RESEARCH 10. OLIGARCHS IN ARMENIA
Author:
Nelson Shahnazaryan, PhD in Psychology
in cooperation with "Ameria" CJSC
Contents
A. Common Information About Research
1. Oligarchs of Armenia. Who are they?
2. How they do the business?
3. Oligarchs and the state.
4. Oligarchs and social responsibility.
5. Scripts of development 2020.
Yerevan - 2003
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Summary
The research was carried out in March-April of 2003 by the research group, consisting of Armen
Egiazaryan (head), Vahram Avanesyan and Nelson Shahnazaryan, in cooperation with Ameria CJSC.
Goals of the research:
To present some demographic and socio-psychological characteristics of the most influential
group of the Armenian establishment;
To analyze their ideas about the conditions of carrying on business in the country, the mutual
relations with the state, political power, the mutual relations with the society, the social
responsibility of business;
On the basis of the collected material to work out the scripts of the development of socioeconomic situation in the country for the medium-term prospect.
Methods: The deep interviews with the Armenian big businessmen ("oligarchs") and experts,
13 interviews in total, as well as the analysis of the publications in the Mass Media.
Basic results.
1. Demographic and socio-psychological characteristics.
All Armenian oligarchs are men. Their average age approaches 50. They all have a higher education
(sometimes - two ones or even the diploma of Candidate of Science), in quite different fields economics, engineering, pedagogy, philosophy and so on.
The spread opinion about oligarchs as people with a shady past, former "quarter authorities" does not
correspond to the reality. Some of them used to be engineers, the heads of different levels, teachers
and so on.
At the same time, none of our interlocutors acquired systematic knowledge of the economic
bases, philosophy and ethics of the current business in the conditions of a social market
economics.
As to the oligarch's' personal characteristics, in particular, their life philosophy, the system of value
orientations, purposes and so on, this problem requires a more in-depth study. At any rate, one can
state that the present generation has chiefly formed in the last ten years of the soviet power, in the
"years of stagnation" with its such negative characteristics, as an ideological cynicism, general
corruption, low labor moral and discipline, the output of poor products.
Finally let us note that most of our respondents achieved more or less appreciable successes in early
90s, though a few people began to ascend to influential positions after 1997-1998.
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2. Business philosophy and ethics.
The business in modern Armenia functions in a very complicated legal, economic and sociopsychological environment. In the relationships with the state institutions, partners, competitors, etc.
the Armenian oligarchs are guided by the most complicated mixture of official laws and really
established unwritten norms and rules, taking into account the well-known to all players hierarchy of
statuses of each participant in the pyramid of a real political power in the country. Upon this
objective basis is imposed the emotional fabric of personal sympathies and antipathies (mainly - the
latters), old scores and insults, blows missed and delivered in the competitive struggle in the
competition for possessing prestigious villas, automobiles, a number of bodyguard, successes in a
supervised kind of sports and deputy mandates.
In these conditions no equality of everybody before the Law has to be spoken about, and the
appearance of new big players (including foreign ones) is badly complicated, especially without the
support of the first persons of the state.
At the same time one could notice that not only the "bottoms", but also the "tops" in modern Armenia
had been tired of living in the uncertain, opaque and dangerous environment.
Apparently, in the society the need for stability, reliability and predictability, i.e. for
Supremacy of the Law, is increasing.
Finally let us note that most of Armenian oligarchs in the objectively complicated geo- and internal
political conditions are so overloaded with various, including political, problems, that the issues of
strategic planning, the vision of their business prospects 5-10 years ahead, are insignificant for them.
3. Relationships with the state
On the basis of interviews we have had rather a firm conviction that the state, its machinery and
institutions are perceived by the oligarchs as a dangerous force, able at any moment to cause
serious damage to their business.
In these conditions the oligarch's influence on the policy of the state and its institutions is carried out
(and will continue to be carried out in the prospect) by means of:
Personal contacts with the President and his surroundings.
Protection of their interests through their contacts in the executive, law-enforcement and
power structures.
Pressure upon the social and political organizations and Mass-Media.
Control over the substructures of the state power on "their" territories (i.e. in the districts of
residing and business registration).
As well as by means of direct entrance into the official structures of power - the Parliament, and
sometimes into the Government.
At the same time, many oligarchs supported the civilized lobbying of their interests through political
parties, however asserted that in the existing conditions such lobbying was unreal.
According to the political position most oligarchs take a place in the power camp, though among
them there are both neutral and opposition persons.
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4. Social responsibility
To all appearances, the oligarchs are inclined to limit their social responsibility zones to their
enterprises and quarters of residing (or their origin region), where they support educational, medical
and cultural establishments and are engaged in charity.
We failed to notice the sense of responsibility for the whole country, the sense of master in it, except
for the support of the kinds of sports they supervise.
Meanwhile, to all appearances, the issues of strategic development of the country, such projects as
"Armenia - 2020" were simply neither raised before them nor discussed by anyone in the serious and
responsible form.
