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Armenia Drops In Global Competitiveness Rankings


Swiss. Participants arrive at the congress centrre prior to the opening of the World Economic Forum in Davos. Junuary 21, 2014.

Swiss. Participants arrive at the congress centrre prior to the opening of the World Economic Forum in Davos. Junuary 21, 2014.

Armenia’s economy has become slightly less competitive over the past year due to lingering problems with the rule of law and unequal conditions for doing business, according to an annual global survey.

Armenia ranks 85th in the latest Global Competitiveness Index (GCI) of 144 economies compiled by the Geneva-based World Economic Forum (WEF), down from 79th place it occupied last year and 82nd in 2012.

The country continues to lag behind of all its four neighbors, according to the WEF. Two of them, Azerbaijan and Georgia, are 38th and 69th respectively in the annual rankings.

The WEF assigns each of the countries surveyed a GCI score based on 12 “pillars of competitiveness.” Those include the efficiency of public institutions and the labor market, the macroeconomic environment, the quality of infrastructure, public healthcare and education as well as innovation.

Armenia fared particularly poorly in subcategories of the survey gauging judicial independence, the extent of corruption in tax collection, and government efforts to combat de facto economic monopolies. In particular, it is 105th on the global scale in terms of the “effectiveness of anti-monopoly policy,” down from 97th place it occupied in the last GCI. At the same time Armenia was assigned a considerably higher score on the “intensity of local competition.”

Successive Armenian governments, including Prime Minister Hovik Abrahamian’s cabinet formed in May, have pledged to create a level playing field for all businesses. Nevertheless, some lucrative sectors of the domestic economy remain controlled by wealthy businesspeople close to the government.

The WEF also acknowledged the simplicity of enterprise registration in Armenia. It was rated among top 10 economies of the world in terms of time and the number of legal procedures required to start a business.

The Armenian government reacted to the WEF report on Friday, with Economy Minister Karen Chshmaritian saying that officials are now looking into its findings. “This survey is one of the important guidelines for our work,” he said.

Speaking to journalists, Chshmaritian suggested that Armenia dropped in the competitiveness rankings primarily because of regional developments, rather than internal government policies.

Vahagn Khachatrian, an economist affiliated with the opposition Armenian National Congress (HAK), agreed with the survey’s main conclusions. “That Armenia has problems with competitiveness is clear to everyone,” Khachatrian told RFE/RL’s Armenian service (Azatutyun.am).

“Monopolies continue to play a dominant role in our economy,” he said, adding that the government has so far done little to break them up.

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