Armenia's Economic Pulse

[Haykakan]

Re: Armenia's Economic Pulse

"fill their pockets and support their business friends and cronies"
That will hapen regardless of the form of government you get. It happens like that everywhere now.

[londontsi]

Re: Armenia's Economic Pulse

Corruption in Armenia: Esti Hametsek…

http://asbarez.com/98962/corruption-in-armenia-esti-hametsek%e2%80%a6/



BY OSHIN PEROOMIAN

In what I can only characterize as the twisted modern-day version of “Gikor”, our honorable President, Serg Sarkissian, has repeatedly asked the diaspora to come and invest in the homeland and have an input in making Armenia a prosperous nation. For all those brave souls that are actually considering heeding the president’s call and do not have “friends” in the highest of places in the government of Armenia, I simply offer a story which should give some pause.

In the fall of 2005, I bought a 2,500 square meter land on the hills overlooking Yerevan (in Nork). I purchased this land from Mr. Andranik Ghulijanyan for a total sum of 88,000,000 AMD (about $195,000 at that time). The original lot size owned by Mr. Ghulijanyan was 5000 square meters. Since, I did not want to purchase the entire lot, I requested that Mr. Ghulijanyan split the parcel in two halves so that I could purchase only half the land (the amount I could afford). Mr. Ghulijanyan filled out the proper paperwork at the Republic of Armenia’s (RA) Kadatsr in Yerevan, which is the government body responsible for issuing deeds in the RA, and requested that the deed be separated into two. After doing their due diligence, the Kadastr split the original deed and issued two deeds each for 2500 square meters. As a side note, the RA Kadatsr would not have completed this process if there were any leans or judgments against this parcel of land.

After the Kadastr issued the two deeds, with the help of my lawyer in Armenia, we completed the transaction via notary public and recorded the transaction with Kadastr. The RA Kadastr issued a new deed listing me as the titleholder for the 2500 square meter parcel. To this day, no state official has called into question the legitimacy of my transaction and the deed that I hold. This is an important fact to keep in mind as you read the rest of this story.

In fall of 2006, a few months after my family and I moved to Armenia, I got a call from the Nork-Marash courthouse inquiring as to why I had failed to appear in court. I had no idea what the phone call was about so my lawyer and I headed to the courthouse to ascertain the reason for the verbal summons (verbal summons are illegal in Armenia). To our surprise, we found that the city of Yerevan had taken Andranik Ghulijanyan to court for not properly paying for the 5000 square meter land, which he had originally bought from the City of Yerevan. Since Mr. Ghulijanyan no longer owned the entire piece of the land, I was subsequently included as a defendant in the civil trial. In fact, not only was my summons to court done verbally, the civil charges against me were also entered verbally (both strictly against the rule of law in Armenia). The judge simply saw fit to add the changes against me midway through the trial based on a verbal request from the attorney representing the city.

The laws (in Armenia) are very clear in this matter. I did not purchase my land from the city of Yerevan; and, when I purchased the land, Mr. Ghulijanyan was the rightful owner of that land. My transaction with him followed the letter of the law and thus the only recourse for the city of Yerevan was to sue Mr. Ghulijanyan for the money they were owed for half the land (my half) and request his portion of the land to be returned. As a bona fide purchaser, there are several statutes (in Armenian law) that protect my purchase. The city officials had written in their brief that since they wanted the original purchase agreement of the land with Ghulijanyan nullified, it should follow that I my purchase agreement be nullified as well. Clearly not the case under Armenian law!