There is a strange situation arisen when neither the oligarchs, nor, as it is thought, the state
officials and especially ordinary citizens consider themselves full masters in their country,
responsible for its future.
5. Development scripts
The two scripts of development of the socio-economic situation in the country are examined.
In the realistic variant it is supposed that for the prospect will be kept approximately the same
conditions, as now, i.e. the consumer motivation and negative moral and psychological climate inside
the establishment, rather opaque and unpredictable business-environment, the constant threat of the
state's negative intervention and the limited social responsibility.
In this case Armenia according to its characteristics remains for a long time (or forever?) the Third
World country.
In the optimistic variant it is supposed that with the efforts of the President and intellectual elite of
the country one will manage to form in the society the atmosphere of social solidarity and synergism,
the motivation of its development as a whole, to provide the rates of economic growth at a level of 15
% and more per year, which will allow to approach the showing of the developed states in the
medium-term prospect.
ARMENIAN OLIGARCHS
A. General data of the research.
The research was carried within the "Armenia 2020" project in March - May of 2003 by the research
group, consisting of Armen Egiazaryan (head), Vahram Avanesyan, Nelson Shahnazaryan and in
cooperation with "Ameria" CJSC.
Goals of the research:
A. To present some demographic, social and psychological characteristics of this influential
group of the Armenian establishment.
B. To analyze the big businessmen's ("oligarchs") ideas about:
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legal, economic and socio-psychological conditions of carrying on business in the country;
relationships with the state and political power;
relationships with the society, the social responsibility of business.
C. On the basis of the collected and analyzed material to work out the scripts of the development of
socio-economic situation in the country for the medium-term prospect.
Method - in-depth interviews (under the standard scheme) with the well-known businessmen of the
country in the banking area, manufacture, trade and services, mass media, as well as the
representatives of the Ministry of trade and development, the Union of industrialists and businessmen
and independent experts. The publications in the Mass Media were also used.
13 persons in all were interviewed in March - April of 2003.
The certain difficulties were connected with the selection of the persons, who can with enough
reasons be related to the category of "oligarchs". The information about the real volumes of business
of this or that businessman in our conditions is inaccessible, and, strictly speaking, it cannot be the
only selection criterion. Some of our respondents are widely known, and in the society they are
perceived exactly as oligarchs. The volumes of economic activity of others and their influence in the
scales of Armenia are very great, but their names are little known to the public.
Let's add that for various reasons we failed to meet all the planned persons.
At last, it is not uninteresting to quote here the opinion of an expert who, having learned about our
research, noticed:
"This matter is vain. Today they're oligarchs, and tomorrow, after the power change, 2-3 people of
this group will remain as it used to be".
I. Armenian Oligarchs- who are they?
Sex:
All the Armenian oligarchs we have interviewed are exclusively men. Moreover, men are practically
all well-known businessmen, politicians, statesmen, i.e. the whole economic, political, as well as
basically the intellectual elite of the country.
Age:
The average age of the interviewed oligarchs approaches 50; the youngest is 40, the oldest is 58.
That is, all of them as persons formed in the conditions of the Soviet ideology and the Soviet way of
life, and the period of stagnation with its such notorious characteristics, as a general ideological and
moral cynicism, corruption, the habit to work carelessly. The success of an enterprise most often
depended then not upon the effective management, the knowledge of market conditions or an
optimum innovative policy, but upon the skill to maintain "mutually profitable" personal contacts
with the higher heads and supervising bodies and the ability to dexterously evade laws.
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Education:
All oligarchs - to the Soviet measures - are well educated, have diplomas of this or that institute of
higher education (sometimes even two ones). Professionally these are both economists and teachers,
sportsmen and engineers, philosophers and so on.
At the same time it is characteristic that the knowledge and skills to work in the conditions of
democracy and market economy were acquired by them exclusively through experience, but in
practice none of them even has systematic conceptions of the western model and philosophy of
business.
In rare cases our respondents mentioned the read books or work with "Internet" (in two-three cases),
and the others mainly referred to their rather rich contacts with the western partners both here and
during their foreign trips.
In this connection arises the problem of the oligarchs' systematic acquaintance with the theory,
ethical principles and philosophy of the current business in the conditions of a social market
economy. Of course, it is naive to expect that the adult people, who have achieved serious successes
in their life, will support with enthusiasm this suggestion and want to learn something again.
However, at the effective preliminary study, authoritative substantiation and corresponding
organization, the idea of a series of the short-term (2-3 days) intensive seminar trainings for a certain
group of oligarchs seems to us though improbable, but not impossible.
Work experience till 1991:
There is a certain widespread stereotype of conceptions of the Armenian oligarchs as the people, to
put it mildly, with a dubious past - as the "people with nicknames", criminal authorities.
Actually it is far from being so. Some, rather prominent and influential businessmen used to be
engineers, teachers, rather notable workers in the fields that they are currently supervising, komsomol
workers, etc.
Background:
The majority of our oligarchs are not provincials, but come from the Yerevan families of various
social status. At the same time most of them - as well as all Yerevanians - have rather demonstrated
regional "memory of ancestors".
