Nationalization of private parking business could put off potential investors in Armenia

13:03 • 11.11.16



On October 19 Armenia’s government released a new program which envisages steady economic growth through promotion and protection of investments.

In an interview with Tert.am, economist Vilen Khachatryan spoke of the government program, major investors’ activities, the government’s cooperation with the private sector and other issues.

Mr Khachatryan, the new government program clearly envisages ensuring of steady economic growth and general economic progress, investors’ promotion and protection. On the other hand, we see public discontent and an instruction on establishment of government and community control over the financial flows of the Security Dream Ltd, Parking City Service CJSC and Locator CJSC. Do not you see any discrepancies between the government program and the planned changes in the aforementioned companies’ activities?

We have a number of opinions. First, we could consider the matter in terms of interests. If we consider the matter in terms of state budget revenues, the government can see a particular organization’s high incomes, which, with an unprecedented budget deficit and growing national debt, could relieve the burden on the budget. So the government takes this step.

If we consider the matter in terms of private and foreign companies, we can see discrepancies between the government program and the measures being taken toward the three companies in question because it is a nationalization process. That is, investments were made in a business, and a moment comes when the government thinks of directing the business’s incomes to the budget.

As regards consumers, nothings will change for them unless the fine rates are reduced or the quality of service improves and so on. Consumers do not much care about a change of the owner except for direction of funds to the budget to citizens’ benefit.

What consequences potential investors in Armenia could face with this format of the government-private sector cooperation?

Potential foreign investors would be most cautious about investing in Armenia and would not run the risk. One of the reasons is a decreasing share of investment in Armenia’s GDP, expected to go down to 19.1% in 2017.that is, we hear statements on increasing investments, while their share in the GDP is decreasing. An entirely different policy is being implemented toward foreign investors for the simple reason that they will either refrain from investing in a country implementing such a policy.

In this context, with respect to the government’s cooperation with the private sector, what does international practice show, if some incomes go to the budget, what is the procedure that would not cause damage to the private sector or put off foreign investors?

One of the formats is this: if we have effective management, and a private sector which is problematic, the state regulates all this, bringing it up a certain point, and then again returns it to the private sector based on the model of joint-stock companies. In that case, many would really be eager to purchase shares owned by a joint-stock company.

Also, it is possible to apply tax mechanisms to such companies as Security Dream, Parking City Service and Locator in order to charge the extra profit if any in an attempt to lower the prices through the anti-trust commission. Thus, the mechanisms applied would help avoid harming foreign investors, and also offer protection to private [entities].

What is the investment statistics for 2016?

The investment flows alone were down by 17 billion Drams in January-July 2016, which means we had more outgoing rather than incoming investments. As of 2016, we were investment makers rather than attracters in global terms.

Considering the situation and the changes with respect to the three companies’ activities, will the Government be able to secure development and protection of investments in Armenia?

Securing protection is perhaps possible, but there are certain risks when it comes to attracting investments. A major risk at present is the serious management-related changes, and there are also threats from the military point of view. We encountered political risks in July, so all this produces a negative impact on the investment flows. Will the government manage to neutralize all the risks and attract investors’ attention against the background of all those factors’ negative impact? This is where it is a little bit complicated to have positive expectations. 

Betghehem Arabyan





Загрузка...

LATEST NEWSAll Today news

17:56 • 18/09

Armenian khachkar unveiled in Polish city

17:05 • 18/09

Armenian parliament official briefs PACE committee on Azerbaijani aggression against Armenian civilian settlements

16:55 • 18/09

Ucom doubles inclusions of uDaily prepay mobile internet service

16:35 • 18/09

Former Liverpool defender forced to retire with motor neurone disease just months after marrying England women's captain 

16:22 • 18/09

Armenia, China sign deal to facilitate air communication

15:40 • 18/09

Trump orders release of classified documents in Russia probe

15:24 • 18/09

Armenian government delegation conducts visit to Nagorno-Karabakh

14:51 • 18/09

Central Bank chief re-elected president of interstate bank council

14:40 • 18/09

Armenian defense minister meets with FAST foundation president

14:08 • 18/09

NASA's new spacecraft captures photo of more than a dozen celestial objects known to host exoplanets in stunning 'first light' image

