 armenia warned to end oligopoly  armenia will not reach a higher level of development unless its leadership changes the oligopolistic structure of the national economy bolsters the rule of law and shows zero tolerance of corruption the world bank s managing director warned over the weekend i think you can only go so far with this economic model ngozi okonjoiweala told a news conference in yerevan armenia is a lower middleincome country if it wants to become a highincome or upper middleincome country it can not do so with this kind of economic structure that is clear the unusually blunt message came on the second day of okonjoiweala s visit to armenia during which she met with prime minister tigran sarkisian and local business and civil society representatives and toured several rural communities to inspect the implementation of infrastructure projects financed by the world bank she also had a lunch meeting with president serzh sarkisian on sunday the armenian authorities efforts to mitigate the effects of the global financial crisis on the country was the main focus of the talks okonjoiweala reaffirmed the world bank s strong support for their anticrisis measures which has translated into the disbursement of over 200 million in various lowinterest loans so far this year but she also stressed that the recession has exposed some vulnerabilities of the armenian economy that need to be urgently addressed looking to the future it is very clear that if armenia is to come out of the crisis well and grow in the future it has to confront some central challenges said okonjoiweala it has to confront a challenge of competition the economy needs to open up to more competition you strongly have to work to make sure that the economy is not captured by oligopolistic structures she added apparently alluding to a widely held belief that many forms of largescale and lucrative economic activity in armenia have been effectively monopolized by a small number of wealthy individuals and their government patrons okonjoiweala also called for a sweeping reform of tax and customs administration the creation of a strong and independent judicial system as well as a tough fight against government corruption you have to fight corruption very strongly if this economy is to have a chance to grow in the future she stated the armenian authorities claim to have stepped up their anticorruption efforts in recent years adopting various antigraft programs and forming special bodies tasked with their implementation however antidraft watchdogs and other civic group see no significant decrease in the scale of corrupt practices among various state officials in particular the armenian affiliate of the berlinbased transparency international believes that the country s rulers are inherently disinterested in combating graft because they themselves have extensive business interests and are heavily reliant on the political backing of oligarchs enjoying privileged government treatment indeed many government lawenforcement and other officials in armenia own lucrative businesses both directly and through their cronies and or share in the profits of other firms sponsored by them when asked to comment on the perception that the armenian leadership has a vested interest in preserving the existing economic system okonjoiweala said i think this is a question that the armenian people will also have to work on and decide for themselves but obviously it will be in the selfinterests of everyone in the country both policymakers and citizens if more competition is introduced the number two figure in the world bank leadership suggested that prime minister sarkisian is strongly wishing to move on reforms i think he fully realizes that these challenges are there and that if they are not tackled it will be an impediment for the economy she said sarkisian s commitment to reform is also acknowledged by local commentators however few of them think that the former governor of the armenian central bank has the political clout and power to effect the kind of changes that are sought by the world bank a statement issued by the armenian government after sarkisian s meeting with okonjoiweala on saturday said the premier briefed her on the course of ongoing reforms that are primarily aimed at improving tax and customs administration he said she success of those reforms would significantly improve country s business environment and expressed readiness to engage foreign experts in their implementation the statement said you can deal with the technical issues but what you need is a political will to say look we are going to have zero tolerance of corruption in these areas okonjoiweala told journalists the next day so we hope the prime minister will get support and i hope to meet with the president and that there will be support for this zero tolerance tigran sarkisian declared tax reform a top priority shortly after being appointed prime minister in april 2008 he swiftly managed to reduce with president sarkisian s assistance bribery and favoritism within armenia s notoriously corrupt customs service however some local entrepreneurs now say that corruption among customs officials which is greatly facilitated by their discretionary power to determine the market value of imported goods has been on the rise this year the customs may now be even more corrupt than it was under former president robert kocharian one importer alleged recently the businessman who did not want to be identified told rfe rl that local firms importing goods can easily contact intermediary firms that can help them pay less import duties in return for a cash payment those firms have close ties with the leadership of the state revenue committee src he claimed only one armenian businessman has made such allegations publicly to date gagik hakobian one of the owners of the royal armenia coffee packaging company claimed in 2004 to have been offered to engage in a fraud scam with senior customs officials including gagik khachatrian the current src chief hakobian was subsequently arrested and sentenced to six years in prison on controversial fraud charges  