He said the regulatory State Commission on the Protection of Economic Competition (SCPEC) has not done enough to address a lack of competition in some key sectors of the Armenian economy, which is widely regarded as an impediment to its faster growth.
The Armenian parliament approved recently, in the first reading, a set of legal amendments that will give more powers to the SPEC and considerably increase financial penalties for unfair business competition. They were drafted last year by a government task force comprising World Bank experts.
Sarkisian said the SPEC must “immediately expose the situation reigning in a number of areas preoccupying our public” and “audaciously” enforce the amendments once they come into effect. Speaking at an international seminar in Yerevan, he complained about a lack of public trust in the regulatory body.
Under the existing Armenian legislation, companies found to be engaging in unfair competition must be fined only 500,000 drams ($1,320), while those abusing their “dominant position” in a particular sector risk penalties equivalent to 2 percent of their annual operational revenues.
SPEC officials have complained that these sanctions are too soft to prevent the formation of business cartels, price collusion and other illegal practices. The commission chairman, Artak Shaboyan, on Monday emphasized the importance of the changes tentatively adopted by the National Assembly.
Sarkisian indicated that even the existing legal instruments have not been fully and consistently used by the SPEC. “If we expose instances of unfair competition but do not apply sanctions or if such practices are not eliminated, this will erode public trust not only in the SCPEC but state structures in general,” he said.
The premier gave no concrete examples of unfair competition not punished by the SPEC. He reiterated only that the improvement of Armenia’s broader business environment remains one of the government’s chief priorities.
Relevant measures taken by his government have yet to have desired effects. In recent months, the International Monetary Fund and other multilateral lending institutions have urged the authorities in Yerevan to embark on more sweeping structural reforms.
Arsen Ghazarian, chairman of the Armenian Union of Industrialists and Manufacturers, said his business association is “far from being satisfied with the results” of government reforms implemented so far. “But what I find important is that the government is trying to consistently stick to this [reform] agenda,” he told RFE/RL’s Armenian service.
The government’s political opponents point to the continuing de facto monopolization of lucrative forms of business such as fuel and food imports by wealthy entrepreneurs close to Armenia’s leadership. They claim that the authorities are therefore not serious about enforcing fair competition.
“Apart from nice words uttered in public, nothing has been done [by the government,]” said Bagrat Asatrian, an opposition-linked economist. “Our country is in urgent need of systemic changes which are unfortunately not being introduced.”