The ins and outs of the government’s plan to jumpstart economic activity and growth
The National Assembly of Armenia has approved the government’s programme for the next five years. Two opposition forces of parliament did not support the programme.
Armenian Prime Minister Nikol Pashinyan says his government’s programme should lead to a ‘revolution in the economy’.
Discussion of the 70-page document lasted for three days, and only 50 of the 132 members of parliament registered to ask Pashinyan questions about the programme.
JAMnews presents a brief overview of the programme, as well as of what was spoken by those for and against it.
The government plans to completely eliminate extreme poverty, and substantially reduce the level of poverty in the country as a whole, by 2023.
Average economic growth is forecast at a rate of at least 5% annually.
The focus will be on the country’s model of economic growth and creating conditions for new players to appear on the market, which should in turn lead to an increase in exports and the emergence of new jobs.
The plan has set an ambitious goal of increasing exports to 43-45% of GDP by 2024.
Micro businesses will also be exempt from taxes [ed. Businesses whose annual turnover does not exceed 24 million AMD, approximately $50,000].
As for energy, solar energy has been marked to contribute to 10% of the country’s consumption by 2022.
Raising salaries in the public sectors, in addition to pensions and benefits, was also mentioned.
As concerns Karabakh, the document touches on Pashinyan’s proposal that representatives of Nagorno-Karabakh (NK) be brought back to the negotiating table. The PM said that he çould not speak on behalf of the residents of NK since they did not elect him.
The international recognition of the Armenian Genocide is also among the priorities of the government.
The government also mentions deepening cooperation with Russia and other countries of the Eurasian Economic Union and the Collective Security Treaty Organization.
Furthering relations with the European Union, the United States, Iran, China and Georgia is also on the agenda.
Much of the government’s programme is dedicated to defence issues and the need to purchase new types of weapons – multi-functional aircraft and modern air defense systems.
The government will continue the fight against corruption. Pashinyan also spoke of a need to create a body for the institutional fight against corruption.
“In the near future, we need to liberate our homeland from the latest bacilli of criminal oligarchic and corrupt government,” the prime minister said.
The government will continue to work to return money stolen from the state treasury and return illegally exported capital to Armenia.
Opinions on the state programme
The government programme caused heated debate in parliament, society and among experts.
The head of the Prosperous Armenia opposition party and oligarch Gagik Tsarukyan said that he does not consider the government’s programme revolutionary:
“I don’t [deny that] there are two or three provisions through which people will feel positive changes, but this is not a programme of economic revolution.”
Another parliamentary opposition force, the Bright Armenia party, said that the government’s programme was “abstract”.
Party member Gevorg Gorgisyan says the main problem of the programme is the lack of specific deadlines and comparable indicators:
“I was just looking for numbers. I looked at what deadlines were set. Throughout the 69-page programme, there were only 12 such numbers. Of course, this is not enough, because the programme should be a roadmap of where we are going, for what reason and how.”
One My Step MP, the head of the permanent commission of the National Assembly for Economic Affairs, Babken Tunyan, agreed with the fact that the document is not concrete enough and lacks numbers:
“I agree that there are few numbers, but perhaps there is no specific standard of how many should be in a government programme. I would like to have more numerical goals, but the goals in the programme are key. For example, the minimum 5% annual GDP growth and the share of exports are very important indicators. In five years, the public will judge whether we were able to fulfill the tasks set before us or not.”
The head of the Employers’ Union of Armenia, Gagik Makaryan, considers the programme “luxurious”:
“I personally like the fact that emphasis was placed on the modernization of existing enterprises, and not just the creation of new ones. Tools for this are provided, including tax breaks and financial affordability, for which the Central Bank and the government will take the necessary measures.”
However, Makaryan says there is a “fly in the ointment”:
“The programme is very ambitious, with numerous wishes and goals. It can be a challenge for the state apparatus, which may not be able to implement it. The prime minister, being a maximalist, may have tried as much as possible to include the need for good steps in the programme, but his team is not ready for them.”
Makaryan says this will lead either to serious changes in the composition of the government in the coming months, or to subsequent negative phenomena, including a decline in public confidence.
The PM’s conclusion
PM Pashinyan has assessed the three-day discussions of his government’s programme as effective and successful. In his closing speech, Pashinyan repeated that this was the beginning of an economic revolution:
“Today, I begin my second march – now towards economic revolution and victory [ed. The Velvet Revolution in 2018, led by Pashinyan, began with a march from Gyumri to the capital. The demonstration was held under the slogan “My Step”]. And whoever wants to make a step, let him make his move. Anyone who wants to go this way, let them walk with me, because we are moving towards a free, happy Armenia.
“Yes, this economic revolution must win. And win it will. Let no one doubt. Keep all your pessimistic predictions [to yourself], because this is the old logic [that things will get] worse and worse. No, things will get better and better. But for this, everyone must carry this idea [in their minds].”