Sometimes one can find articles in the press and also statements by politicians attacking the official economic growth figures as distorted, for whatever reason. What they fail to understand is that the GDP growth is not distributed equitably, nor can it be expected in a market economy (as Michael Douglas says in the movie Wall Street, ‘Greed is good’). What should be expected is that the increased corporate profits and personal incomes must be taxed by the government - something that is obviously a problem in Armenia.

In reality, the top businessmen must also realize that they are better off paying taxes, since by paying less they enter into a compact with corrupt politicians and expose themselves to risk of extortion (for electioneering, for gifts etc). The immediate payoff may be significant (land plot, forested area for dacha, etc), but the long term effect for the business people is zero when all the bribes accumulate. After all the Armenian tax rates are not so high - is it 20% or 25% in the top bracket?

I hope so, and I hope the President is genuine in his declaration and has the power to do something. I think these are the issues that determine whether a state can function or not. As you point out, the problem in Armenia is the distribution of wealth. This is a problem everywhere of course but in countries such as Armenia and every other CIS republic one guesses, it is especially pronounced with their being very little middle ground between the filthy rich and the ridiculously poor.

Let’s see. The opposition are again talking about protests and regime change this April but as we mentioned in a previous discussion, the situation is not the same as last April (no one year deadline passing for the suggested referendum of confidence) and the lesson of Ukraine and Georgia was that something can change when people stand up for their rights and there is outside interest at times of elections.

Personally, I’d say that if the Government showed the political will to do something about these kind of problems during 2005, then this is a significant opportunity for real progress. Many here tell me that it won’t happen, of course, because everything rotten is part of the same system but I can but hope and monitor what happens just in case this time, we’re lucky and it’s not all merely declarative (which will add to discontent if this is the case).

Let’s see.

Cheers,

I think this was part of what went wrong in Georgia around 2001 and certainly picked this up as a main source of complaint from Georgian citizens in Spring 2003. That is, the government hassles us for taxes on already low salaries but lets the big boys get away with. As a result, people hide their incomes and discontent grows with the government and the state can not fulfil it’s budgetary requirements.

I actually consider this a huge issue in whether a country can sustain itself or not and also, whether it is internally politically stable or not.

Still, if you were just joking, then okay. I mean, I can hardly see that anyone can justify large commercial companies, many of them owned by oligarchs and government ministers, using their connections and illegal activities to make HUGE sums of money and then not at least give something back to the country in the form of taxes on that profit.

When this happened under LTP, I’m sure you were extremely vocal in your condemnation of it (it is after all, corruption) so I don’t suppose that your opinion has changed under a different President.

It’s not «ոչ–օգտի–համար» - they are called in Armenia շահույթի նպատակ չհետապնդող ընկերություն

Still, we have to hope that 2005 will be different.

Cheers,