The head of Armenia’s state anti-trust watchdog claimed on Wednesday that membership in a Russian-led customs will strengthen competition in the country that has long been hampered by the privileged position of its wealthiest entrepreneurs.
Artak Shaboyan, the chairman of the State Commission for the Protection of Economic Competition (SCPEC), strongly disagreed with critics of Armenian entry into the union who believe that it will only worsen the domestic business environment. “On the contrary, joining the Customs Union will play a great role in the development of competition and weakening of market centralization,” he insisted at a year-end news conference.
“Production volumes don’t rise and large-scale investments are not made in our country for the simple reason that our internal market is small and it is quite difficult for businesses to sell their products,” said Shaboyan. “Membership in the Customs Union will open up great opportunities for them in terms of gaining access to export markets.”
Critics will counter that Armenia already has a free-trade regime with Russia and the union’s two other member states: Belarus and Kazakhstan. They will also argue in all three ex-Soviet states big business is closely connected to the ruling regimes and dominates key sectors of their economies.
Russia, Belarus and Kazakhstan have for years fared worse than Armenia in global surveys of investment climates conducted by the World Bank and other international institutions. Successive Armenian governments have been criticized by Western donors for not doing enough to create a level playing field for all businesses. They have also pointed to the de facto monopolization of lucrative sectors of the Armenian economy by a handful of government-linked tycoons.
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. Shaboyan’s commission, which is tasked with enforcing anti-trust measures, disputed this assertion.