Friday, May 25, 2007

Letter 23 Buying a cement truckload in Armenia

Wednesday, May 16, 2007

Thank God the parliamentary elections went relatively well (better than the last election, improving like everything else in Armenia)… Thank God there is no war going on here… We still have quite a few problems to deal with though.

This morning, my neighbour Vartkes asked me how much I paid for a truckload of cement I bought directly from the factory last week. When I told him I paid 37000 drams per ton + 26000 for the transport, his reaction was: ‘Aynkan tangatsel e’ (It has gone up so much)! And he proceeded to blame ‘Doddy Gago’ for jacking-up the price after he bought the factory. (Doddy Gago is one of those oligarchs who made a quick buck buying-up everything when the Soviet Union collapsed. He is now reputed to be ‘Godfather’ to thousands of local Armenians.)

On May 10, I took 300,000 drams cash (about 1000 US$) out of the bank and rode with two young men in an old ‘Zil’ Soviet truck to the town of Ararat, normally a one hour trip across the Nakhichevan range west of Yeghegnadzor. The town of Ararat, in the Ararat valley, is 20 kilometres east of Khor Virap (the place where Srb Grigor Lousavorij was held prisoner in the third and fourth centuries). Ararat was an industrial city in Soviet times, but now most factories are closed, except for a large cement factory, which now operates 24 hours per day and is fueling the construction boom in Armenia. A Canadian-owned gold mine and a stone cutting facility are two other operating plants I know of.

In 2003, when we first started building our house, we paid 2000 drams for a 50 kilogram bag of cement. Now the price has risen to 2300 drams per bag in the local stores. This time, I went to buy the cement directly from the factory in Ararat basically to help a young man, Arman, who wanted to earn some income selling the extra cement we would bring in his truckload. I thought I would learn something in the process. I did.

When we started climbing the Nakhichevan range towards the ‘Toukh Manouk’ pass, the driver, noticed that the motor was heating-up, so we stopped and added water to the radiator. Ten minutes later we did the same thing. It was obvious the old radiator had sprung a leak. I suggested we return to Yeghegnadzor, reasoning that if we were having problems with an empty truck, how would we manage with a full load? But both Arman and the driver insisted they could fix it. So we stopped in a restaurant by the road and bought another packet of cigarettes and some ‘Karmir Pipar’ (red pepper). The driver ground the tobacco with his fingers, added the karmir pipar to it, and then put this mixture into the radiator and off we went again. Needless to say, an altitude of 1800 metres was too much even for that miraculous concoction, and by the time we got to ‘Zangakatoun’ (birth-town of our famous poet ‘Barouyr Sevak’, also where his ‘house-museum’ is located), the motor heated-up again. The rest of the way, we stopped every ten minutes to refill the radiator with whatever water we could find.

By the time we made it to Ararat, it was half-past noon. First, we lined-up with other trucks to pay for the cement. The ‘treasurer-cashier,’ a lady in her mid-thirties, asked us where we were taking the cement. We said to Yeghegnadzor. She then asked whether it was for our own use or for sale by a registered company. When we said it was for our own use, but that we intended to make some money on selling part of the load, she replied: “You therefore don’t need an official cash-register receipt. I will only give you a special voucher which will allow you to load the 8 tons you paid for and ask you to bring me back the voucher on the way out.” I quickly realized what was going on” “But how will we show the owner of the house how much we paid for the cement?” I said. She replied: “You are bringing him the cement aren’t you?” When I insisted that we would still need to show him how much we paid, we reluctantly got an official cash-register receipt for the full amount of 296000 drams and proceeded to the factory to load the cement. As if this was not enough, while loading the cement, the manager there approached us and offered to load an additional ton for 20,000 drams cash (under the table).

So I decided to recount this story to Vartkes, explaining to him that if the price of cement went up, it was because these crooked employees were robbing us all. He nodded in agreement: “We always blame the king, but how could the king be good if his people are so rotten!” he said.

This conversation reminded me of how shocked I was on my first visit to Armenia, in the summer of 2002, when a worker on lake Sevan had made this fortuitous assertion: ‘Hayu misht gogh e yeghel, Hayu chi gara ch’goghanal.’ I also remembered the approach to combat corruption in Armenia advocated by Tom Samuelian: Start with the judicial system, offer the judges a proper salary so they do not need to take bribes.

Were these cement-factory workers paid properly or were they just greedy?

Sheila often recounts what our friend Gegham told us in Canada before our first trip to Armenia. Gegham said that when he was driving in Armenia (indeed the Soviet Union), he always had a small banknote in with his driver’s license. Whenever he was stopped by a policeman, and he presented the driver’s license, he got it back minus the banknote. He would then tuck another banknote with the license in preparation for the next time he was stopped. He explained: “You people think this is a bribe, but to us, we know this policeman is not paid enough to feed his family, and we can afford a car, so think of it as an extra tax.” Well if this policeman was able to supplement his salary this way, how would his chief of police who does not have direct contact with the driving public? We learned that to be hired as a policeman one had to pay a small fortune to the chief of police, usually borrowing it and paying it back by stopping as many drivers as possible. Wait a minute! How is that different from the corrupt tax-collectors of Ottoman times who bought their function?

Take for another example the school teachers. Everyone knows that in 2002 their monthly salary was 12000 drams (approximately 25 USD$). No one expected them to live on that. So it was natural that they would work overtime to supplement their income. They gave private lessons after hours. Now this is perfectly normal and honest. But what if the teacher came and suggested to the parent: ‘Your child may not pass the grade unless he got private lessons’, or ‘your child will not get good enough grades to enter university unless he got private lessons’… What if the child actually never got the private lessons, only the good grades?… What if the school principal only hired school teachers who paid him?...

In June 2003 when I left Armenia for the first time, I had bought four carpets to take home. I knew that they had to be accompanied by certificates from the Ministry Of Culture stating that they were not cultural heirlooms, so I had these ready with me. Sure enough a customs official approached me and asked for the certificates. He examined them and then pointed to the photograph of one particular carpet and said: where is the yellow sheet that goes with this certificate. I had left it at home. Without that extra yellow sheet, you have to pay taxes, he said. Since friends had accompanied us to the airport, I decided to leave the carpet with them and wait until my next trip to bring out the carpet with the proper documentation which, I knew, was in our house in Yeghegnadzor. I told the official that I had been working in Armenia for the past year as a ‘volunteer’ trying to promote exports, and I thought that what he was doing was counter-productive as he was, in fact, discouraging exports. He replied, without any irony in his voice: “Did you say you worked as a ‘volunteer’? Does this mean you worked for no pay”? I said yes. Well, he said, then I am also working here as a volunteer because I have not been paid for 6 months.”

Needless to say things, have improved since then (in fact, every time I return to Armenia I notice things that have improved): The teachers’ salaries have now gone up to 60,000 drams per month (about 170 USD). A Presidential decree in 2003 abolished any luggage inspection for customs purposes upon exit (in fact I have never had my luggage checked since on entry or exit). This year when I returned in March, the Militia (police) stations on the highways, at the entrance to Yerevan, had disappeared. (I am told they were replaced by automatic cameras). I know judges’ salaries have been raised. So while it looks as if the public service is being cleaned-up, I frankly never expected that the ‘private sector’ would still be so corrupt.

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