Oligarchs Are Not Smart Enough

The director of one of Armenian Software, the major IT companies in Armenia, Ashot Khachatryan raised a very important issue. He demanded a government report on the activities of organizations which are called to carry out reforms in the IT spheres. Incubator Fund for Enterprises was established 10 years ago. Our assessment of the activities of the fund which is funded by taxpayers is negative,” his statement runs. Armsoft demands an audit at Incubator.

This is a very serious issue. Armenia, landlocked and blockaded, Armenia must develop the spheres which do not need transportation, even “packaging” and have serious demand at the world level. Moreover, God gave Armenians a good intellect, flexibility for technical sciences.

Anyway, a lot of Armenian oligarchs have very specific understanding of business. They think business is buying something at a cheap price and selling it at a high price. Everything is fit for this business, from the game with the rate of foreign currency to banal games with scales. The economic system of Armenia provides an ideal environment for this - the oligarchs are in power, they make laws, control the judicial and law enforcement systems, and nothing prevents them from receiving profits.

But we have a paradoxical situation. Business develops while economy is stuck somewhere. No one wants to make investments in the economy. Tigran Sargsyan has tried to develop the financial sector but it became a burden for the economy rather than an incentive . Besides, the world of finance is risked.

The economy may progress only in case of investments in real production. And if it is not helpful to produce goods that are difficult to transport, the information technologies require almost no logistical effort. For their development only will is required, as well as it is required to exempt the major IT company from taxes for the beginning allowing them to develop and help to organize trainings.

But in Armenia, formal organizations and funds are created which sometimes hinder but not help the sphere, eating the money which should have been directed to the development of this sphere. No one thinks about creating a branch of “silicon valley” in Armenia, cooperation with the American IT companies. As a result, the Armenian economy continues to rely on retailers and traders of natural resources.