This fact is important to mention, since the business and political alliances in today's Armenia are not
rarely based on the principles of regional clannishness (the most well-known example is the so-called
"Karabakh Mafia").
Personal characteristics:
In the contemporary Armenian society over the recent 10 years, i.e. historically very short period of
time, the generally accepted conceptions of the social type of "a national oligarch" - as well as of the
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middle class representative, poor segments of population, a politician and an intellectual, etc. have
not formed yet. That is the society social and status structure has not yet formed and stereotyped in
terms of status-role expectations, behavior stereotypes, characteristic system of values, ethics and
moral, etc. In such conditions it is complicated to speak about the generalized psychological portrait
of a contemporary Armenian oligarch. Perhaps, the only evident general feature was the increased
watchfulness, some constant alert to immediately react to be defended or attack against the alarm
signals of the environment. Characterizing themselves, explaining their success, our interlocutors
also referred to such qualities, as boldness, "spirit", will and persistence.
II. How they do Business.
2.1. Current Situation
Majority of our respondents has achieved more or less considerable successes in the business already
in the first half of the nineties, but on the outstanding positions were put forward at the beginning of
this decade. Some persons have come on the level of large business after 1997-1998 years, which is
connected basically (but not always) with the change of political power in country.
For present-day large business-structures of Armenia is characteristic rather diversification of
interests on different branches of economics, than particular specialization. Quite often known
holdings in parallel make, for example, particular aspects of food and building production, realize
export-import operations with any other goods, incorporate bank, and also possess the network of
restaurants and hotels and have certain interests in MASS-MEDIA.
One of major problems of our study was the problem of business-ethics, acting in present-day
Armenia, and in general of existing business-environment.
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In what extent business relationships with partners, state, consumers and personnel of
own companies are regulated by official legislation and in what - by unwritten norms and
“concepts”?
Whether successful entering in this environment of a “person from the outside”, new
large player – an alien (including aliens from Diaspora) or citizen of Armenia is really
possible?
What are essential paragraphs of rules of the game in the large business in present-day
Armenia?
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Both large and average, and also small business in present-day Armenia operates in very complicate
legal, economical and social-psychological environment.
First, as well as in other transitional countries, official legal field of economical activity still enough
exposes to active and various changes. So, only for three last years about twenty relevant laws of
such nature are accepted (and, as one our interlocutor has noted, frequently laws are approved for
“particular people”).
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Second, historically Armenians never were characterized as a particularly law-abiding people, and
relations between people, including business, in many respects were regulated and are regulated on
the basis of a certain conglomerate of official laws, ethnic traditions, quasi-criminal “man's
etiquette”, personal-related and fellow countryman links etc.
So, on a question, what moderates from absorption by competitors (or of competitors), one of our
interlocutors answered:” We are people, aren’t we? And they should live too”, and only then has
recollected the antimonopoly legislation.
At last, as stated above, the business-elite of present-day Armenia is composed of people with
different origin, experience, system of values and ethical principles. Indeed, we can speak about
particular prevalence - or, more precisely, about enough wide presentation of carriers of “authority
from the block” psychology, achieving successes not by quite legal ways. However, would be a gross
error to consider, that all variety and complicate relationships inside present-day Armenian businesselite is possible to reduce only to such, quasi-criminal psychology.
So, couple of years ago underground fight between producers and importers of cigarettes was
splashed out on the pages of newspapers and has found its end in the National Assembly, where after
quite well-reasoned debate the compromise level of the customs duties was fixed.
Another time they told us about steady tradition: from time to time all large players in the given
sphere (5-6 persons) assemble unofficial meetings to find mutually beneficial solutions of current
problems.
Actually, in relationships with state institutes, with partners, competitors etc.
Armenian oligarchs are guided by very complicate mixture of written and substantially
prescribed unwritten laws and rules, taking into consideration hierarchy of statuses of each
participant in a pyramid of real political power in country, well known to the players.
Nevertheless, to complete the picture it is necessary to mark, that almost all our interlocutors agreed
that business environment was noticeably improved in comparison with the beginning and the middle
of the nineties, and excessively high taxes are its most major deficiency.
On this objective basis an emotional touch of personal sympathies and antipathies, old scores and
insults, skipped and marked in competition shocks, in competition for possession by prestigious
private residences, automobiles, number of body-guards, successes in a supervised sports and deputy
mandates is superimposed.
Armenia is a small country and oligarchs live and work absolutely close from each other. Another
oligarch is not an abstract economical structure, but live person with his sympathies and antipathies,
pleasant and unpleasant strains, existing friendly, neutral or hostile relations.
In these conditions about equal protection of the Law for everybody should not be spoken, but
each of them knows the volume of his own real rights and possible limits, including in matter of
fulfillment or violation of official rules.
For a person from the outside, wishing to begin business in this environment, it will be very difficult
to clear up these “Asian” cobwebs of vertical and horizontal structure of influencing, level of
proximity to centers of power, clannish interests, old scores and insults, distinctions between players
in their systems of values and styles of behavior.