13:45 • 18/09

Pakistan's austerity car auction falls short, new PM commutes by helicopter

13:25 • 18/09

Armenian family’s 400-year-old musical secret still rings true

13:17 • 18/09

Russia blames Israel for downing of plane, vows retaliation

12:45 • 18/09

Chief architect of Yerevan sacked

12:25 • 18/09

Republic Square selected as 'hot spot' of independence day events to symbolize success in ‘Velvet Revolution’

11:26 • 18/09

Libarman’s visit to Baku signals strengthening Azerbaijani-Israeli relations

11:09 • 18/09

Zhoghovurd: OSCE to turn closer spotlight on situation along Karabakh frontline

10:35 • 18/09

Russian military plane disappears during Israeli strikes on Latakia with 14 people on board

10:13 • 18/09

Zhamanak: Putin planning meeting with former presidents in Yerevan

09:56 • 18/09

SpaceX unveils first Moon Loop tourist

09:51 • 18/09

Sean Penn Calls #MeToo Movement ‘Receptacle of the Salacious’

09:44 • 18/09

Florence leaves 'monumental disaster' for North Carolina

09:31 • 18/09

Magnitude 1.9 earthquake hits Armenia’s south

09:13 • 18/09

SpaceX signs first private moon customer

09:12 • 18/09

Russia and Turkey agree to create buffer zone in Syria's Idlib

19:40 • 17/09

Facts, figures, and Results: Zvartnots International Airport reports details on its activity and not օnly

17:53 • 17/09

French actor Gerard Depardieu 'wants' to acquire Turkish citizenship

17:35 • 17/09

New head of OSCE Mission to Skopje takes office

17:23 • 17/09

Ukraine's Poroshenko terminates Treaty of Friendship with Russia

16:38 • 17/09

Samsung’s Galaxy Note 9 reportedly catches fire in user’s purse  

16:05 • 17/09

Zohrab Mnatsakanyan: Nagorno-Karabakh is not just conflict for Armenia

15:17 • 17/09

Turkish Coast Guard rescues 16 migrants as boat capsizes

14:46 • 17/09

Yerevan hosts 11th Armrobotics Championship

12:46 • 17/09

Britain’s oldest person reveals secret of longevity  

12:33 • 17/09

Arthur Abraham takes part in 45th BMW Berlin Marathon

12:02 • 17/09

Penelope Cruz dazzles in elegant one-shoulder gown as she joins husband Javier Bardem for LA screening of Loving Pablo

11:34 • 17/09

Armenian, Artsakh foreign ministers meet in Stepanakert

11:10 • 17/09

Turkey to increase troops in Turkish Cyprus

10:43 • 17/09

Elon Musk says Tesla now in 'delivery logistics hell'

10:14 • 17/09

Azerbaijan's armed forces open fire on Armenia’s south from Nakhicehvan

09:51 • 17/09

As Trump and Mattis clash in public, officials question how long he'll last at the Pentagon

09:37 • 17/09

It's not novichok, say police: 'Russian' couple fall ill at Salisbury restaurant with nerve-agent symptoms

09:15 • 17/09

New doubts emerge about US-led sanctions on North Korea

14:49 • 15/09

No more favoritism or privileged classes in Armenia - Pashinyan's interview with Le Monde

14:02 • 15/09

Kocharyan’s statements reflect level of his political understanding – Nikol Pashinyan

13:12 • 15/09

International Figure Skating Classic 2018: Armenia’s Slavik Hayrapetyan ranks fifth (video)

12:48 • 15/09

Erdogan travels to Baku  

12:07 • 15/09

Russian Orthodox church cuts ties with Constantinople over Ukraine

11:23 • 15/09

Zhamanak: Gyumri mayor 'to quit' over 'failure to work effectively' with Pashinyan's cabinet

