Prepared Remarks for the American Chamber of Commerce in Armenia (2005)
It's been several years since we had an event like this in Yerevan. Even the incorrigible optimists among us probably could have predicted the progress, high growth rates and indicators of economic development evident particularly on the streets of Yerevan.
Of course, it's never fast enough. Everyone's impatient. In a fast paced, globally competitive world, few have reason to dig deeper to find hidden value or make the extra effort it takes to invest in Armenia. But for those who do, the results are increasing encouraging.
What accounts for the growth?
In part, Armenians are funding Armenia and their families in Armenia. In part, Armenian companies, products and services are maturing. The food processing industry, for example, provides an interesting example of the trajectory from high dependence on imports to import substitution to exporting to the region and now to the world. For a small land-locked country with sometimes hostile or unpredictable neighbors, food security is no small thing.
Armenia's energy system, while dependent on nuclear energy, is a net exporter as well and provides relatively cheap and reliable electricity, with high level of collections and low loss rate. For a country that had an energy crisis and energy blockade in the mid-nineties, this is also a great achievement.
Road Construction has made the country more navigable. Still more work needs to be done.
Telecom the introduction of competition and the freeing up of some of the internet has helped. More needs to be done.
Construction in general helped absorb some of the urban workforce left jobless due to the deindustrialization.
Urban renewal and construction have been an important spur for economic growth and development, particularly in Yerevan, where the real estate market has risen significantly over the past several years.
Perhaps emergence of real global leaders in the hi tech sphere and the steady and substantial growth in tourism have
The public and private sectors are still under-resourced and lack the ability to properly comply and implement many of the laws and regulations that have been adopted. This sometimes leads to circumvention and corruption. As an attorney, business advisor and businessman myself, I believe that"streamlining, automation and modernization" are urgently needed to make Armenia's institutional infrastructure more competitive. Compared to the 70 more competitive environments in the world, there is too much paper, too many signatures, seals, and handwritten register books and too much emphasis on insignificant details while more detrimental abuses are ignored.
Having lived and worked in the CIS for over a decade now, I have concluded that the problem is not "enforcement", but the "policy and laws themselves." Good laws are laws that people are on the whole willing and able to abide by and enforce. If they are not willing or able on the whole to abide by and enforce them, then these laws are not good laws and should be reformed until they law matches the resources and the willingness and ability of the people to abide by and enforce them.
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