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In such environment is extremely naive, for example, count on a “golden key” of an elementary bribe
to this or that official, since the real structure of power can not coincide at all with the official one
and can have regional or branch-wise features.
The appearance of new players is hardly hampered, could say - it is impossible - and for objective
reasons. Rather restricted home market of Armenia is already hardly and strictly divided between
known, large producers and importers, defending their segments by all legal and illegal methods. The
particular chances for absolutely new subjects remain, certainly, in not developed niches, in
production of new kinds of goods and services. However here again there are situations, when the
success of the “stranger” becomes stimulus for remarked it domestic oligarch, which starts to survive
him from the market by all means.
Certainly, it is necessary to mention about undertaken in the last years by the state measures on
promotion of flow of external investments. This, as well as creation of a preferential legislative field,
foundation of the Armenian Development Agency (ADA), functioning of suitable structures of the
Ministry of Trade and Economic Development. However substantial processes of exterior investment,
as demonstrate held earlier our studies too, are bumped on strong resistance oligarchs and
government officials of a different level.
Thus, on our view, the situation in the sphere of exterior, large investment projects in Armenia
is unfavorable, especially without support of leaders of country.
2.2. Perspectives of Business Development.
The objective limited nature of a home market of Armenia dictates to oligarchs the choice of one of
alternate policies of the development:
а) Diversification of economical concerns inside country.
b) Exit in the new markets, expansion of the export of goods and services.
(We shall mark also the third real possibility - repartition of the property, seizure in this or that form
the successful businesses from more weak competitors, that, however, is infrequent enough
phenomenon in the last years.)
Today for the major part of our interlocutors the first alternative is more real. To the traditional for
the given company directions of activity the new aspects of production or services, in particular, in
the field of import substitution are added - with bigger or smaller success - where there are real
reserves in production of food and building production, in production of light industry, in hoteltourist business etc.
As to export perspectives, our interlocutors spoke about it enough reservedly. As a matter of fact,
after the collapse of the USSR, Armenia has not clearly expressed markets for the commodities
neither in locale, nor in more distant countries, including Russia. Said is referred both to electrical
power, to commodities of light and food industry, to the industry of construction materials and to
military-industrial establishment.
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Actually the only and stably exporting branch is the jewellery on the base of imported raw, and also
food (winemaking, tinned fruit and vegetables). The situation with a mining both export of copper
and molybdenum is improved. The particular hopes are linked also to export of software, where the
volume according to the expert evaluation today comes already to several tens millions dollars
(mainly - in the shade).
It is necessary to tell also about geography of the export, especially in sense of its perspectives. On
arguments those who possesses experience in this matter, exit both on western, and on the Asian
markets is hardly hampered - because of high requests to quality and standards in the first case and
because of protectionism and difficult to understanding logic of the business - in the second. In the
practice most real are markets of Russia and CIS, where the bargains strike by the usual rules,
including known shadow aspects.
It would be desirable to inform by the following subjective observation. When during interview the
speech came about problems and perspectives of the development of own business, our interlocutors,
as a rule, became more reserved and less definite, referring on geopolitical and other objective
uncertainties.
Certainly, it is true. At the same time it was necessary to note, that the majority of Armenian
oligarchs are so overcharged by various, including political (we shall remind, that the study was
conducted 1,5 months before parliamentary elections) problems, that questions of strategic planning,
vision of perspectives of the business for the following 5-10 years are not actual for them.
“The time will show, what I will do, - speaks one of known oligarchs with classic diversified
business. – I follow Korean’s example, where one enterprise of the holding maintains the other, when
it has troubles in the market. Today I don’t know, what will be profitable in a year.”
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Let’s examine one of the most important problems of our study:
- How much is probably in medium-term perspective, from point of view of oligarchs, creation
of civilized, clear and transparent business-environment in Armenia?
First, our interlocutors completely support this idea!
Certainly, it would be naive to think, that all of them were absolutely frank with us. Moreover, each
of them accused the others of dishonest practice and of benefits, perceiving itself as an exception. At
the same time we consider that it is possible to mark from our part, that the desire to live under
civilized norms was though also abstract, but sincere enough. It seems that not only the “lower
classes”, but also the “heads” have got tired to live in an immoral and dangerous situation.
Apparently, in our society the need for stability, reliability and predictability, i.e. in the Supremacy
of the Law increase.
Secondly, also unanimously, referring on the notorious “Armenian nature” (for the others, but not for
itself!), our interlocutors affirmed, that it is impossible. However, as a result of our persevering,
making the matter more exact questions it was clarified, that
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- The majority of Armenian oligarchs count that it is possible to achieve a considerable
improvement of the business-climate, if as the initiator of this process the functioning
President will act.
(On the other hand, such judgment was pronounced too: “the President can not anything order to
oligarchs since they have provided for him the victory on elections”.
Apparently, this major and not simple problem requires more serious study and here we shall not go
beyond the statement of foregoing judgments).
