growth of local SMEs is also hamstrung by the country’s broader business environment that still favors large companies owned by government-linked businessmen. Armenia ranked 48th of 183 countries covered by a recent World Bank survey on the ease of doing business around the world.
The Armenian authorities and Prime Minister Sarkisian in particular have repeatedly pledged to improve the domestic investment climate.