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

17:58 • 14/11

Hollywood Red Carpet cancelled after wildfires

17:47 • 14/11

Apple designers unveil dazzling one-of-a-kind ring 'cut entirely out of one single diamond'

17:24 • 14/11

Israel's defense chief resigns, slamming Netanyahu for 'surrendering to Hamas terror'

17:01 • 14/11

Armenia’s social and labor minister steps down ‘to join parliamentary campaign’

16:21 • 14/11

Parliamentary election 2018: Pro-Pashinyan bloc unveils candidates' list

15:55 • 14/11

Russian-Armenian military alliance ‘powerful restraint’ against Turkish-Azerbaijani aggression

15:31 • 14/11

Georgia to facilitate imports to Armenia

14:49 • 14/11

Prince Charles' 70th birthday marked with family photo release

14:25 • 14/11

US to meet 7,000-strong caravan with barbed wires at Tijuana border

13:51 • 14/11

Major tax evasion scheme revealed in Gazprom Armenia

13:12 • 14/11

CNN sues Trump administration, demands return of reporter’s press credentials

12:02 • 14/11

El Chapo: Trial of Mexican cartel boss opens in New York

11:35 • 14/11

Armenians suspected of UK cryptocurrency scam

11:10 • 14/11

Anna Astvatsaturian Turcotte: Mutual expectations between Armenia and diaspora 'distance us further from each other'

10:44 • 14/11

Crude oil extends steep dive, stocks fall on growth fears

10:28 • 14/11

Israel and Hamas agree on Gaza ceasefire after intense violence

10:23 • 14/11

Zhoghovurd: Armenia’s international reserves drop sharply to record low

09:48 • 14/11

Facebook bug let websites read ‘likes’ and interests from a user’s profile

09:42 • 14/11

Exceptionally large 'Pink Legacy' diamond fetches record-breaking $50m at Christie's

09:30 • 14/11

Melania Trump calls for White House aide’s firing

17:55 • 13/11

Stars pay tribute to Marvel Comics pioneer, Stan Lee, dead at 95

17:38 • 13/11

Kim Kardashian and Kanye West paid for private firefighters to save their mansion and neighbors' homes from California wildfires  

17:21 • 13/11

Kocharyan sues businesswoman ‘for libel’  

16:55 • 13/11

'Appalling' Khashoggi audio shocked Saudi intelligence, says Turkey's Erdoğan

16:47 • 13/11

Toy Story 4 trailer: first teaser for new film released

15:24 • 13/11

OSCE/ODIHR ‘has no prejudiced approach’ to December  9 election in Armenia

14:38 • 13/11

French army troll Trump with picture of them training in rain

13:48 • 13/11

CSTO postponed secretary general’s election ‘due to lack of consensus’

13:05 • 13/11

Samsung’s Galaxy F foldable phone gets a price and release date in new report

12:08 • 13/11

OSCE/ODIHR to conduct 'large-scale' election observation in Armenia

11:07 • 13/11

People’s Party of Armenia ‘not to run for parliament’

10:49 • 13/11

US not concerned by Europe's idea for Iran trade as companies moving out

10:35 • 13/11

168 Zham: Upcoming parliamentary election ‘key foreign policy test’ for Armenia  

10:03 • 13/11

Canadian intelligence ‘has heard’ Khashoggi murder tape  

09:46 • 13/11

California wildfire: At least 42 reported killed in deadliest blaze

09:38 • 13/11

NATO comments on idea of ​​creating a pan-European army

09:12 • 13/11

Israel bombs Hamas TV station in Gaza

18:56 • 12/11

VivaCell-MTS releases CSR report in line with GRI international standards

15:03 • 10/11

Kocharyan's lawyers apply to ECHR, alleging procedural breaches of domestic law

14:08 • 10/11

Parliamentary Election 2018: Republic party and Free Democrats agree to join campaign 'as a single team'

13:26 • 10/11

Turkey urges UN to reform Security Council

13:14 • 10/11

Impact of anti-Iran cushioned by high oil prices, EU-US rift

12:09 • 10/11

SCORPION IS-15: First Armenian-manufactured military robot tested (video)

11:42 • 10/11

Trump limits asylum from Mexico border

11:21 • 10/11

Thrifty Kate strikes again! Duchess of Cambridge recycles six-year-old Jenny Packham dress as she joins Prince William at the Tusk Conservation Awards

11:08 • 10/11

Thousands of swarming spiders carpet Arkansas highway with thick webs in a 'mating party'

10:14 • 10/11

California reels as the most destructive wildfire in the state's history kills at least 9 in the north razing 6,500 homes

18:01 • 09/11

Stephen Hawking’s wheelchair fetches $393,000 at Christie’s

17:46 • 09/11

Manchester United need to grow up - Maurinho

17:37 • 09/11

Khashoggi's fiancée shocked over new death details

17:13 • 09/11

Pope Francis hosts Armenia’s outgoing ambassador at Vatican City

16:16 • 09/11

No strategic heights have come under Azerbaijani control in Nakicevan, says Defense Ministry official