At the end of this paragraph I'd like to cite one more suggestion, made by a businessman of the “old
school”: “For sharp improvement of the climate it is necessary to return from Moscow our businesselite”.
III. Oligarchs and the State.
3.1. Current Situation
Hardly even rather most experienced political scientist will manage adequately to describe the
structure of power, existing in present-day Armenia.
Undoubtedly, most strong center of influencing in country is the President with his proximate
surrounding. At the same time on the last elections the serious strength of opposition was
unexpectedly exhibited. Apparently, the relationships of the presidential pole with dominative
Republican, and also influential Dashnak party are ambiguous. The relationships of any of called
centers of power with some upper oligarchs are peculiar enough and are anyway completely not
strictly vertical. As a matter of fact, if we take advantage of classification of Max Weber, in presentday Armenia as acting it is impossible to mark out any of classic bases of power - rational-legal,
traditional or charismatic. Anyway, the Higher arbitration, the higher Intellectual authority on behalf
of the Laws, Church or “Moscow” is missing in country and relationship of power-subordination
in many aspects is founded on the principle of force.
In these conditions majority of oligarchs - partly forced - somehow or other work for enter into the
power or, at least, to have with the power good, close relations. And the traditions of this
phenomenon go from the Soviet period, when the representatives of oligarchic – on those times families from middle of the seventies become to penetrate into party, state and law-enforcement
bodies.
In the newest period this tendency was brightly exhibited, since parliamentary elections of 1998,
when some known businessmen become deputies of the National Assembly. Besides, now it is
possible to refer to the category of oligarchs a number of high-ranking representatives of executive
power, mating in semi-legitimate form civil service and large business.
One more, known method of influencing on the power is personal closeness of one or another
oligarch to the President - the phenomenon, also typical enough for Armenia.
At last, the mechanism of civilized lobbying operates to a certain extent: “Each of us has 10-15
friends among deputies and as much in government - speaks one of oligarchs from a category of
“undistinguished”- In case of need we work with them.”
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To complete the picture it is necessary to describe also the location of our interlocutors on the axis
“authorities-opposition”. On our view, by this criterion it is possible enough confidently to mark out
three groups of oligarchs. First, the largest – closely connected with authorities and two about
identical - neutral (to be exact, loyal) and the last, - to a certain extent in opposition.
Let's remind that the inquiry was realized in conditions of strong public polarization, in a period
between two election campaigns, and this circumstance had an effect for behavior and estimations of
our interlocutors.
3.2. Perspectives
The 2003 for Armenia is a year of serious political changes. Besides presidential, parliamentary
elections, referendum on constitutional variations, it is possible to mark also two considerable
factors, defining new realities of internal and foreign policy in country.
First, not only the epoch of Armenian National Movement, AMN (1991-1998) is actually completed,
but also there comes to the end after act of terrorism in Parliament post-AMN situation with its
various psychological and political metastasizes.
Second, perhaps, the period of complimentary of orientation in the foreign policy is finishing. In the
economical field an evidence of it is the transfer of all power complex of the country and series of the
largest plants of military-industrial establishment under control of Russian companies. In the political
field closely connected with Russia orientation was legibly flashed in connection with war in Iraq,
when Armenia, as against neighboring Georgia and Azerbaijan has appeared outside of antiiraq
coalition, but together with Russia.
About the same testifies the victory on elections of R.Kocharyan, openly supported by Russia, and at
the same time obstructed on the part of the West.
Together with it, certainly, the resources of western influencing in country are saved - and in the long
term, in all probability, they will be augmented. Here besides such, apparent arms, as the credits of
World Bank both persevering control of Council of Europe at the state level, also powerful system of
selective financial support of closely connected with West social and political organizations and
MASS-MEDIA and also of training and retraining of the young administrative staff is operating.
All said is referred first of all to the United States, but by careful consideration the rather
autonomous and more and more noticeable role of countries of the European Community is
appeared.
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For estimation on perspective of relationships the “oligarchs-state power” relevant can seem the fact,
that almost all known oligarchs are going to run for parliamentary elections of 25th May. Actually
such impressive “campaign of oligarchs on the parliament” has rather symbolical and psychological,
than practical value.
During discussions on this, rather exotic for civilized countries phenomenon, our interlocutors named
such reasons, as “it is prestigious”, “there are more capabilities of dialogue with elite there”, “since it
was made by others, I am not worse” etc.; so the question is not so much about a real power, deputy
immunity and the more about drawing up laws, as about reasons, as it is no wonder, of prestige and
mode.
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There was also one more, more serious remark: “I with pleasure would entrust this work to any
party or an intelligent, and then support them on elections, - speaks one of well-known oligarchs, but it is impossible to trust anybody here. They will betray in no time.”
Actually, the influencing of oligarchs on the society and the protection of business still will be
realized by means of:
• Personal links with the President and his surrounding
• Lobbying the interests through links in executive, law-enforcement and power
structures
• Pressing on political organizations and MASS-MEDIA
• Direct control over substructures of the state power on the “own” territories (i.e. in
districts of habitation and registration of business).
