It's a defining theme for Armenia's presidential campaign.
Five case studies show how deep the debate over corruption actually goes.
Armenia may be regarded by Western lending institutions as a reform leader in the former Soviet Union, but its microeconomic environment still leaves much to be desired, with government connections remaining essential for doing business. Large-scale imports of fuel and basic foodstuffs, arguably the most lucrative form of economic activity in the country, have been effectively monopolized by a handful of wealthy entrepreneurs close to outgoing President Robert Kocharian and Prime Minister Serzh Sarkisian.
Offshore-registered companies belonging to one of the so-called oligarchs, Samvel Aleksanian, account for more than 90 percent of wheat, sugar and cooking oil imported to Armenia. Imports of gasoline and diesel fuel are controlled by a cartel of four or five other companies also owned by government-linked tycoons. The suspiciously low volume of those imports, as reported by the Armenian customs, is another source of controversy. Based on official statistics, for instance, consumption of gasoline in Armenia has shrunk by more than half since 1997 despite a surge in the number of cars owned. (Officials attribute the decrease to the number of cars now running on liquefied gas.)
This has given rise to opposition allegations that the country's top leaders personally benefit from the existence of de facto economic monopolies by sharing in massive profits made by them. Levon Ter-Petrosian, Armenia's former president and an opposition presidential candidate, has cited the official import figures to accuse the ruling "criminal and corrupt regime" of pocketing billions of dollars in unpaid import duties and other taxes.
The Armenian authorities have brushed aside the allegations. Kocharian insisted on December 25, 2007 that it is wrong to call the large-scale importers monopolists. He suggested that other local and foreign companies avoid competing with the latter for purely "psychological" reasons.
The Government Says:
"We are talking about economic entities having dominant positions, rather than monopolies. The non-entry of other entities into their area of activity is apparently conditioned by psychological factors."
-- President Kocharian addressing Armenia's 60 leading businesspeople on December 25, 2007
The Other Side Says:
"Imports of 21 basic consumer goods to Armenia are in the hands of a few monopolists. What we are seeing is a monopolization of whole sectors of the Armenian economy."
-- Artur Baghdasarian, opposition presidential candidate and a former parliamentary speaker, speaking to a group of small business owners on January 23, 2008.