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The Simple Secret of Strong Economy

Charity is Not Investment: Foreword

“They came to Armenia to make money”. Let’s agree, this phrase usually has a strong negative connotation for many of us, post-Soviet people. Years ago, I tried to explain to a well-educated person that Amulsar brings investments of several hundred million dollars. In response, I got an absolutely “serious” counter argument: “They don’t invest that money for nothing, they want to make money”. Well… yes! And that is the core concept of investment. Money invested “for nothing” is called charity. Are there many countries in the world whose economic success is based on charity? I am not aware of any.

During one of the Amulsar project Public Hearings community members said, they were waiting for the jobs created by the project. Young activists who were present at the hearings confronted them by stating that it is the state that must create jobs. Do we need to explain to even the young generation that states don’t create jobs? Jobs are created by profitable businesses. Of course, there are state created jobs, but to be able to create jobs, states need to have money by taxing profitable businesses.

“You can't have a healthy society unless you have healthy companies that are making a profit, that are employing people and that are growing”. This is not me. It’s Michael Porter, a world-famous economist and a Harvard professor.

The fundaments of strong economy are investments- local and foreign. When those inside the country and foreign investors are convinced that they can create added value in this country, they can invest and make profit. There is nothing shameful in the pursuit of profit. It is shameful to convince a society that hasn’t yet fully grasped the idea of free economy, that a country can survive on charity and agricultural festivals. Countries prosper only if there are investments that pursue and generate profit. A large-scale investment creates other small and medium enterprises and this is the formula that keeps away 1, 10 or 100 Armenians from seeking a job in Siberia. The more investments that seek profit, the less out-migration. So far, despite the growing number of different agricultural festivals each year, the out-migration doesn’t slow down. This is the reality. The rest is an illusion.

Why Mining

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