The U.S. Agency for International Development (USAID) stressed the importance of opening up the Armenian economy to more competition on Wednesday, saying that this will be a key focus of its aid programs in the coming years.
The U.S. government agency plans to finance up to $120 million worth of reform projects in Armenia from 2013-2018. Its mission director for the country, Karen Hilliard, said strengthening competition will be one of their key aims.
Hilliard called “unacceptable” the existence of de facto monopolies widely seen as a serious hurdle to faster economic development. “That’s why we are focusing on it,” she told a news conference.
Some lucrative forms of business in Armenia have long been effectively monopolized by wealthy entrepreneurs connected to the government. Their grip on the national economy has hardly eased in recent years despite repeated government pledges to enforce a level playing field for all businesses.
A World Bank survey released late last month said that oligopolies control 20 percent of economic activity in Armenia, making it the most monopolized economy in the former Soviet Union. Armenian state regulators enforcing anti-trust measures disputed this assertion.
Echoing statements by U.S. Ambassador John Heffern, Hilliard hailed the recent liberalization of Armenia’s civil aviation sector, which followed the bankruptcy of the Armavia national airline. She expressed hope that similar progress will be made in other sectors as well.
Hilliard also implied that Armavia should not be replaced by another domestic carrier enjoying government protection. “None of us in the international community are against the idea of Armenian carrier. But we are against the idea of a monopoly,” she said.