During our civil trial, it became clear that a group of people (kadastr employees, bank employees and other officials and civilians) had been arrested for falsifying documents and receipts and pocketing the money that was to be paid into the state treasury for the original purchase of the land (when Ghulijanyan purchased it from the city). It turned out that over a hundred transactions of this type where conducted with a massive loss to the state treasury. The state had started criminal proceedings against the aforementioned group and had seized all their assets. I will not get into how those assets were auctioned off and how much money was actually put into the treasury since no one can actually give the correct number. The items auctioned off were at pennies on the dollar and probably made the corrupt officials handling this case even richer than they should be!! The president of Armenia, at that time the honorable Robert Kocharyan, had come up with a “kam hoghe kam poghe” policy and ordered every one of these landowners (whether complicit or not in the criminal activities) be taken to civil court. It was clear from the judges manning these trials that a fair trial was not going to be possible. In nearly all the cases, the civil defendants were forced to pay what was owed to the state a second time, even “defendants” that were bona-fide purchasers who did not purchase their parcels from the city. Again, I don’t think anyone knows exactly by how-many fold these payments exceeded the original “loss” to the state budget. I was one of the lone holdouts. The lawyers from kadastr and the city said that this would simply go away if I paid what was owed to the city. It really didn’t concern them that I had rightfully purchased the land (and not from the city) and that I had paid much more than the 33,000,000 AMD that the city was asking for (the total sum was 66,000,000 for the 5000 square meter land).

In my original trial, the judge was very prejudicial and did not even want to consider the fact that there were people being held on criminal charges in this matter. Armenia law clearly states that criminal proceedings in a given case supersede the civil proceedings because any evidence and convictions stemming from the criminal trial will have a direct consequence and relevance in the civil trial. The judge did not see it that way and did not want to postpone the trial until the end of the criminal proceedings. We questioned the judge’s impartiality and made a formal request for his removal. The court magistrate, by law, had to take the matter under advisement and notify us in writing whether our request would be granted. About 15 days after our request, my lawyer called and said that he had “heard” that the judge was going to announce a verdict in my case the following day. I was completely shocked. Well, I shouldn’t say that since someone who has lived in Armenia as long as I have, rarely gets shocked at anything anymore. We showed up the next day at the courthouse and the judge was clearly surprised to see us in the courtroom. In fact, none of the other parties were in court. He read the verdict and literally ran out of the courtroom afterwards. We asked the court clerk about the response to our request for the removal of the judge and she handed us the refusal letter after the verdict was announced.

Under Armenia law, one has 15 days to appeal court rulings and we went ahead and appealed the verdict. The case got assigned to the Appeal’s Court (civil division). As an American citizen, I also notified the American Embassy about the “troubles” I was having with the judicial system in Armenia. The Embassy was extremely helpful in many ways. They offered to be at the appeal’s court proceedings and to write letters on my behalf to the Foreign Ministry of Armenia. At the first court session in the appeals division, we asked the three-judge panel to postpone the trial until the end of the criminal proceedings in this matter. The judges said that they would issue their ruling on that motion at the next session. I was very sure that the judges were going to rule against us so I asked the embassy if they could have an official present at the second session. Mr. Jeff Gringer, the deputy consul for the US embassy in Yerevan, agreed to come to the trial. As the session began and we introduced the people in the courtroom (including the deputy consul), pandemonium broke out in the courtroom. What could only be described as a scene from a badly adapted John Grisham novel, the judges called a 15 minute recess and the Kadastr and City lawyers started frantically talking on their cell phones. The court was called into session 20 minutes later and the judges agreed to postpone the trial and grant our motion. I wonder what would have happened if the ambassador had shown up at the trial (although we did not have an ambassador to Armenia at that time).

Fast-forward a few years to the fall of 2010. The criminals were tried and convicted. The state, in their criminal case, had clearly shown that the convicted were the ones who had defrauded the state. So, with the criminal verdicts at hand, our trial began once again. Even if the other laws that I mentioned in the beginning of the article were not enough, now the judges had criminal verdicts in their procession clearly showing who was to blame for the fraud perpetrated on the city. As the case proceeded, it became clear that once again this panel was not going to be impartial. After hearing all sides, they announced that they were going to issue their ruling at a specified date. We went to the courthouse on that date in order to be present while they read the verdict. In a twisted version of “the dog ate my homework” excuse, the judges told us that they had issued the ruling but the computers were not cooperating and they couldn’t read the whole statement of the verdict. My attorney asked if they could read the main ruling (whether they upheld the lower court’s decision or not) and that we would pick up the full text of the ruling at a later date. The lead judge on the panel said that the pages were out of order in the document and the whole computer system was on the “frits”. The computers seemed to be working properly for all the other rulings that they read before they got to ours. I have too much respect for kangaroos to use their name to describe this court. The lead judge said that we should come back in a week and they would read the verdict at that time. A week passed and we were notified in court that the panel had decided to restart the proceedings, the same panel that claimed that they had reached a verdict but couldn’t read it because of issues with their computer system.

