RIOT IN THE MARKET

Armenia's opposition is preparing to keep its promise about a "hot autumn" by organizing a series of rallies in various parts of the country. So far they have not managed to create a situation like the Maidan [in Kiev] or Tahrir Square [in Cairo] in Yerevan, but it would seem that Serzh Sargsyan's "close circle" is starting to get a little twitchy. In any event, Prime Minister Hovik Abrahamyan has bluntly threatened the Armenian opposition in parliament with a repeat of the events of 1 March 2008. According to the prime minister, the opposition is not interested in a constructive dialogue and frequently responds to the government's proposals not with arguments but an outburst of emotions which it wants to extend beyond parliament. One gets the impression that the opposition wants a repeat of the events of 1 March 2008, the prime minister added. And although outwardly everything was supposed to look like a call for a dialogue, it was, to be honest, impossible not to detect a threat in the prime minister's words.

At the same time, it is obvious that the Armenian authorities are also getting nervous because the opposition's protests are taking place against a background of social unrest, including a riot by small businessmen.

The dissatisfaction of local and medium-size businesses was provoked by a law "On turnover tax" adopted by the Armenian parliament. The idea seemed a very good one. From 1 October, for enterprises with a turnover of up to 58m drams (113,000 euros), turnover tax would be reduced from 3.5 to 1 per cent.  But in return businesses would have to present reports and invoices for each item of goods, otherwise they would be fined by the tax service. The idea was that this innovation would ease the "tax burden" on small businesses. But in reality, business reacted with hostility. First, workers in the merchandise markets "Malatya", "Razdan" and "Firdausi" staged protests outside the Armenian government building. One trader told journalists: "According to this law, we are entitled to a benefit of one per cent. We want this law cancelled. It's no use to us at all. The government won't give us a chance to work and now it is suffocating us. I ask someone to supply me with an item, I take it, it doesn't sell, I send it back, then the tax people see there's nothing there and fine me - how can that be fair?" Others said they are now forced to get cash registers. In the end traders demanded they be allowed to choose to either pay 1 per cent with all the paperwork, or 3.5 per cent without it. 

The prime minister was forced to meet with the disgruntled traders and he told them in no uncertain terms that the dissatisfaction of the traders was "unfounded and untimely". Abrahamyan tried to assure them that the government's aim was not to squeeze small and medium size businesses but, on the contrary, was acting in their best interests, trying to get big businesses to pay their taxes.

"We are targeting big businesses," the head of the cabinet said, and instructed the Finance Ministry to refrain from unfounded checks of small and medium size businesses. He assured them that "provocateurs" were spreading rumours about a clampdown on this sector of the economy.

However, the wave of emotions could not be curbed, and the protests spread to Gyumri where hundreds of local market traders stopped working.

There is a reason behind all this. The protests in Gyumri and Yerevan are a response to a law which was supposed to ease tax pressure on small businesses - a clear indication as to which sector of the Armenian economy is now beyond the tax and legal framework. At the same time, the Armenian authorities, against a background of an economic collapse, are forced to find new ways of replenishing the budget. It was only quite recently that this task was being solved with the help of external loans and selling off gold reserves. Today, gold and currency reserves are sold out and Armenia's credit rating is such that there is no chance of any external loans. And in this situation the attempts to "shave a little more off" local businesses were no surprise.

Moreover, it may be recalled that in May this year Prime Minister Hovik Abrahamyan, according to the media, invited 100 big businessmen to come and see him for a "chat". The next day, at a session of the government, he said Armenian businesses had until 1 July to start playing by the book, and he instructed Finance Minister Gagik Khachatryan to monitor this process. "We agreed that terms in business should be equal for all. We are giving businesses until 1 July to try to operate in a new way. After that we will be forced if necessary to apply the levers within our powers," the prime minister warned. But, apparently, local oligarchs were very quick to "agree" with the government, as shown by the "re-appointment" to the post of governor of Syunik (Zangezur) of the notorious Suren Khachatryan ("Liska"). A known recidivist whose record includes several notorious crimes. In such a situation the fate of "small and medium-size business" in Armenia was essentially predetermined. And one should not be surprised that the Armenian authorities, with their criminal dictatorship, tried to resolve everything by the same familiar methods. As bemused Yerevan observers are now saying, the director of Yerevan's gold market, Vagarsh Abrahamyan, organized a crackdown on all traders who took part in the protests. The "Chorrord Ishkha-nutyun" newspaper, quoting its own sources, said that he then decided to terminate labour contracts with those who didn't fall in line, allegedly with the aim of carrying out building work. Among other things, the paper writes, traders received the following letter from Vagarsh Abrahamyan: "We are warning you that due to construction work for our financial needs your contract will be terminated within 15 days."  In addition, according to the same report, the owner of Yerevan's gold market established new regulations for his workers: he banned them from purchasing gold ingots in banks and said that he himself was supplying gold so that dealers would have to purchase gold from him and at his prices.

"If gold traders have been able to purchase gold from banks for items of jewellery before this, then today they will have to purchase gold ingots from Vagarsh at higher prices. In the event of non-compliance the gold market owner threatened to terminate the contracts of the workers and to deprive them of their market stands," the paper pointed out.

The actions of the head of the OJSC "Vagarsh Ev Vordiner Concern" and founding director of the Yerevan Gold Market, Vagarsh Abrahamyan, are nothing more than vandalism, Stepan Aslanyan, chairman of the Armenian Union of Small Entrepreneurs, said at a press conference. "They are property holders; that doesn't mean they are slave owners. They are not slaves so that you can order them to attend a rally or not," Aslanyan stressed, urging political forces in the country to condemn and comment on what has happened.

However, one cannot expect any radical changes in Armenia.