Corruption

I was in a discussion meeting with a USAID (United States Agency for International Development) advisor and a group of mostly young people in Gyumri last week. The subject was corruption. The advisor listed several incidents of recent corruption in the US, starting with Rod Blancovitch, former governor of Illinois.

In Armenia people are affected by corruption from the day they are born. One young girl said that her mom told her that when she was born, she had to pay the nurses, who are salaried by the government, to care for her baby. Health care is provided by the government, but the reality is that people still have to pay for services that are supposed to be free. Doctors in Armenia are salaried at $200 a month which is difficult to live on and cannot provide the benefits to which they feel entitled. (I.e., car.) In addition they have most likely paid someone (the head hospital doctor) for the position they are in, money which they feel entitled to get back by charging patients for services that are supposed to be free. The additional amount that patients have to pay is not posted anywhere (because it is illegal), so the amounts charged to patients are inconsistent and are based on the doctor’s reputation and what he thinks the patient will pay. This is such a common practice that people do not even question it. I have heard my family discussing what they think they will have to pay for various services, and they chose the “cheap” doctor.

Teachers are also paid on the side by their students. Teachers often “pay” school directors to get their jobs. The school day is short. Teachers do not stay after school to help students, but they do tutor anyone who wants it for a price. The seventeen-year-old grandson who lives with my host family is currently paying three of his teachers for tutoring in hopes that he will get good scores on the university entrance exams in May. It is common practice for students to pay teachers for good grades. Some students at Yerevan State University posted a list of teachers and what you had to pay them for good grades last spring. It caused an uproar. University teachers are paid $200 per month as are many secondary teachers. The advisor asked those people at the discussion how they would feel about having heart surgery performed on them by a doctor who paid for his grades, and then paid for his job, so that there was no way of gauging his qualifications to do heart surgery. They were mute.

The Armenian government recently raised the salaries of police officers with the goal of reducing payoffs to the police by citizens stopped for “questionable” vehicle infractions. Everyone would acknowledge that they did not make a fair wage and these payments were the only way to make ends meet. People I talk to don’t think that this has been effective even though the government is threatening to prosecute policemen who take bribes.

The costs of doing business in Armenia are affected at all levels by corruption. The customs department has to be bribed to move imported goods into the country, the tax department can be paid off to look the other way, and people have to pay to expedite anything that the government has a hand in. Businesses keep two sets of books. Tax books for the authorities and another set of books that includes bribes paid and actual revenue, most of it paid in cash to escape the authorities who do not fairly tax businesses. Oligarchs and political friends of the government receive preferences. In Charentsavan last year a business which bottled water was shut down by the government for “tax” reasons though it was commonly known that the real reason was because the owner opposed an elected official. In Arzakhan where I lived last summer, a hot springs spa was shut down for tax reasons. The government said that the business owed $100,000 in back taxes. This was another political move. The government would not allow a successor owner to takeover the business unless the taxes were paid. The sum is ridiculous, which is obvious when you see the business, essentially an outdoors hot tub that accommodates about twenty people. But several people lost their jobs, and the community lost a minor tourist attraction. In the US an unrelated new owner would not be responsible for the debts of the prior owner and it would be in the government’s best interest to preserve the jobs and the revenue tax base.

Many businesses here hire relatives and friends who are not qualified for their jobs. Employees are not evaluated. Unrelated employees often have to pay to obtain their positions. Everything depends on who you know or who you can pay. This means that resumes have little value. Work experience is no reflection of whether or not you know what you’re doing. The work ethic is so lax that it is difficult to determine if a person is qualified for anything. Grades or a degree are not evidence of anything.

Armenia has been revising its school system over the past few years. A few years ago students were qualified for the universities after ten years of education. Then they spent four years at the university, which means that many students graduated from universities at 19 or 20 years. Medical school requires five years of higher education, so doctors graduate at 21 years. The system is now phasing in a requirement that students must attend twelve years of lower education, which is common in the European countries. Several reasons have been given for this change including a push from the European nations and the fact that students from Armenia are rarely qualified to study overseas for higher education.

Two years of military service is required for all Armenian males (though if you can stay in school until you are 28, you can get out of this requirement.) One of the volunteer’s was saying that her family was complaining because their son, who is in the military and who is paid approximately $25 per month for incidentals and cigarettes, ended up with very little at the end of the month because he had to pay commanding officers for supposed infractions.

I feel overwhelmed by the level of corruption in this country. I haven’t even touched the issue of the favouritism shown to oligarchs in this country. The last piece of news that stressed me out is that the amount of payments coming into Armenian from the Armenian Diaspora and foreign aid equalled what the oligarchs were investing outside the country in foreign real estate. They receive all these preferences and then do not reinvest in Armenia, which shows the lack of confidence they have in the Armenian economy. While corruption at the highest levels is a real problem, the fact that corruption is endemic at the lowest levels also makes the situation feel impossibly overwhelming. The USAID advisor suggested that in order to turn the ship around the young had to refuse to make the payments and participate in the corruption. But it was very obvious that they did not want to be sacrificial lambs and ruin their opportunities for jobs by doing so.