Nevertheless, it would be desirable to point out once again, that among oligarchs there are rather
solid supporters of separation of politics from economy and establishment of civilized relations
between them, but counting, that this process should begin by the state - from a self-cleaning,
forming of stable and worthy of respect system of political parties, objective and effective personnel
selection.
“I am forced to be engaged in politics, forced to go in the parliament, - speaks young and already
well-known oligarch. - If for us act serious, respected political parties, in general there would be a
stable political system, I exclusively would be engaged in business and would not be digressed for
policies.”
IV. Oligarchs and Social Responsibility.
4.1. Current Situation.
Zone of responsibility - all country or only “own territory”?
All to a man oligarchs are convinced that their business, production by them of goods and services,
creation of thousand jobs - is their major function and main social debt before the society.
One more development of such responsibility, as our interlocutors understand it, is a charity,
frequently in the most broad sizes and forms - from support of sports (majority of well-known
oligarchs play leading roles in different sporting federations), art, formation and public health up to
direct welfare to indigents.
It, certainly, is worthy of respect and can only being hailed.
However we were interested in comprehension of oligarchs about absolutely other contents of the
concept “social responsibility of business”. Namely:
Whether the largest and influential businessmen of the country feel each one by one and especially jointly - direct responsibility for condition of matters there, for quality of life of less successful fellow
citizens, for its future?
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Whether present-day business-elite of the country has enough intellectual and moral resources to
perceive a major challenge of the present:
- or by effort of all forces and resources we start cultural, social and economical hitch and for
20-25 years we catch up with developed countries, or - for ever - rest in “the third world”?
To deep regret, answers to these key problems uniquely are negative.
Certainly, it is possible and necessary to consider deeply and comprehensively fundamental problems
of development of the country and extent of their comprehension by the society. But it is a theme of
separate talk. Here we shall try to name reasons, explaining on our view existing relations of
business-elite to the responsibility for the country and its future.
First, even in most intelligently advanced circles there is no adequate comprehension of the fact, that
the gap between advanced countries and Armenia on the basic indexes of development - gross
domestic product per head, power consumption, provision of computers and Internet, specific
expenditures on the science and formation etc. has reached already dozens of times and prolongs to
not be abbreviated, but to grow, that testifies not about quantitative, but already about qualitative gap.
Meanwhile, in intellectual circles, and at the level of ordinary consciousness the inertia of the Soviet
thinking is prolonged, when was considered, that there are some gains, one more “five years” - and
we shall catch up and pass USA.
Today not only indexes of USA, Europe or Singapore are inaccessible, but also indexes of
neighboring Turkey or some Arabian countries.
Secondly, as it proved, nobody, neither the society as a whole, nor the leadership of the country, first
of all, did not pose and did not consider with oligarchs these problems in a valid and accountable
situation. For the last years one-two episodic meetings of the President with circles of business were
held in enlarged format and they had rather formal nature.
“50-60 persons are present there, - speaks large and authoritative oligarch. - There in general I sit
and I am silent”.
Third, one more, essential reason is, that all of us, including oligarchs, are carriers of an archaic
national mentality, in correspondence with which one the zone of the responsibility of each Armenian
is confined by the family and his own “village”. In present-day, urban conditions the concept of
village was transformed to concept of the district of habitation, in this connection some oligarchs
psychologically limit zones of the responsibility to known Yerevan quarters or to the region of origin.
Who among oligarchs and in which Yerevan district is “boss” not only well-known in the society, but
also our interlocutors in talks about social responsibility made reference to their good deeds exactly
in such districts.
Let's add that such approach has also pragmatic side, as ensures also voter’s voices in the given
district - for itself or in other, necessary cases.
That’s today’s situation.
Therefore, an estrangement, the absence of feeling of belonging to the country and
responsibility for it is characteristic not only for the ordinary citizens of present-day Armenia,
about what the sociologists and the publicists speak during last years with an alert, but also for
oligarchs.
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So, whose is this country and who are its masters?
4.2. Perspectives.
We came, apparently, to most relevant and intractable problem of all study. Without feeling of
collective responsibility for the country and, hence, without motivations, without wishing successes,
development and prosperity, without social solidarity and powerful synergism, there is no sense to
expect some considerable outcomes by 2020.
Whether essential positive changes in this field are possible in medium-term perspective?
On the one hand, the centuries-old existence of Armenian people under conditions of absence of
statehood has generated a stable system of values, and the basic element of this system is orientation
on personal-family interests, instead of public interests.
On the other hand, - classic antagonism between rich and poor strata, characteristic for any society, in
our conditions become strained, because for us any richness is not legitimatize yet by traditions and
memory of generations. As well as in other post-socialistic countries all our today's rich men are
nouveau riches and to financial prosperity they came more often not as a result of honest and
assiduous labor, but by doubtful enough paths. Such - justified or not justified, - but widespread
judgment, reshapes in the society a rather negative morally-psychological climate: the “lower
classes” hate and envy the “heads” and the “heads” in response react by contempt and neglect.