In this next “phase” of the proceedings, the judges tried to see if someone would come forward and pay the amount owed to the city so that the matter could be “resolved” via settlement. After exhausting these options, the judges began with a sharp line of questioning for the lawyer representing the city of Yerevan. One judge actually asked, “Did the city sell land to Oshin? No! So why is the city asking for a land which it did not sell to Oshin”. We were surprised that the judges were taking our side and it was refreshing to see them follow the rule of law. We have the official audio-tapes from the trial where the judges harshly criticize the city attorney and tell her that their case is without merit. They essentially say that the correct course of action for the city was to sue Mr. Ghulijanyan asking for monetary compensation for the part of the land that he no longer owned and that I should not have been even included in this trial. The lawyer from the city is heard at the end of the tape saying, “The money owed to the state MUST be paid and we really don’t care who pays as long as it is paid” clearly showing the states intentions in the case (Kam hoghe kam poghe!). All indications were that the panel was planning to overturn the lower court’s verdict,….until the verdict! Clearly there had been pressure from the highest reaches of the government as is the case with nearly all matters involving the people vs. the state or the city. In fact the judges didn’t even read the verdict in court. The secretary gave us the ruling outside of court and said “Sorry, we did everything we could”. The ruling basically upheld the verdict from the first court.

We appealed this ruling to the highest court in the land dealing with such cases, the “Vechrabeg” court.

Today, October 3, 2011, I got a formal letter from the “Vechrabeg” court that it had refused to even hear my case, exhausting all options open to me within the boundaries of the RA. In their letter of refusal, there is absolutely no reason given for their decision.

In all the verdicts handed down so far in this case, none of the judges indicate what law I have broken during the purchase of the land and under which statute I must forfeit the land (because there are none!). Even the judges on the audio recording ask the city attorney “Under which statute are you asking for the forfeiture of Oshin’s land”.

I love my country. In fact, very few have made the decision that my family and I have made, leaving the “good-life” in LA for a better-life in Yerevan. My third child was born in Yerevan, and I am proud that I live in my homeland and contribute to its hopefully prosperous future (in my own way). However, the so-called sovereign judicial system here has left me no choice but to seek justice outside the boundaries of the RA. My next stop in this journey will be the European court.

We often here that the system is simply broken in Armenia and corruption runs rampant. Everything can be bought since everything is up for sale. Well, everyone who has worked and lived here has stories just like the one above, which go a long way to prove that premise.

Oh, what would Gikor think…

[londontsi]

Re: Armenia's Economic Pulse

When a Government Official Becomes a "Natural Disaster"

http://hetq.am/eng/opinion/6147/when-a-government-official-becomes-a-natural-disaster.html

Is it possible to find just one government official that can explain why the Hrazdan Sports Complex must be the property of MP Ashot Aghababyan, a member of the ruling Republican Party?

Can any of our government officials explain why this individual must be lord and master of the structures and buildings planned for this 14 hectare parcel of land?

If this is a matter of national security, let one of them provide an explanation, so that the rest of us understand.

If it is a measure taken to strengthen the foundation of the state, let them say as much.

Perhaps Prime Minister Tigran Sargsyan can explain what pivotal significance it will serve the shaping of the Armenian nation to have one of his party colleagues build a huge commercial center on the site.

The authorities have familiarized themselves with all possible ways to squeeze the state and now they are writing an encyclopaedia on the subject.

The bowels of the country will soon be opened for exploitation; all the exploratory licenses have been doled out.

It’s as if the end of the world has been declared and our officials have decided to make the country’s riches their own. But the country’s natural wealth doesn’t belong to this generation alone. Doesn’t anyone in the corridors of power bring this inconvenient truth to the table?

Aram Haroutyunyan, the Minister of Nature Protection, couldn’t care less about the fate of the Trchkan Waterfall. His business interests continue to flourish. The construction and planning interests he owns are winning the tender bids launched by the very ministry he runs.

