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Economy Minister Tigran Davtian rejected on Wednesday calls for the establishment of a new government ministry that would specifically deal with information technology (IT), a major export-oriented sector of the Armenian economy.

The chief executives of about 200 IT firms operating in Armenia advocated the idea in a recent joint appeal to President Serzh Sarkisian and the National Assembly. They said the sector’s further development requires a more coordinated and targeted government assistance.

“I am not only against the idea but also think that it is absolutely artificial,” Davtian told RFE/RL’s Armenian service (Azatutyun.am). “There are no grounds for raising such an issue. The existing system of state governance is absolutely adequate and sufficient for solving all issues related to the development of the IT sector.”

Davtian argued that two of his recently appointed deputies deal with the IT industry and that the creation of a separate ministry would be a waste of scarce public resources. He said he has met the heads of the sector’s all major companies and convinced them that there is no need for the ministry.

Karen Vartanian, the chairman of an association of Armenian IT enterprises who initiated the joint appeal, disagreed. “There are big problems and numerous challenges that need to be addressed,” he said. “That cannot be done without the state’s involvement.”

“Our sector pays $80 million in taxes each year and I think that 1, 2 or 3 percent of that money can be easily used for financing such a state body,” Vartanian told RFE/RL’s Armenian service.

According to government data, the sector currently consists of over 280 mostly small and medium-sized companies. More than 100 of them have foreign owners, including major U.S. software development firms such as Synopsis. The industry employs some 6,700 people and posted $205 million in combined earnings last year.

The Armenian government declared its development a top economic priority a decade ago. The sector has expanded robustly in recent years thanks to a rapid spread of Internet service access in the country. Davtian said its growth will continue unabated in the years to come.

In a potentially serious boost to the sector, the government approved in February profit tax breaks for IT companies investing in innovation. Under that measure, expenditures made on new software development and other innovative solutions are to be deducted from their taxable income.
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