On questions, posed by us in this or that delicate shape, whether it is correct, whether immorally in
conditions of widespread poverty of the population to build smart private residences, to possess
sometimes tens expensive automobiles, almost all oligarchs answered, that it is quite normal and
even useful for society: “Let everyone see, as the richness is pleasant and aspire to it too. It
stimulates activity and development.”
It appears that the forming in Armenia of an atmosphere of social solidarity and public
synergism, that, - as demonstrates experience of countries committing “economic miracle”, - is
an obligatory premise of effective socio-economic development, many forces and time will
require.
At the same time special social-psychological know-how should play considerable role.
V. Scenario of Evolution 2020.
On the basis of the gathered data and their understanding two scenario of evolution of relationships
between oligarchs and the society as well as of situation in country on the whole are proposed.
Both scenarios are based on different extrapolations of the same source situation with the following
characteristics.
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1. In Armenia, as well as in other market countries, it is possible to mark out small group of large
businessmen-oligarchs, in the decisive way influencing not only on economical, but also on political
and social processes in country.
In Armenia - all of them are men on average about 50 years old and less, i.e. as the personalities, they
were formed at the time of the Soviet power, during its stagnation.
They are so different by birth, vocational training, occupation and mode of life in pre-reform period,
and also by personal characterizations, dominating motivation and value orientation system, that is
impossible to imagine a unified, generalized portrait of “present-day Armenian oligarch”, except for
the fact, that any of them has no systematic, theoretical preparation in the field of business
management in conditions of socially oriented, market economics.
2. Their activity is realized in very complicated business-environment, where the relationships with
state institutes, partners, competitors are etc. regulated by not clear for not well-informed mixture of
the official laws, unwritten norms, ethnic traditions, and also highly depend on proximity to different
centers of political power, existing in present-day Armenia.
At the same time, as was clarified during interview, majority of oligarchs would like to do business
in stable and predicted environment, under condition of equal protection of the Law for
everybody, but with certain optimization of legal field.
Because of fundamental uncertainty of general geopolitical and internal political situation, and also,
probably, as a result of not so optimistic experience acquired in the making of the business, even the
large businessmen of Armenia practically are not interested in problems of strategic planning. The
main policy of development and security from risks remains maximal diversification of economical
activity, primarily inside the country and, in particular, in the field of import substitution.
3. Relationship between oligarchs and the state, i.e. political power is still complicated.
Was clarified, that in present-day Armenia not only small and average businessmen, but also
oligarchs do not feel protected from - justified whether or not - interventions and pressures on the
part of the state and its different institutes.
In these conditions, majority of oligarchs aspire immediately to get into government bodies, primarily
into the Parliament, and sometimes in executive structures, or, anyway, to maintain good personal
relations with the first persons of the state.
The said is referred not only to politically close connected with authorities oligarchs, but also to
oligarchs, whose positions can be considered as neutral or oppositional.
4. In comprehension of their social responsibility, present-day Armenian oligarchs basically not go
beyond the “own” territory (district of habitation or region of origin), where they maintain
educational institutions, public health services etc., and also render broad enough charity. Peculiar
expression of patriotism on a scale of all country is the support of this or that sport.
Oligarchs are practically unknown to the problem of forming of an atmosphere of social
solidarity, social synergism in country.
*
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*
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The following scenarios are proposed.
A. Realistic Version.
In the conjecture that basic characteristics of the acting actors - oligarchs, state institutes and the
society as a whole - basically are remained or a little changed.
B. Optimistic Version
In the conjecture that as a result of adequate comprehension of a problem situation, is developed and
during 3-4 years will be realized the special Program of Social Solidarity, which one sharply makes
better a social-psychological and political situation in country and creates prerequisites for powerful
civilization hitch in the first quarter of XXI century.
5.1. Oligarchs of Armenia: Realistic Scenario 2020.
(Probability - 95-97 %)
Conditions for a medium-term perspective:
•
•
•
•
The membership of oligarchs remains basically the same, as now. Are not changed
typical for them ideology, system of values, philosophy and ethics of business.
Business-environment is still complicated and opaque. There is no equal protection of
the Law for everybody. A system of the privileges continues to act, dividing oligarchs
on “friends” and “strangers”. Entering in this environment of new, large players
without approval “from above” practically is not possible.
Relations with state institutes, political power remain too close and significant. They
are characterized not by horizontal partnership and equality, but prevalence of the
state, potential threat of legal or illegal repressions.
Oligarchs do not feel and do not accept the social responsibility for all country, but
only for its restricted segments and groups of the population. In country the
atmosphere of social solidarity and synergism is not established.
At the same time in medium-term perspective the noticeable rates of economic growth
(6-7 % as provided by World Bank) and in the whole stable enough internal politic situation are remained,
on conditions that in the “frozen” state remains Karabakh conflict.
Armenia, due to high indexes in formation and public health services, remains in group of countries
with an average level of Index of development of human potential and low level of gross domestic
product per head.