This minister, who has become a natural disaster for Armenia’s environment, rubber stamps any document placed on his desk. That’s how the green light for the construction of a hydro-electric plant at Trchkan was given. If he doesn’t sign off on the permit papers some other state agency will.

The forests of Armenia are being massacred under the government’s nose. Furthermore, it is the state agency HayAntar (Armenian Forest) that is wielding the axe.

If there are still non-believers in the government, we can escort them to the forests of Tavoush and Lori at any time so that they can see for themselves the results of the organized rape of the land.

Political duplicity, the doling out of plum government posts, searching out new avenues to embezzle state funds – this is what really interests our “elected officials”.

The rest of us are just cogs in a bigger wheel.

True to form, we and the nation as a whole are dutifully going along for the ride.

[Serjik]

Re: Armenia's Economic Pulse

Mr. London man. You remind me of a smut peddler you should stop hanging up dirty laundry. Bro I am not impressed with your posts.

[londontsi]

Re: Armenia's Economic Pulse

You remind me of a smut peddler

I suggest you think for a minute and decide who created the “smut” which I am peddling.
Perhaps the victims who through their complaints are giving a bad name for Armenia.

you should stop hanging up dirty laundry.

Perversely we agree that there is “dirty laundry.”
At least there is something we agree on.

Where we differ is how do we deal with it.

As somebody who is passionate about the underdog citizen who without any recourse to justice,
the only option left to him is to shout and make noise (hanging dirty laundry to you).

Bro I am not impressed with your posts.

It all depends on your values.

I have a solution for you.
I suggest you buy two large bags of sand and make a mound.
Then make a hole in it as big as your head.
Then put your head in it.

Then you will be the happiest man on plant earth.

[Mher]

Re: Armenia's Economic Pulse

Armenia Sets Sights on Becoming a Post-Soviet Silicon Valley
December 13, 2011 - 11:39am, by Marianna Grigoryan

When Apple co-founder Steve Wozniak went whooshing through the streets of downtown Yerevan on a Segway last month, he got nary a wide-eyed stare. And with Armenia now boasting an official 25-percent growth rate in its Information Technologies (IT) sector, that’s how it should be, proud bureaucrats might say. But for all the optimism, industry executives caution that many a speed bump lies on Armenia’s journey to IT fame and fortune.

In 2010, Armenia’s IT sector, focused primarily on software exports, shipped out $120-million-worth of information-technology software and services, largely to the United States, Canada, and the European Union, with a sliver to Russia and other former Soviet republics. The sector, which contains some 300 companies, added $200 million to the country’s $9.39-billion economy that year, according to government data.

Those figures might appear miniscule compared with the muscle of India, South Korea or Taiwan, but they are significant enough to gain attention from international funders. Armenia and India in November set up a joint Center for Excellence in information Communication Technologies at Yerevan State University; the Armenian capital also contains a Microsoft Innovation Center and a “creative technologies” center for young people, financed by the US-based Simonian Educational Foundation.

Addressing fellow members of the ruling Republican Party of Armenia on December 4, President Serzh Sargsyan took the attention in stride. “While other countries are working on the extraction of their natural resources, we have to extract our talents and rely on our brains,” he commented in an apparent jibe at Armenian rival and foe, hydrocarbon-rich Azerbaijan.

But don’t look for Yerevan to turn into the next Hyderabad just yet. Although the government made IT an economic priority over a decade ago, not long after American IT companies run by diaspora Armenians opened shop in newly independent Armenia, company executives complain that excessive taxes and export duties, and an inadequately trained labor pool, remain handicaps.

“We’re overloaded with bureaucratic issues and reports [related to income taxes], and taxes are high; meanwhile, we need privileges and support as a newly created and developing industry,” elaborated the director of one newly-opened programming company. IT companies face corporate tax rates of up to 30 percent.

The government’s enthusiasm for its budding IT sector only goes so far, agreed another company director. “We demanded that tax and customs privileges be given to us, but we never got them, “ complained Hovik Musayelian, the director of Synopsys Armenia, a 1,000-employee-strong company specializing in electronic design automation [and semiconductor-related software. Such issues are particularly important for IT start-ups, he added.

