Երեքշաբթի, հոկտեմբերի 21, 2014 Ժամանակը Երեւանում 06:11

in English

Diaspora Tycoon Slams Armenian ‘Monopolies’

Armenia -- Vahak Hovnanian at a press conference in Yerevan. 12Jun2012
Armenia -- Vahak Hovnanian at a press conference in Yerevan. 12Jun2012

A prominent Armenian-American businessman sounded alarm bells on Monday over what he sees as a lack of competition in Armenia, saying that it could spell serious trouble for the country’s economy.

Vahak Hovnanian singled out the monopolization of lucrative imports of goods by “a handful of people” close to the government. He declined to name any of them, though.

“That could have deadly consequences for the economy,” Hovnanian warned in an interview with RFE/RL’s Armenian service (Azatutyun.am). “I maybe going to extremes but I want people to take note.”

“The monopolies must be broken up,” he said. “Competition is what drives countries forward. There is no competition here. We can’t move forward in this way.”

A lack of a level playing field for all entrepreneurs has long been regarded as a key hindrance to Armenia’s economic development. Despite repeated government pledges to improve the domestic business environment many lucrative areas business remain controlled by government-linked tycoons commonly called “oligarchs.”

A World Bank report released last November concluded that Armenia has the most monopolized economy in the former Soviet Union and Eastern Europe. It said de facto monopolies control 20 percent of economic activity in the country.

“Nobody can fail to see this. It’s so evident,” said Hovnanian. The problem is scaring away many foreign investors and, in particular, entrepreneurs of Armenian origin, he added.

Hovnanian has been based in Armenia for more than a decade. He is primarily known in the country as the founder and owner of an upscale residential district located on the western outskirts of Yerevan.

The elderly businessman and his three brothers are the founders of the New Jersey-based Hovnanian Enterprises, one of the largest homebuilding companies in the United States.

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