Time to forget international organizations
Many state officials and primarily the Prime-Minister, are paying much attention to reports of renown international organizations and to their best to make sure Armenia is advanced in their rating lists.
Some high ranking state officials were relating to this issue with such great passion that from time to time it seemed that improvement in rating evaluations was more important that real improvement in Armenia’s performance. An example is the Heritage Foundation’s Economic Freedom Indices that the Prime-Minister refers to from time to time. As soon as it became known that Armenia advanced in the list by one position, taking the 38th position in 2013, Prime-Minister Tgran Sargsyan referred to the report and in a government session on January 10th, 2013, said, “We have improved our positions in relation to economic freedom indices, which gives us hope that we can be more successful in reforms. Investors pay a lot of attention to this index, thus improvement of our rating is a significant achievement.” Looking at media publications of the previous year’s shows that this report has always been discussed by government officials.
Based on the reaction of Armenian officials concerning this report and indices it was believed that economic freedom indices were an essential factor for Armenia’s development. Notwithstanding the critic saying that for an economy like this it is not good to have too much liberal markets, the role of this report should not be exaggerated either.
Now, it turns out that the high ranking officials that have been considering economic freedom indices so important are depriving Armenia of economic freedom: the Customs Union is a close institution and there is full economic freedom between the member states, and for the outer part of the world it may be considered a close system with complicated customs policies and fees.
For the reason above, in the economic freedom report 2013 Kazakhstan, a member of the Customs Union, occupied 68th place, Russia – 139th, and Belarus – 154th place. To note, Armenia is in the 38th place and the government was hoping to reach the level of Georgia being at the 21st place in the list.
In case of joining the Customs Union and adopting the rules of their game Armenia will drop down in the list of economic indices. Another report the PM likes is Doing Business report published by the World Bank. Officials are praising Armenia’s advancement in this list due to a new adopted policy of easy registration of businesses and other innovations.
Armenia’s improvement in Doing Business report was a significant achievement as by reaching the 32nd place Armenia left behind several European countries. Certainly it did not help to increase the capacity of investment inflow.
Where do the countries in Armenia’s future organization family belong to in this list? Kazakhstan is in 49th place, and Belarus is in 58th place. Russia is in 112nd place.
Certainly Armenia’s position in the report list will not improve by joining an organization, the founding members of which are in lower positions in the rating list. Same is true about their reports concerning corruption, human rights, demography, etc. In all mentioned positions Armenia has better rating than all other countries of Customs Union.
After becoming Customs Union member Armenia will be treated at the same level as Russia and Belarus. This change will be reflected in reports. This means that Armenian high ranking officials will have to refrain from referring to international reports to shell their policy, and they will be able to cite maybe Russian sources only. It does not really matter what reports write; Armenian government is more focused on showing progress rather than registering real improvement. Accordingly, changes in reports, either positive or negative, will leave Armenia’s performance unchanged.
By Babken Tunyan
