U.S. Ambassador John Heffern has urged Gyumri’s new Mayor Samvel Balasanian to put in place “an open and transparent system” of governance, saying that foreign investors and development agencies have been reluctant to do business in Armenia’s second city.
Heffern visited the unemployment-stricken city on Thursday to meet with Balasanian and discuss his socioeconomic agenda and ways of boosting the struggling local economy. “International partners have been reluctant to work here in the last few years,” he told the mayor, seemingly alluding to the controversial rule of Balasanian’s predecessor Vartan Ghukasian.
Ghukasian’s 13-year tenure, which ended last month, was marred by scandals and controversies. Critics, including independent media outlets, have accused him of leading a clan that controls much of the local economy and tolerates no competition.
Balasanian, who is affiliated with the opposition-leaning Prosperous Armenia Party but backed by President Serzh Sarkisian, claimed to have uncovered instances of serious financial abuses in the municipal administration shortly after taking office following local elections held in September.
The new mayor urged Heffern to help attract U.S. investments in Gyumri, which has one of the highest unemployment rates in Armenia and has still not overcome the devastating consequences of a 1988 earthquake. “I am ready to allocate land to businesses for 1 dram per hectare so long as they create jobs,” he said. “We are ready to give them privileges and other opportunities.”
The envoy replied that while tax incentives are important, potential U.S. and other foreign investors primarily need credible and trustworthy local partners. The existence of “an open and transparent system” is therefore essential for luring them, he said.