Accessibility links

Breaking News

Armenian PM Calls For Enlarging Middle Class

Armenian Prime Minister Tigran Sarkisian
YEREVAN -- Armenian Prime Minister Tigran Sarkisian says that expanding the country's fledgling middle class is a necessity for democratizing the country, RFE/RL's Armenian Service reports.

Sarkisian said the government should fight against "oligopolies" controlling big chunks of the Armenian economy and create a fair investment climate for that purpose.

Sarkisian underlined this point in a speech he delivered late on April 26 at a seminar in Yerevan organized by the ruling Republican Party of Armenia (HHK) and the European People's Party. "It is not possible to form a civil society without the middle class," he said afterward.

"Together with you we should form institutions that have to protect private property in the first instance, and that means protecting the interests of the middle class," Sarkisian said. "Because the poor and the rich do not need institutions that would protect their property as much as the middle class does."

"The middle class thus becomes a reliable backbone of civil society," he added.

Sarkisian has pledged to implement political and economic reforms throughout his three-year tenure. Speaking at the European Parliament in Brussels last month, he said the government intends to speed up such reforms.

Government critics dismiss the prime minister's reform discourse, saying it has still not been backed up by concrete action.

Hrant Bagratian, a former prime minister affiliated with the opposition Armenian National Congress (HAK), brushed aside Sarkisian's latest statements on April 27. He claimed the government's economic policies have mainly favored a handful of wealthy entrepreneurs.

"The country has gradually become a bourgeois state catering to 10-15 people," Bagratian told RFE/RL. "Show me a representative of the 500,000-strong peasantry in the parliament. There aren't any."

Bagratian also deplored what he called a lack of government support for small and medium-sized enterprises. He said only a tiny proportion of external assistance received by Yerevan in recent years has been channeled into such businesses.

Meanwhile, gasoline prices in Armenia have risen by an additional 5 percent since April 26, adding to the already strong inflationary pressures on the economy.

Gas stations across Yerevan sold gasoline for between 450 and 500 drams
($1.2-$1.35) per liter on April 27, a roughly 20 percent increase from late-December prices.

Armenian fuel importers blame the price hike on a surge in international oil prices noticeable in recent months.

Mushegh Elchian, the chief executive of the Flash company, one of Armenia's leading fuel importers and retailers, predicted the latest hike in an interview with RFE/RL last week. He said Flash and other major importers have purchased new, more expensive batches of fuel that will reach the country within days.

Ashot Salazarian, the executive director of CPS, another major player in the local fuel market, said they have no choice but to adjust their retail prices accordingly.

The State Commission on the Protection of Economic Competition said it is closely monitoring the situation. Its deputy chairman, Pavel Ghaltakhchian, urged Flash, CPS, and other fuel companies to "restrain their appetites."

Fuel imports are a lucrative economic activity in Armenia, which is effectively controlled by a handful of wealthy, government-linked entrepreneurs.

The rising gas prices could complicate authorities' efforts to curb inflation, which reached an annual rate of 11.5 percent in March. The consumer price index has been mainly pushed up by food prices up to now.