Tuesday, 20 October 2020

E Editorial

Daily life of post-oligarchic Armenia: crisis in the “property-labor-state” triangle

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Periodically arising disputes between economic entities and this or that state body, apparently, are becoming the norm in Armenia. A significant wave of protest against “Spayka” employees in connection with the arrest of its director suggests that the country is not dealing with a series of special cases, but with certain regularity. Put in a simpler way, with a tangle of intractable problems associated with new conditions for the activities of business entities. Where this trend may lead, so far it is difficult to say. But one thing is clear - the sphere of relations in the “property-labor-state” triangle enters a state of protracted crisis, which requires a radical revision of these relations.

It should be noted that the current state of affairs was quite expected. One of the main consequences of the dismantling of the criminal-oligarchic system in Armenia was the fact that large owners lost the levers of state power. Capital has left power and henceforth has to form its relations with the new government in a new way. The former mechanism of guarantees for the protection of property and entrepreneurship (the oligarchic agreement on the division of spheres of influence, together with the centralized racketeering) has been eliminated.

Economic entities are invited to work within the law. But given the fact that the owners of the majority of large entities today are former corrupt officials and shadow businessmen, to whom the authorities make demands to return illegally acquired funds to the state, the situation of many owners has become much more complicated. This provision is further complicated by the fact that society does not recognize the legitimacy of large property. The government, refusing to collect shadow taxes (racketeering) from the owners, inevitably deprived them of their guarantees from claims of law enforcement agencies and the tax and customs services. Obtaining security of property and entrepreneurship in response to the extorted dues is no longer possible - the authorities do not agree to such a deal.

In such conditions, large owners, in fact, are disenfranchised. To implement its economic policy and, at the same time, to solve political problems, the government is looking for ways to control the owners of economic facilities. Such a desire comes at least from the fact that large owners are the sponsors of most of the media, which sharply criticize (even openly bullying) the new authorities. The new government has only one method of influencing the owners - the presentation of legitimate claims and the identification of illegal actions of the latter. The new government has only one method of influencing the owners - the presentation of legitimate claims and the identification of illegal actions of the latter. But proprietors cannot fulfill the requirements of the government - by too many threads they are connected with the shadow mechanisms of the past. They cannot even take their workers out of the shadow and pay additional taxes to the state. Only one thing remains: to resist the actions of the government, first of all, the tax service and the investigators, revealing this or that lawlessness at the enterprises. But for this one needs resources.

It is already noticeable that, facing unaccustomed demands and actions of the government, large owners appeal to the employees of their own enterprises for help in confronting the government. However, the interests of working groups do not coincide in many ways with the interests of the owners of enterprises. On the contrary, in many respects they coincide with the interests of the government, which requires the legal registration of employees of enterprises. At first, business owners, out of habit, can still use blackmail in order to mobilize workers for protest actions. However, such an approach cannot be effective for a long time - employees of enterprises objectively acquire opportunities to dictate their conditions to owners. Objectively, they turn out from powerless shadow workers into full-fledged participants in economic processes.

In fact, stable lines of confrontation are being formed in the country in two directions: government- large proprietor and large proprietors- employees of enterprises. On both lines of new relationships, unsolvable problems arise. The mechanisms of these relationships require a radical revision. Whether or not supporters of the conflicting camps want to go for it is not so important - life does not ask for their consent, but forces them.

The Armenian Center for National and International Studies

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Yerevan, Armenia


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