15:36 • 09/11

Disney plans new 'Star Wars' prequel series for streaming service

15:23 • 09/11

World's first AI news anchor unveiled in China

14:52 • 09/11

Armenian president denies making ‘political calls' on Turkey’s Erdogan

14:10 • 09/11

Northern California wildfire leaves town in ruins

12:45 • 09/11

Pashinyan hails positive migration trends after 'Velvet Revolution' in Armenia

11:17 • 09/11

UN sounds alarm over '3 million and more' Venezuelan refugees and migrants

11:05 • 09/11

Kim Kardashian and Kanye West 'planning to adopt baby boy from Armenia'

10:56 • 09/11

US imposes new sanctions on Russia

10:46 • 09/11

Elsa Hosk puts on show-stopping display as she rocks glittering $1m Fantasy Bra during Victoria's Secret Fashion Show  

10:28 • 09/11

Pashinyan 'badly needs' strong opposition in parliament to resist intn'l pressures over Artsakh

09:43 • 09/11

US rules out military solution to Karabakh conflict

09:31 • 09/11

CSTO to elect new secretary general in December

18:12 • 08/11

Zohrab Mnatsakanyan attends CSTO ministerial meeting in Kazakhstan  

17:02 • 08/11

Tesla names chairwoman replacing Elon Musk

16:54 • 08/11

Serena Williams stuns in cleavage-baring dress and diamond earrings as she joins husband Alexis Ohanian at Brand Genius Awards

16:48 • 08/11

Selena Gomez 'leaves psychiatric facility' after 'dialectical behavior therapy'

16:38 • 08/11

Earth’s ozone layer is healing, according to UN report

16:18 • 08/11

Collective Security Treaty Organization opens summit in Astana  

15:59 • 08/11

Prince Harry marks 100 years since the end of WW1 by visiting Field of Remembrance at Westminster Abbey

15:06 • 08/11

‘World’s fastest woman’ dies in US at 72

14:54 • 08/11

Dollar extends recovery on post-election relief

14:45 • 08/11

North Carolina child faces felony charges for allegedly putting needles in Halloween candy

14:33 • 08/11

Nikol Pashinyan in Astana to attend CSTO summit

14:23 • 08/11

Prince Charles gives extraordinary TV interview on eve of his 70th birthday as family open up about what he is really like

14:00 • 08/11

Ex-CSTO secretary general in Armenia amid criminal probe  

13:28 • 08/11

Gunman shoots at least six victims at country music bar by 'throwing smoke grenades’ onto dancefloor and opening fire with large handgun  

13:22 • 08/11

US warns nations to ban entry of Iranian oil tankers into their territorial waters

13:06 • 08/11

Canadian PM apologizes for his country's 1939 decision to turn away ship to rescue Jews from Holocaust

11:42 • 08/11

Armenian Defense Ministry official ‘surprised’ at Aliyev's statement

11:11 • 08/11

Republican Party preparing for snap election, says spokesperson  

10:36 • 08/11

Trump fires attorney general

10:18 • 08/11

White House suspends credentials for CNN journalist

09:39 • 08/11

Pakistan frees jailed Christian woman

09:14 • 08/11

Samsung unveils folding smartphone

19:11 • 07/11

Acting defense minister to attend high-level summit in Kazakhstan

18:42 • 07/11

Another journalist reported killed in Saudi Arabia

18:17 • 07/11

Vietnam to host Formula I in Honoi from 2020

18:03 • 07/11

Michael Douglas get star on Hollywood Walk of Fame

17:50 • 07/11

Democrat heir to Hyatt hotel chain worth $3.5 billion will become richest governor in history after defeating multi-millionaire incumbent in Illinois

17:38 • 07/11

Facebook ties newly suspended accounts to the Kremlin

17:20 • 07/11

Giro Manoyan: Turkey encourages Azerbaijan’s whimsical stance on Karabakh

16:01 • 07/11

Smell of durian delays flight in Indonesia after passengers protest

15:21 • 07/11

Armenia may face increasing pressure to cut ties with Iran – politician

15:02 • 07/11

Ucom’s uCloud Solutions prices drop by 20%

14:11 • 07/11

Zebra crossing that led to little zonkey: Ultra-rare crossbreed foal is born on a farm in Somerset

14:02 • 07/11

Elon Musk's Tesla Roadster which he fired into space aboard the world's most powerful rocket has now flown beyond Mars, SpaceX confirms

13:47 • 07/11

Democrat Jared Polis makes history as America's first elected openly gay governor after winning Colorado race  

12:50 • 07/11

29-year-old Alexandria Ocasio-Cortez poised to become the youngest woman in Congress