This is a forcible dismantling of Gagik Tsarukyan’s business: It is a highly vulnerable process that will have serious consequences: economist

By a decision of the Anti-Corruption Court, based on a motion filed by the Prosecutor General’s Office, Ararat Cement has been transferred to the administration of the Republic of Armenia, represented by the Ministry of Economy.

According to economist Hrant Mikaelyan, this is neither the first nor the second case of property seizure.

“We can recall the transfer of the Tsaghkadzor hotel to temporary state management in 2018, followed by the nationalization of a 20% stake in the Zangezur Copper-Molybdenum Combine, the Electric Networks of Armenia (ENA), and now Ararat Cement. These are at least four major cases, not to mention a number of smaller ones. There is also talk of taking over all of Gagik Tsarukyan’s property, including funds in his bank accounts and other factories. Those that are not being taken over are being shut down. For example, the casino was closed, as was Arinj Mall. In other words, this is a forcible dismantling of Gagik Tsarukyan’s business,” Mikaelyan said in an interview with Aysor.am.

Asked about the potential economic consequences, Mikaelyan said the immediate effect would be that these enterprises would cease operating.

“The economic consequence is that these facilities will stop functioning, and that will inevitably have repercussions. Although I have always opposed the operation of casinos, even if the state decides that such a facility should be closed, the business owner is normally given sufficient time to prepare, especially in the case of a large casino. What we are seeing here is a very serious blow to the market economy,” he said.

According to the economist, the objective of these actions is not nationalization.

“Nationalization is generally a policy aimed at bringing certain sectors under state control. As a rule, it concerns strategic industries,” he noted. 

Mikaelyan said the current process is highly vulnerable and could have severe consequences.

“If the authorities try to privatize these assets, no one will buy them at market value because investors know that if the government changes, Gagik Tsarukyan could reclaim everything. Who would want to take such a risk? In addition, Armenia’s investment climate will effectively fall to zero. The recently published Chandler Good Government Index ranked Armenia 64th out of 133 countries in terms of governance quality. The country’s weakest performance was in two categories: strategic leadership and the market environment for investment. In other words, we risk ending up with an investment environment that is even worse than the current one,” he said.