EBRD ADVISES ARMENIA TO CONDUCT MORE EFFICIENT COMPETITION POLICY

Noyan Tapan
Nov 12 2007

LONDON, NOVEMBER 12, NOYAN TAPAN. In its report on transitional
countries, the European Bank for Reconstruction and Development (EBRD)
advises Armenia to improve the business environment and conduct a more
effiecient competition policy with the aim of making the country’s
industry more diverse, Radio Liberty reported.

"Foreign and local companies continue meeting obstacles in entering the
main branches of the Armenian economy, which impedes fair competition,"
the report says. "Lack of competition has been registered, especially
in the market of goods in great demand, mainly for the reason that
some monopolies control the import of consumer goods".

The report reminds that in the past, Armenia was ranked among the
CIS countries where it is advisable to do business. However, the
last report of Transparency International organization on the fight
against corruption says that the index of corruption perception has
grown in Armenia in the past three years, EBRD says.

As for the indices of the economic growth registered in 2006 and
in the first six months of this year, the report states that the
large-scale construction (mainly done with funds transferred from
abroad) in the country is the driving force of this growth. Instead,
a bit of stagnation has been observed in the industry and agriculture.

"As a whole, the market of goods in great demand continues to be
limited – due to the absence of relations with Turkey and Azerbaijan,"
the EBRD report says, adding that this is one of the main obstacles
to the development of entreprenuership, and not only for the reason
that Armenian goods are deprived of the opportunity to enter a large
market and the transport costs are increasing but also because the
dependence on donors and international financial bodies providing
money on concessional terms is growing.

According to the EBRD report, unlike in other transitional countries,
in Armenia salaries remain low and at the same time, the low index
of tax collection continues to be a cause for concern.