18000 small and medium-sized enterprises have been closed in 1.5 years (video)
18000 small and medium-sized enterprises have been closed in Armenia in the last 1.5 years. First of all the fall relates to commercial business and has several reasons. “There are high poverty rates in the republic, the average index is higher than 50%, the number of citizens has increased and if the population has decreased, there are few customers. The third reason is the situation in Russia,” says Gagik Makaryan, Chairman of the Republican Union of Employers of Armenia. Small and medium-sized enterprises are closed, as in Armenia the political power and business are combined, which results in monopolies and sponsorship in the economic sphere. Hakob Avagyan, Chairman of SME Cooperation Association, notes, “There are spheres, where business cannot simply penetrate, and there are spheres, where the business is trying to penetrate, suggests interesting ideas, but as there are soft loan payers in the particular sphere, it also hinders the competition.” According to Hakob Avagyan, the problem with Armenian economy is not bad laws, but not putting them into effect. “Even the privileges and reforms, which are given to small business, aren’t available to it.” Armenia’s shadow economy makes up about 1 billion USD, where the share of the SMEs is very minor. The state must think about reducing the shadow but not at the expense of small business. On November 10 the U.S. Ambassador to Armenia Richard Mills also spoke about difficult situation of Armenia’s economy, present monopolies and corruption. Their existence is simply a blow to Armenia’s economy. “When the competition is not fair in business and is not based on objective commercial standards, when there are strong interests, which result in inadequate economic and political consequences, it limits economic growth,” announced the Ambassador. The experts are sure that in order to stop the process of closing small and medium-sized businesses, the Government must initiate changes.
