Hrant Bagratyan gives incorrect information on indexes for 2019

Former Prime Minister, economist Hrant Bagratyan wrote a post on his Facebook page on January 26, referring to Armenia’s results in a number of indexes in 2019.

In particular, referring to the Doing Business 2020 report, Hrant Bagratyan noted that Armenia has regressed according to the index composed of 12 indicators.

“DB 2020 was published in October 2019. Armenia ranks 47th, having lost 6 points in the ranking compared to 2018. And although during the government meeting the CB chairman said that there was a mistake, we will correct it, nothing was corrected. The 47th place is one of the worst indicators in the economic history of the Republic of Armenia (once it was 48th and in 2017 – 47th). We ranked 32th, 34th, 35^th, and so on. It should be noted that in 2019 Georgia ranked 7th, Azerbaijan 34th and Russia 28th” Bagratyan wrote.

The Fact Investigation Platform decided to study the indicators reported by Hrant Bagratyan and find out whether the data presented by him are true or not.

Doing business

Doing Business is the annual report of the World Bank Research Group. It has been published since 2003 and covers 190 countries, assessing the regulatory environment of doing business in those countries. The rating is based on 10 indicators: starting a business, dealing with construction permits, registering property, getting electricity, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency. The DB 2020 methodology states that contracting with the government and employing workers are reviewed but not included in the list of indicators that constitute the index.

Studying the reports from previous years, we can see that in recent years Armenia has had the worst performance in 2011 and 2012, ranking 48th and 55th, respectively.

It should be noted that in 2015-2017 the methodology of reporting has changed. However, since then the recalculation has been carried out annually only for the preceding report to ensure that the new calculation is accurate, i.e. the figures for 2003-2015 have remained unchanged.

Doing Business Report: Armenia’s indicators in 2008-2020

Thus, in consideration of the recent years Armenia has had the lowest ranking in the index in 2011 and 2012, and Hrant Bagratyan misrepresented the methodology, as not 12 but 10 indicators are considered when preparing the tables.

Democracy index

Hrant Bagratyan also referred to Armenia’s indicators in the 2019 report of The Economist Intelligence Unit British Research and Consulting Company.

“According to the Democracy Index, Armenia has made serious progress, moving from the 111th place in 2017 to the 86th place. The December 2018 parliamentary elections were crucial here. So far, the persecution of the President of the Constitutional Court, the mandatory pre-trial detention of people, the openly biased stances of the courts have not been reflected there” Bagratyan wrote.

The Democracy Index is based on five criteria: electoral process and pluralism, civil liberties, the functioning of government, political participation, and political culture. It should be noted that according to the report, the countries are divided into four groups: full democracy, flawed democracy, hybrid regime and authoritarian regime. Armenia ranks 86th and is among the hybrid regimes.

It is noteworthy that the report released in January summarized the events of 2019 only. In 2018, Armenia ranked 103rd in this report, and it is surprising why the former Prime Minister did not mention the 2018 report. Hence, Bagratyan’s assertion that the “persecution of the President of the Constitutional Court, mandatory pre-trial detention, explicit bias of the courts” was not taken into account when submitting the report misleads and manipulates the reader.

Corruption Perceptions Index

Referring to the Corruption Perceptions Index, Hrant Bagratyan notes that progress has been made in this regard, and Armenia has moved from 107th to 77th place in 2 years.

“Well, we ranked 94th to 95th in 2013-2015. Undoubtedly, serious progress has been made in the tax and customs sectors. But Transparency International has also played a role, “concealing” the pocketing of budget funds from its parent companies in the form of unlimited bonuses. The opening of funds by the first lady of the country was not reported, and so on. After all, Transparency International’s local office currently has deputies in parliament, and “collaborates” with the RA budget. That is to say, it is a beneficiary, and, therefore, is not unbiased. But what’s interesting? After all, Armenia is in the 77th place. Despite the “progress”, the country is among the corrupt countries in the world”, Hrant Bagratyan wrote.

It is noteworthy that after Bagratyan’s post Varuzhan Hoktanyan, Coordinator of Transparency International Anti-Corruption Center, denied the fact that their organization has misrepresented or concealed information about corruption in Armenia. Hoktanyan emphasized that based on the principles of scientific ethics and impartiality, the international organization never receives information from their representatives of any country.

The study of Transparency International’s methodology makes it clear that the calculations of the Corruption Perceptions Index take into account data from international organizations, not local offices.

The World Economic Forum, Freedom House, Political and Economic Risk Consulting, Economist Intelligence Unit and other organizations are the sources for the Corruption Perceptions Index.  Data from at least three organizations is used. Each time the methodology is presented in a separate chapter in the report for that year.

Given this fact, we can argue that Hrant Bagratyan is wrong as the international office of Transparency International does not rely on data provided by local offices when compiling the Corruption Perceptions Index.

Thus, Hrant Bagratyan’s January 26th post contains a number of errors and misleading theses.

Lusine Voskanyan