How to tame market’s potential and make it serve everybody’s prosperity
By Mher Ohanian

Yerkir/arm
27 May 05

Only fifteen years after the market reforms were launched in Armenia,
the Armenian officials began to cautiously speak about the European
Union granting “market economy country” status to Armenia; they even
express confidence that such status will be granted to Armenia by
the end of the year. What are these expectations based on and what
does the term “market economy country” actually mean?

The fact is that out of the 200 world countries, only 10 percent —
or 20-25 countries — is considered to have advanced market economies;
in others, despite the existence of infrastructures, markets are
unable to produce glut and dignified living conditions for the society.

International finance organizations and donor countries spend billions
of dollars every year to reform economies of those countries but do
not get desirable results. In fact, the gap between the wealthy and the
poor is actually growing: “the rich get richer, the poor get poorer.”

The experience of the developed countries prompts that the key
precondition for the market to develop is the efficiently defined
property rights. Only then, it can be expected that the property rights
can become permanently available, can be standardized, registered,
and the owners can be guaranteed that their assets will not be taken
away, nationalized or become subject of rip-off.

The developed markets also prosper because the property rights in
those countries are clearly defined making it possible to trade,
sell and resell them, resulting in an efficient redistribution of
resources, and investing in modern and competent technologies thus
increasing the production and the prosperity.