While Armenian government officials are upbeat about the draft 2011 budget, which they say is “unprecedented in several aspects” ARF-D parliamentarian Artsvik Minasyan said he was unimpressed with the government’s plans. During discussions on Monday, October 18, in the National Assembly about the 2011 budget, Minasyan said that the government lacks a serious program to ensure Armenia is able to meet its serious economic challenges.
“The current policies that the government has announced and is trying to realize in connection with softening tax administration and its risk-based tax collection policy not only have failed to be implemented, but also have resulted in a stricter tax administration not based on law but rather on the engagement of the clan-based system,” said Minasyan. “As a result, we now have a large number of small and medium-sized enterprises which have been shut down, a considerable loss of employment and emigration is looming large.”
Speaking in parliament, Prime Minister Tigran Sargsyan described the budget as having “a clear social orientation since it increases social spending to unprecedented amounts” for social welfare, health and education.
The budget unveiled by the government late last month calls for a nearly seven percent increase in its expenditures. The draft commits the government to spending a total of 998.4 billion drams ($2.8 billion), up from 935.5 billion drams projected for this year.
An economist and a lawyer by training, Mr. Minasyan said that the draft budget does not foresee any concrete policies for proposed improvements in the manufacturing and agriculture sectors. “We could not find any concrete proposal [within the budget] which would assert the objectives and financing for those sectors,” Minasyan said. “The budget does not guarantee increases in income, social benefits or pensions. The population will be less protected in 2011 than it was in 2010 or even 2009. In other words, real income will continue to see declines even though there will be an attempt to show that incomes have risen in some sectors.” However this will fundamentally be conditioned by the proposed minimum wage increases. According to the forecast budget, minimum wage would increase to 32,500 AMD monthly (approximately $90 US) from the current 30,000 AMD monthly ($83 US). “Radical steps to raise income levels to secure the basic quality of life are absent from the 2011 budget,” Minasyan noted.