At Whose Expense will Armenia State Revenue Increase in 2012? Economist Offers Opinion

The 2012 (state) budget has no ambition whatsoever and the government doesn’t even have a desire to show that it wants to do something, said economist, former mayor of Yerevan and current member of the opposition bloc Armenian National Congress (HAK) Vahagn Khachatryan, speaking to journalists in the Armenian capital today.

“They simply compiled a budget to show for the usual round,” he said.

This year’s budget, Khachatryan continued, plans an increase of 101 billion drams ($268.5 million USD) in revenue.

“This would seem welcoming, but looking into it further, it’s a dangerous initiative. The government didn’t begin its activities from where it should have. In the first place, the government itself should’ve assessed the potential of Armenia’s economy. Today it is an approximately 10 billion dollar GDP or around 2.8 billion dollar budget. But is it? Different international agencies say that the shadow [economy] in Armenia is 50–70%,” he said.

According to the economist, one of the “absurd” aspects of Armenia’s economy is that many importers are able to import goods 2 or 3 times cheaper than the global market rate.

“No one would do such a favor to any businessman in Armenia. They all buy goods from the market at the going rate, but simply import them at a lower price — they show lower prices so that they pay less taxes here,” he said.

On the government’s intention to increase revenue by 101 billion drams, the opposition member said: “A political decision is necessary to gather [these funds], and in making a political decision, [Armenian President] Serzh Sargsyan has to gather all the oligarch businessmen and say, ‘That’s it. From now on, we will begin to work only with invoices.’

“That is, the black market is essentially reduced; that is, the rules of the game change at once. But now the rules of the game haven’t changed, and the rules not having changed, a figure is given — 101 billion — and here a serious problem arises: this has to happen on whose account? If there’s no political decision, then this has to happen at the expense of small- and medium-sized businesses; that is, these people will once again be subject to pressure,” he said.