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Corruption, Civil Society and Institutional Reform: Tigran Sargsyan at the World Economic Forum

At the Jun. 8 session “Spotlight on Russia” at the World Economic Forum on Europe and Central Asia in Vienna, Armenian Prime MInister Tigran Sargsyan, in his four-minute opening address, addressed various issues such as setting up innovation centers in Armenia, the fight against corruption, institutional reforms and the Belarus-Russia-Kazakhstan customs union.

The prime minister spoke in Russian, but his words were translated simultaneously into English. His remarks below are transcribed verbatim and in full from the video recording of the session on the World Economic Forum’s official website:

On the matter of “setting up some sort of innovation centers, what efforts have been made in Armenia specifically, there are any number of circumstances that prevent us from successfully developing such innovation projects, especially to do with funding and the third had to do with the investment climate and we have a number of problems there because we have to carry through institutional reform. that has to do with your fourth question and what prevents us from doing that is corruption.

“So we have to tackle the matter of corruption. We have to find a way to overcome corruption which is putting a break on everything else. For transnational corporations, corruption and the current investment climate are not perceived as terribly risky. What’s more important for them is the political foreseeability of developing the country. The investment climate in our part of the world as it relates to [is more important for] small- and medium-sized businesses [in the country], because you have to have a middle class for that. Unless you have the middle class, you can’t have small- and medium-sized businesses or have a civil society, so if we want to see really fundamental change in the country, if we want to see a more favorable investment climate, if we want to see institutions functioning properly then we have to create a civil society and what emerges is that in order for that to happen and in order to develop small- and medium-sized businesses, we have got to develop a potential for combatting corruption.

“I think that the first remedy is institutional reform. We have to have the political will in the administration to resist corruption. But when political will emerges, it tends to be when people are fully convinced of their right-doing. If the authorities have that conviction, that what they’re doing will be good for the country, good for the people, good for the future of the country, then they will engage in such reforms.

“In essence, that’s what it involves. All of the processes underway in Russia have an impact on what happens in Armenia. We are part of the same economic space, we have similar outlooks, we have similar cultural background. As to the customs union, and we’ve heard this question raised any number of times, as far as Armenia’s concerned, we see no real gain to be had by joining it. There are economic reasons. We’re already a member of the World Trade Organization; we have been since 2003, and we have been pursuing a sufficiently liberal policy, export, import duties, and all the rest that come under that heading, so there’s really no point in joining the union… We don’t share a common border with any of the countries. What would be the advantage then in having goods from Armenia that do not have to travel aboard [sic] from one of those three countries be exempted from customs duties?

“So as I say, we stand to gain no advantage; rather, we would have to review all of our own customs duties and bring them into line with what Russia, Kazakhstan and Belarus are imposing. That would entail certain changes in our own economic national structure and that’s very difficult to assess at this stage. Thank you.”