Fair competition would not only translate into more tax revenues but also speed up economic growth in Armenia, Prime Minister Tigran Sarkisian said on Thursday, making yet another pledge to improve the country’s investment climate.
Chairing a weekly session of his cabinet, Sarkisian said strong antitrust measures will be “essential” for the success of the Armenian government’s plans to collect more taxes and boost budgetary spending next year.
“If we succeed in ensuring fair conditions for competition, then obviously we will have faster economic growth,” he told government ministers and other senior officials.
Earlier this year, Sarkisian’s government pushed through parliament legal amendments that gave more powers to the State Commission for the Protection of Economic Competition (SCPEC). They considerably increased financial penalties for unfair competition practices.
Sarkisian demanded at the time a strict enforcement of the changes, which were drafted last year by a government task force comprising World Bank experts.
The SCPEC chairman, Artak Shaboyan, told the cabinet on Thursday that the regulatory body has since drastically increased the number of sanctions imposed on companies found guilty of violating competition rules. He said they have been ordered to pay a total of 230 million drams ($613,000) in fines, a sixfold increase over the full year 2010.
According to Shaboyan, 19 of the 86 punitive decisions made by the SCPEC in January-September were challenged in court. Armenian courts have already ruled on eight such lawsuits and all of those verdicts favor the regulators, he said.
While touting the amended legislation as a success, Shaboyan called for the adoption of new government regulations related to its implementation. Sarkisian expressed readiness to give the commission “new levers” provided that the government sees evidence of an improving competition environment in the country.
Shaboyan also said that the SCPEC has examined this year 12 markets for different consumer goods -- including dairy products, eggs, coffee, and even construction materials -- with “a high degree of centralization.” The commission has primarily targeted large-scale importers and manufactures of these products, he claimed.
A lack of competition has been particularly palpable in imports of fuel and basic foodstuffs such as wheat and sugar. They have long been tightly controlled by a handful of rich entrepreneurs close to the country’s ruling establishment.
So far there has been little evidence of these de facto monopolies being broken up by the Armenian authorities. Their existence is facilitated by endemic corruption within the national customs service.