10:49 • 15/09

Turkey demands release of 16-year-old boy held in Armenia

09:50 • 15/09

Jean-Claude Van Damme arrives in Armenia  

09:42 • 15/09

Nebraska doctor to face execution for killing four people

09:32 • 15/09

Azerbaijan shells border village in Armenia’s Tavush region

17:43 • 14/09

Jean-Claude Van Damme to visit Armenia

17:37 • 14/09

Apple criticized for new iPhones 'too big for women to hold'

16:27 • 14/09

French, Armenian leaders start working meeting in Paris

16:10 • 14/09

Armenian Genocide museum elects new director

15:26 • 14/09

Animals snapped enjoying surprise snowfall in South Africa

15:00 • 14/09

Armenian biker named double winner in Astana championship  

14:21 • 14/09

‘Velvet Revolution’ marked also revolution of values in Armenia – Nikol Pashinyan

12:49 • 14/09

Azerbaijan braces for military drills 'in response' to Armenia

12:05 • 14/09

Ucom to start pre-registration of iPhone XS and XS Max purchase

12:03 • 14/09

Amazon's Jeff Bezos commits $2 billion to help homeless, pre-schools

11:54 • 14/09

Hurricane Florence: Life threatening storm lashes US

11:09 • 14/09

Armenia 'important role-player' in global politics, prime minister says in France

10:01 • 14/09

US congressman raises call for Armenian Genocide recognition

09:31 • 14/09

Saroyan world premiere adds dates in Fresno and OC, announces encore L A performance

09:19 • 14/09

Gas explosions hit homes in Massachusetts

18:08 • 13/09

Mbappe better than Ronaldo, says De Vrij

17:42 • 13/09

We understand Armenian government’s desire to help compatriots in Syria - US Embassy

17:23 • 13/09

Meghan Markle pregnant? Bookies expecting baby announcement soon

17:06 • 13/09

US government encourages open labs in Armenia – embassy statement

16:36 • 13/09

Edward Nalbandian: Prime minister misleadingly accused former government of failure over Karabakh

15:01 • 13/09

Pashinyan vows to 'lock up' masterminds behind March 1 events  

14:09 • 13/09

Six killed in California shooting

13:55 • 13/09

Apple ends iPhone X and iPhoe SE sale

13:09 • 13/09

Trump signs order to punish US meddlers

12:55 • 13/09

Turkey to use national currency in property transactions

12:37 • 13/09

Pashinyan will regret messing with me – Robert Kocharyan

12:13 • 13/09

Pashinyan holds phone conversation with Kyrgyzstan's leader

11:11 • 13/09

Drake, Cardi B lead American Music Awards

10:52 • 13/09

Zhamanak: CSTO secretary general to step down over March 2008 coup charges

09:58 • 13/09

Putin to conduct official visit to Armenia - Russian paper

09:30 • 13/09

Turkey 'boosts arms to Syrian rebels' as Idlib attack looms

09:13 • 13/09

Apple unveils iPhone XS and fall-detecting watch

18:15 • 12/09

United Airlines passengers stunned as pilot changes out of uniform and takes a nap in first class

17:51 • 12/09

New iPhone models confirmed in Apple’s products site map

17:45 • 12/09

Armenian parliament vice speaker hosts CSTO official

17:13 • 12/09

iPhone X, 8 and four iPads face ‘likely’ ban in South Korea

17:06 • 12/09

Mammadyarov: Azerbaijan ready for substantive talks over Karabakh  

16:43 • 12/09

Backstreet Boys' singer Nick Carter not to be charged in sex case  

16:29 • 12/09

UK and EU plan special summit to sign Brexit deal

15:57 • 12/09

Ardshinbank receives Asian Development Banks FP Momentum Award

15:48 • 12/09

Aliyev slams Armenian prime minister over Karabakh remark

15:28 • 12/09

La Francophonie opens 11th NGO forum in Yerevan

14:29 • 12/09

Tanzanian president calls for end to birth control

13:46 • 12/09

‘No specific dates agreed’ for Armenian-Azerbaijani summit

12:26 • 12/09

Armenian troops will not accomplish combat tasks in Syria, says defense minister

11:58 • 12/09

Israeli defense minister to visit Azerbaijan  

11:45 • 12/09

Zohrab Mnatsakanyan to attend human rights summit in Geneva – MFA spokesperson