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In structure of economics continue to dominate low-technological branches - production and
processing of agricultural production, mining and primary processing of copper and molybdenum,
processing of precious stones and metals. A problem remains development both of chemical industry
and light industry on imported raw. The plants of electronic industry, concerned with militaryindustrial establishment of Russia are insufficiently effectively developed.
The crisis occurrences in branches of infrastructure and in municipal services increase. Constructed
basically in the fifties-sixties motorways, water facilities, collecting systems, electric power
installations (generating and transmitting), and the telecommunications start in the mass to produce
malfunctions.
Level and quality of life of population continue to remain low, and level of polarization - high.
Between different strata of society antagonism and class enmity are remained. The “Brain drain”
continues, when the best in the generation young specialists emigrate to developed countries.
According to the cultural, political and economical characteristics Armenia remains a typical
country “of the third world”.
5.2 Oligarchs of Armenia: Optimistic Scenario 2020
(Probability – 3-5%)
Conditions for a medium-term perspective:
At the first stage is developed (one year) and will be realized (1.5 years) Program of Social Solidarity
of Armenia with following purposes:
•
•
•
•
Update of ideology, dominating motivation, system of values, philosophy and ethics
of business for oligarchs. Forming of corporative spirit, feeling of belonging to one,
most relevant for country command.
Development and acceptance by oligarchs of basic ethical principles of the Armenian
business - Ethical Code of Armenian Oligarch (we shall term it so), which one stepby-step will generate in country modern, civilized business-environment and will
guarantee equal protection of the Law for everybody.
Installation of equivalent relations between business and state, reducing of role of the
state both in direct and indirect participation in the economics.
Sharp rise of social responsibility of business. Expansion of zone of the responsibility
of oligarchs from “own” territories all over the country.
The program of the first stage is developed jointly by oligarchs and experts of the project “Armenia
2020” under direct control of higher leaders of country (the President). The program includes
organizational measures, social-psychological trainings, meetings with representatives of western and
Russian intellectual and business elite, intensive educational courses and seminars etc.
The main purpose of the stage - creation inside economical, political and intellectual
Armenian elite of powerful motivation of development for the country, changing of dominating
motivation from selfish and consumer to motivation of public development and forming of
synergetic social structure.
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The system of feedback and monitoring is simultaneously created.
At the second stage are developed (one year) and will be realized (10-15 years) basic purposes and
problems of medium-term policy of development of Armenia, orienting it on the exit in group of
developed countries.
Major checkpoints of policy should be:
•
•
•
•
•
•
•
Ensuring of growth rates of gross domestic product at a level of 15 % and more annually.
Growth of science intensive and high-tech branches in structure of gross domestic product.
Decrease of a level of social polarization on an index of proportion of the incomes of 20%
riches to 20% poor population from 30-40 to 15-20 times.
Decrease of the level of corruption.
Creation of powerful national and communal social funds in country with active, public
participation of oligarchs.
Radical reform for educational system. Cultural revolution.
Ensuring of considerable reemigration. An optimal settlement of frontier regions and
Karabakh. Stimulation of growth of birth rate etc.
All measures are expedient for realizing in a context and perspective of the entrance of Armenia
within 15 years in the European Community.
However in connection with this, vital for the future of the country problem it is necessary to make
the following remark.
Now within the framework of CIS processes of reintegration, forming of common free market zone,
consisting of Russia, Byelorussia, Kazakhstan, Ukraine etc. rather emphatically are realized.
Armenia here takes a position of benevolent, but reserved spectator that, as a matter of fact, is
logical transfer of complementary philosophy on area of external economic orientations.
Whether it is necessary for Armenia clearly to be determined with the external economic priorities?
Whether there are for country enough resources and degree of freedoms for an independent
realization of such choice? Whether it is necessary to us to achieve a separate entrance in European
Union, how it has taken place in a case with the WTO, or it is more expedient to wait regulation of
relationships between European Union and Russia (CIS)?
On our view, it is a theme for separate, serious study.
Possible Risks
The major risks of the given scenario are connected with the first stage.
First, extremely improbable represents the idea that for majority of present-day Armenian oligarchs
will be possible to generate the comprehension of a problem situation, in which one Armenia remains
in connection with threat to find oneself for ever in the group of countries of the third world.
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The experience shows, that such comprehension is difficult for achieving even for intellectuals.
On the other hand, even the comprehension of such position for many people calls not motivation for
development, not desire to achieve the best future for fatherland, but only even more active aspiration
to supply of guarantee for own children in that sense, that by all means to convey them in the “first
world ”.
Secondly, even, if the “Ethical Declaration of Armenian Oligarch” will be developed and adopted,
the probability of its conservation even within several months or one-two years, practically is equal
to zero. Any random or premeditated violation of its bases instantly will reduce to its absolute failure,
as the extremely rigid, suspicious and intolerant people participate in the matter.
Whether there is a sense in the optimistic scenario?
It is a romantic and naive history with a vague ending?
Alternative to this, we repeat, - is the “third world”.
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