The existence of business monopolies is inevitable in a country like Armenia and the authorities in Yerevan are therefore not seeking to eliminate them, Economy Minister Karen Chshmaritian said on Wednesday.
“The government has not fought and will not fight against monopolies,” he told a news conference. “Our legislation and policies are aimed instead at tackling abuse of monopolist positions, price collusion and other practices specified by the law.”
“Should we not allow the emergence of monopolies? That’s not possible in Armenia,” insisted Chshmaritian.
Some lucrative forms of business in Armenia, notably imports of fuel and foodstuffs, have long been controlled by large companies belonging to government-linked individuals. Local and foreign economists say the resulting lack of competition in those sectors translates into disproportionately high prices and hampers faster economic growth.
A World Bank survey released in 2013 said that oligopolies control 20 percent of economic activity in Armenia, making it the most monopolized economy in the former Soviet Union. World Bank officials have repeatedly called on the Armenian government to create a level playing field for entrepreneurs in all sectors.
In particular, the existence of de facto monopolies is widely blamed for the fact that the retail prices of gasoline in Armenia have dropped by only about 20 percent since oil prices began rapidly falling in summer 2014. The oil prices have tumbled more than three-fold in the past 18 months.
Levon Zurabian, a leader of the opposition Armenian National Congress (HAK), challenged the government to explain this huge price disparity during a question-and-answer session in parliament on Wednesday. “Because of this deliberate monopolization, the Armenian economy is now choking,” he said.
Armenia - President Serzh Sarkisian (L) visits a new sugar refinery built by businessman Samvel Aleksanian (R).
Deputy Prime Minister Vache Gabrielian told Zurabian that the government has asked the State Commission on the Protection of Economic Competition (SCPEC) to investigate the gasoline prices and determine just how market-based they are now. The anti-trust body has rarely slapped major fines on lucrative firms holding dominant positions in their respective sectors.
Another opposition lawmaker, Nikol Pashinian, decried a monopoly on sugar imports to Armenia that has long been enjoyed by Samvel Aleksanian, one of the country’s richest men affiliated with President Serzh Sarkisian’s Republican Party (HHK). Pashinian pointed to “lingering rumors” that Aleksanian is massively evading taxes and that Sarkisian has a “personal share” in the tycoon’s revenues.
The chief of the government staff, Davit Harutiunian, brushed aside the allegations, saying that Pashinian is only keen to score political points with false statements.
Sarkisian reportedly defended the sugar monopoly when he met with members of the Armenian community in the Czech Republic during a September 2014 visit to Prague. “Do you want a dozen people to import sugar to a small country?” the “Aravot” daily quoted the Armenian president as saying.