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U.S. Envoy Calls For More Competition In Armenia


Armenia - U.S. Ambassador John Heffern delivers a speech in Yerevan, 02Apr2012.

Armenia - U.S. Ambassador John Heffern delivers a speech in Yerevan, 02Apr2012.

U.S. Ambassador John Heffern stressed on Friday the importance of liberalizing lucrative sectors of the Armenian economy that have long been dominated by a handful of large companies or individual entrepreneurs.

Heffern said the U.S. Embassy in Yerevan is raising the matter with the Armenian authorities “all the time.” “We have an open and professional discussion of all these issues,” he told reporters. “They are committed to make reforms, and we are going to continue to assist them with those reforms.”

“When Armenia went from one cellphone company to three, what happened? Service improved and prices went down. And I think that’s a principle for sugar, airlines and everything else,” he said during a visit to a Coca Cola bottling plant in Yerevan.

In a brief speech at the company’s premises, Heffern singled out the need for liberalizing the lucrative sugar market.

The bulk of sugar imports to and production in Armenia are controlled by companies belonging to Samvel Aleksanian, one of the country’s richest men close to the government. Aleksanian also controls imports of wheat and other basic foodstuffs thanks to what government critics regard as his privileged treatment by the government.

In a strongly-worded article circulated this week, the International Monetary Fund (IMF) said “well-connected” entrepreneurs enjoying “privileged market position” are a serious hindrance to Armenia’s economic development. It called for “deep and swift” reforms” that would create a level playing field for all businesspeople and improve tax administration.

Heffern likewise stressed the need for tax reforms. “We are working with the [State Revenue Committee] on taxes and customs, but of course there is more that could be done,” he said.

Gagik Danielian, the Coca Cola plant director, told journalists that the work of tax officials dealing with his company has become more “predictable and transparent” in recent years. Still, he said the company occasionally grapples with problems resulting from the enforcement of new tax laws and regulations.

Danielian also insisted that the Russian-owned company has never had trouble importing sugar needed for the production of its soft drinks.
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