Friday, 21 September

The Emperor Has No Clothes



People have lost all faith in presidential directives

What was the meaning of President Sargsyan's words directed to Armenia's Central Bank President Artour Zavadyan? A villager who had taken out a loan asked me the same question.

I couldn't give the man an answer, for I too couldn't make head or tails out of the president's words.

What I can suggest, is that President Sargsyan visits the Aragatzotn village of Aragatzavan or the rural community of Nor Armavir in Armavir Marz. He just might getter a better picture of the operational activities of Armenian banks and lending institutions, and insight into the government's programs being carried out by the Ministry of Agriculture.

I am offering the president this advice since he was the one who promised to visit the villages of Armenia and see firsthand how the people are taking advantage of the directives set by the government to resolve the challenges they face.

In the rural community of Nor Armavir, there are 40 court cases involving debtors alone. This means that some forty families will have their lands, homes and farm equipment seized for non-payment.

Villagers thus stripped of their possessions will no longer stay in their villages. They will set out on the road of exile.

This is what President Sargsyan told the Central Bank director:

You yourself, Mr. Zavadyan, have often stated that when it comes to inflation, agriculture is of great significance. If it has such significance, why have you failed to focus more on the village and the financing of rural projects? I understand full well that our banks are commercial enterprises and that unwelcomed intervention in their operations can lead to very bad results. However, I believe that you can direct actively direct them towards the agricultural sector by creating the right set of conditions. This must comprise an essential component of your work."

For consecutive years, Hetq has covered the issue of agricultural loans by presenting the fate of real people. We have written how banks and other lending institutions have charges upwards of 24% and more for loans, and in the process destroying villagers and villages alike.

When we have gone to the Central Bank asking what is the basis for such high loan rates, their answer has been that the Bank cannot interfere in the operations of commercial banks.

Certain National Assembly MP's have raised the issue within the legislature. Hetq has organized round table discussions and has tried to come up with solutions with the help of specialists and professionals in the field. These efforts have proved fruitless.

Members of the ruling Republican Party have always angrily pointed out that the fault lies with the villagers; that they shouldn't take out loans if they can't pay them back.

I just wonder if President Sargsyan is aware that thousands of families in Armenia have already lost their homes and land and that thousands of others await a similar fate in the courts.

If Central Bank President Zavadyan has indeed received specific directives from on high, the #1 priority must be the immediate halt to all pending court cases and all cases pending in the Compulsory Enforcement Service (CES) leading to more property seizures from rural residents.

Simultaneously, orders must be given to inspect the operations of the banks and loan companies. The first question to be answered is how 20% loan rates, agreed to on paper, suddenly balloon to 30, 32 or even 40% over the course of the loan.

Most villagers taking out loans have no formal education. But this doesn't give banks and others the right to take advantage and get them financially indebted for life.

Hetq has covered cases when rural villagers haven't even been aware that they signed contracts making them the legal guarantors for their neighbors. Today, these uninformed villagers are having their homes seized by the banks.

Thus, when President Sargsyan says that we must assist the villagers, I can only assume that we must start with the banks and loan agencies. These are the institutions that have taken the villagers of Armenia virtual hostages. Only government intervention can free them.

On March 12, during an advisory meeting regarding the implementation of economic policy measures, President Sargsyan presented his directives in a tone more resembling a plea than an order. In fact, he should have been calling many to account long ago.

Requests to get anything done in this country, especially by government officials, fall on deaf ears.

The regime often reminds us that Armenia is in a virtual state of war with its neighbor to the east. The government uses this as a pretext for the necessity of preserving internal stability.

If this is the case than officials who do not execute the orders handed down to the, just like soldiers in the trenches, must be held accountable and disciplined.

Taxes not paid by oligarchs must be seized.

This is what average citizens should have been witnesses to – punishing the big sharks and not putting on display the little fish taking a $200 bribe.

Why is it that government officials, who embezzle state funds, are never punished? Why is it that abusers of power remain at their posts, planning ever more new violations, when the Control Chamber continues to issue startling facts about the problem?

What happened to the Ministry of Nature Protection officials who embezzled state funds? The ones who pocketed some 100 million dram during the transaction to purchase a boat? Nothing was done. They remain at their posts.

No measures were taken against officials of the same ministry who signed decrees to clear away debris along the shores of Lake Sevan.

And what about those officials at the Ministry of Health who allowed some $150,000 in tuberculosis medicines to waste away past their recommended expiration date? Again – nothing.

Who will be held accountable for the sale of iron mining licenses in the village of Svarants, right next to the multi-million dollar "Tatev Rebirth" project?

Naturally, no one will be held accountable.

No wonder that citizens of Armenia have long lost faith when it comes to believing any pronouncements emanating from the president and the government.


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