Hovik Abrahamyan’s belated gift to Karen Karapetyan
Armenia has advanced by 5 ranks in “Doing Business 2017։ Equal Opportunity for All” report, issued by the World Bank. Currently we are ranked the 38th out of 190 countries regarding easiness of doing business, instead of the previous 43rd horizontal.
As mentioned in the report, advancement by 5 ranks has mainly been recorded on account of recalculation, conditioned by change of methodologies and adding by one economy—Somalia. Besides technical reasons, Armenia has also facilitated doing business in the two fields mentioned in the report—loan allocation and contract enforcement.
“In particular, Armenia strengthened access to credit, adopting new law on transaction security, which established a modern and unified collateral registry, and improved its credit information system by adopting a new law on personal data protection. Armenia also made enforcing contracts easier by introducing a consolidated chapter regulating voluntary mediation and by establishing financial incentives for the parties to attempt mediation,” the report reads.
What attaches attention here? Although these results have been issued now, it’s anticipated for 2017, however, improvement in the two fields have been implemented earlier, when Hovik Abrahamyan was the PM, i.e. Karen Karapetyan’s Government received improvement by 5 ranks from the previous Government.
One may consider it unimportant. Depends for whom. The role of Doing Business can’t be overestimated—potential investors don’t only take that report as a ground. On the basis of it lie arrangements (laws, decisions and etc.), however, everybody knows, adopting a law and decision is one thing, and provision of their enforcement—quite another.
In any case, all the Governments have always highlighted the role of Doing Business. One may say it can’t be so important for Karen Karapetyan’s Government.
Just the contrary. In the Government’s new action plan one may read, “…implementation of business environment and economic development steps, which upon the results of 2017 will provide improvement of the position of the Republic of Armenia at least by 4 points in Global Competitiveness Index and Doing Business rating…” (RA Government’s action plan 2016, point 1.2: Stabile economic developments, subpoint: investment encouraging and protection).
Thus, for the new Government Doing Business is not only important, but concrete measurable standards have been set. Yes, it’s stated: in the period of 2017, however, the report by Doing Business has been issued 2 days ago, prior to the Government’s action plan. Thus, Hovik Abrahamyan almost earlier has implemented that issue, by providing progress in the report.
We just have to wait to see this reform and change in the name of the Ministry of Economy by adding “investments” what result they’ll give and how they’ll boost activation of investment inflow.
In any case, it’s worth stating one bothering point. Engagement of investments is also a competition between the countries. And in this regard, if we stress Doing Business, than in that report our position and move should be observed in comparison with neighbors and partners.
In this sense the snapshot is rather disappointing. Georgia has advanced by 5 ranks and is already the 16th. EEU member country Belarus advanced by 13 ranks and appeared on the 37th place from the 50th (prior to our country). Kazakhstan has recorded brilliant results: from the 51st it raised to the 35th (advancement by 16 positions). Generally, as it’s stated in the report, Kazakhstan is the leader the second year in a row with the number of implemented reforms, i.e. we lose in competition with these two countries.
Of course, we may console ourselves, that our positions in Doing Business are better than that of Russia (40th place, regress by 4 horizontals), Kyrgyzstan (75th place, regress by 2 horizontals) or Azerbaijan (65th place, regress by 4 horizontals). However, Russia can’t be observed as our contestant from the perspective of investment engagement, as Russia is a source for investments to us (i.e. we compete with other countries regarding engagement of investments from Russia). Kyrgyzstan and Azerbaijan, to our assessment, can’t be a benchmark for Armenia if we really strive for a new-quality reform.
This means that in its action plan the Government has defined a rather modest benchmark, regarding improvement by 4 ranks in Doing Business. We need a higher temp.
It should also be stated that New Zealand leads Doing Business 2017, which is followed by Singapore and Denmark.
By Babken Tunyan