“If the IT sector is considered to be a priority branch, then at least tax privileges must be provided, and other benefits should be offered to investors,” asserted information security expert Samvel Martirosian.

The Ministry of Economy did not answer EurasiaNet’s query regarding the reason for the refusal to give tax and export tariff benefits to IT companies.
Unlike many of their Silicon Valley counterparts, Armenian entrepreneurs, however, often look for a more interventionist role by the government. “One government-run venture capital fund can change the situation completely,” advised Edgar Khachatrian, the president of iCity LLC, a company dealing in business analysis and audit software programs.

So far, there appears to be no indication that the government is considering such an option. While Sargsyan has called for IT companies to hold “leading positions in the world market,” the degree of detail with which the government has analyzed Armenia’s IT business is unclear.

Asked to identify the source of Armenia’s global IT advantage, the Ministry of Economy named annual IT award ceremonies (the reason for Wozniak’s visit), the two-day Armenian Technology Congress in Silicon Valley, “affordable” rates for Internet access, and, for some reason, Armenia’s e-government portal. No mention was made of tax rates, export tariffs, access to start-up capital, product cost comparisons or local know-how.

Nonetheless, the government understands that IT means jobs. With an average monthly salary of 456,000 – 570,000 drams (about $1,200 to $1,500), according to industry sources, Armenia’s IT specialists can earn roughly four to five times more than the official national average. In a country with an unofficial employment rate well into the double digits and a poverty rate estimated at over one-quarter of its population of roughly 3 million people, that grabs attention.

The Information Technologies Council attached to Prime Minister Tigran Sarkisian’s office has advised the government to ensure that state-run Armenian universities supply at least 1,000 graduates per year qualified to work in the IT industry, the prime minister told the Republican Party of Armenia seminar on December 4. Currently, the sector employs a mere 5,500 individuals, according to government data.

With any increase in the number of qualified university graduates, IT industry executives also look for “serious” investments in higher education to provide students with practical training in IT development, up-to-date equipment in computer labs and lecturers with the experience to encourage entrepreneurialism.

For a tiny, relatively poor country trying to make its mark overnight in a ruthlessly cutthroat, ever-changing global market, that might seem like a drop in the bucket. But hope among Armenian IT executives continues on.
“We are very ambitious,” explained Synopsys Armenia’s Musayelian. “We want to make a leap in development.”

http://www.eurasianet.org/node/64684

[KarotheGreat]

Re: Armenia's Economic Pulse

This seems to be really great news more companies should be doing this! This is the way we can get things done in Georgia by taking over parts of their economy and country. Hope more Armenian companies will follow because it will only have great effects on Armenian businesses.

Ameriabank to announce new merger plans in spring

January 30, 2012 - 13:50 AMT

PanARMENIAN.Net - Ameriabank CJSC is actively working to implement merger plans and enter Georgia’s financial market, with certain progress expected in spring, according to the bank’s development director.

At news conference in Yerevan, Tigran Jrbashyan refrained from providing specific information on projects described.

As Jrbashyan reported earlier, the bank is negotiating a purchase of a Georgian bank, in view of Ameriabank clients’ interest in Georgia’s financial market. According to Georgian media reports, Ameriabank planned the purchase of HSBC-Georgia assets.

On April 10, 2011, Ameriabank and Cascade Bank announced completion of merger transaction.

Let us hope that this means more small businesses will open up in Armenia. Armenia needs to base its economy on small businesses to grow.

Ameriabank doubles SME crediting in 2011

January 30, 2012 - 13:37 AMT

PanARMENIAN.Net - In 2011, Ameriabank CJSC allocated AMD 18,9 bln in M&S businesses crediting, increasing 2010 figure 2,5 times to achieve 11,2% growth.

At a news conference in Yerevan, Ameriabank development director Tigran Jrbashyan noted significant progress in retail line, with physical persons’ credit investments increasing 56% to total AMD 22 bln by yearend.

