Armenia: The Challenges of Growth
Armenia: The Challenges of Growth


by John Hughes

In contrast to societies in which companies spend millions on public-relation ploys to attract media attention, business practice in Armenia remains an insular, guarded realm, in which corporate heads discourage attention rather than solicit it. Efforts to profile businesses for this series of articles were a reminder that even successful businessmen would rather turn off the spotlight than be found in it.

Reluctance to discuss finances or taxes or inside trade secrets is surely not peculiar to Armenia. Here, though, presumably harmless questions from a reporter are met with resistance, suspicion and often outright rudeness. Consistent with the situation in politics or virtually any other area, trust between media and the business world is a phenomenon still waiting to happen in Armenia.

Two attempts (of many) to get information illustrate the dysfunctional relationship:

AGBU correspondents wished to profile one very successful toy company, as a positive indication that a "home-grown" industry can thrive in Armenia.

A reporter's questions were frequently met with a question from the owner: "Why do you want to know that?" or "I wouldn't ask you such a question, so why are you asking me?"

The hesitant owner refused to be photographed, and when asked if we could take pictures inside his store, he agreed only after stipulating that no price tags be shown.

In another case, an owner of a chain of grocery stores would not tell how many employees his company had, calling the information a "trade secret." Yet another grocery-store entrepreneur bristled when asked how many stores his chain had. "Why do you need to know that?" he asked. "It isn't necessary for your article."

Two views of media dominate here, and are explicit when applied to attempted business journalism: 1. The press is propaganda. 2. The press is scandal. Rarely are articles seen objectively as simply the exchange of information. (In recent months, a new business newspaper appeared in Yerevan. There are no bylines or statement of ownership, and it is believed that articles appearing there have been paid for by companies profiled in the publication—a common practice, too, in mainstream print.)

If information is indeed power, businessmen seem more concerned that it could be used against them, rather than as a means of promotion. In the recent past, when tax authorities were more bullies than public servants, the businessmen's shyness may have had legitimate grounds. (It has only been within the past decade that shops here have been required to record sales via cash register. Previously, transactions were hand-scribbled into notebooks easily altered according to the needs of either the taxman or the businessman. And just within the past four years, a law was enacted requiring shop attendants to wear badges identifying them as registered employees.)

American Robert Evans, country director for the International Research and Exchanges Board (IREX), straddles the line between business and media. In Armenia, he leads United States Agency for International Development-funded projects aimed at enabling newspapers, radio and television to become profitable. Evans says that, while regrettable, the reluctance of Armenian businessmen to engage with media is understandable.

"Normally (in other societies) a business is overjoyed to have its product, location or management featured in the press. However, in Armenia, this only brings unwelcome attention from the tax authorities," Evans says. "Successful businesses that are not connected to the power base de-jour must fly under the radar to avoid harassment and outright extortion."

Evans says that, during his three years in Armenia, he has encountered businesses that won't buy advertising, for fear of being seen as too successful.

Himself a businessman who has worked in Georgia, Ukraine and Russia, he has close knowledge of why some companies would rather go unnoticed.

"When I was running a national television network in Ukraine some years ago, I was visited by gentlemen wearing floor-length leather coats who identified themselves as members of the security service," Evans recalls. "They demanded my client list and because I refused, my business was subjected to 22 audits the following year and at least 10 safety inspections. We have many similar examples of Armenian businesspeople who have faced unbelievable pressure. Not only does this damage the media business, but it also stunts the growth of those businesses that would otherwise advertise and subsequently grow their businesses."

Rare exceptions to the secrecy norm will say that anyone who properly pays taxes should not fear exposure. It may be, then, that holding out on the media is simply an engrained holdover from 70 years in a society in which everybody had reason to be tight-lipped.

Gevorg Altunian, an award-winning political analyst at Armenia TV, says that the business environment in Armenia is a legacy of the Soviet system when people were scared of any kind of publicity.

"I am sure that, in many cases, a businessman himself does not know why he refuses to talk," Altunian says. "It is not that a businessman is scared that the information he makes public will attract the tax agents. I think they just do not tell the truth, as a precaution."

Anna Baghdasarian, executive director of the Economic Journalists Club, says that while there are signs of a more modern approach among some entrepreneurs, many still fail to take advantage of a relationship with the media.

"Sometimes business people avoid contacts with the media or present incomplete information about their companies because they work with certain illegal methods and do not want to draw the authorities' attention. But it is also because they lack professionalism and experience," she says.

Information for this article was reported by Julia Hakobyan and Suren Musayelyan.

Originally published in the November 2007 ​issue of AGBU Magazine. Archived content may appear distorted on your screen. end character

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