As he further noted, the bank’s credit investments grew by 50% in 2011 to gross AMD 135,9 bln, providing 10,8% share.

Ameriabank leads Armenian economy crediting, having allocated AMD 112 bln in 2011 to increase the figure twice since 2010.

The bank’s client base lists 32000 physical persons, (with 40% growth against 2010) and 2830 legal persons.

[KarotheGreat]

Re: Armenia's Economic Pulse

Armenia, Georgia and Bulgaria offer best opportunities for doing business in Black Sea region

January 31, 2012 | 20:10

SOFIA. – Armenia, Georgia and Bulgaria offer the best opportunities for setting up a business in the Black Sea region, expert at Regional Agency for Entrepreneurship and Innovations Ivelina Nesterova said quoting International Greek Business Association research, Radio FOCUS – Varna reports.

The research was presented at Black Sea - a network of cooperation international conference, held in Thessaloniki, Greece.

The list included six categories according to Nesterova, relaxing the start of setting up a business, simplification of getting credits, protection of investors, simplification of taxes, relaxation of international trade and protection of contracts.

According to those categories Armenia and Georgia offer the best opportunities for setting up a business, Bulgaria is the third, while Ukraine and Russia are the last in the list to offer better opportunities.

It seems that economical reality is catching up with some Armenian oligarchs. They think that they can control any business they want without stretching too thin, guess again. Hope the bank wins the court case!

Armenian business family decides to purchase gold-diamond mine in Sierra Leone – newspaper

February 01, 2012 | 08:41

YEREVAN. – The conflict between Armenia’s Hayastan shopping center and Ameriabank is not yet resolved. The attorneys of the Hayrapetyan brothers, who own the shopping center, have appealed the recognition of the bank’s property rights to the shopping center, in return for delaying US$ 10-million loan obligations, Hraparak daily writes.

And the daily has found out why the Hayrapetyan had received that loan and how they could not pay the loan back despite their flourishing business. It became apparent that the Hayrapetyan, together with a partner, had decided to purchase a gold-diamond mine in Africa, and they had taken the loan for that purpose. The daily’s source notes that the mine is in Sierra Leone. The bank loan was to be used for the operation of that mine. And the problems arose, in August of last year, during the repayment of this very loan, Hraparak writes.

[KarotheGreat]

Re: Armenia's Economic Pulse

The Stock exchange is too important in our modern economy to just ignore it and try to weaken it. We need a strong stock exchange and we need strong and simple regulation. We have done great work in the first 20 years of our independence no it is time to continue our growth towards a free market and more prosperous Armenia.

Armenia’s Central Bank is hindering country’s stock exchange?

February 17, 2012 | 13:44

YEREVAN. – The NASDAQ OMX Armenia stock exchange is working with a loss, its General Manager Konstantin Saroyan said during a press conference on Friday.

According to Saroyan, the stock exchange was working with a loss even prior to the financial crisis. And the reason, in his view, is that the exchange has very little profits. And there are two causes for the low profits: First, the rates at the stock exchange are not high; and second, Armenia’s Central Bank (CB) offers other platforms for market trading, and without any fees; and that is why the banks very often prefer CB’s systems.

“Under other equal terms the banks will prefer the free service. In our view, no service must be free [of charge], since the stock exchange secures a safe and effective mechanism for signing business deals,” Konstantin Saroyan maintained.

[Haykakan]

Re: Armenia's Economic Pulse

A NEW JOINT ARMENIAN-IRANIAN VENTURE TO BE ESTABLISHED

ARMRADIO.AM
17.04.2012 17:55

A new joint Armenian-Iranian enterprise will be established. The
corresponding agreement was signed today between the President of
the Armenian Armelectromash Company Seyran Matevosyan and Executive
Director of Iran's Khorasan Agricultural Industry Company Hadi
Abdollahian.

Under the agreement, deep liquid-drainage pumps will be manufactured
at the Armelectromash Company, the Armenian Chamber of Commerce and
Industry informs.

The Chamber's President Martin Sargsyan assured that, aside from
creating numerous new jobs, Armenia will have a new domestic product,
which will enter the foreign market, at the same time satisfying the
local demand.