Armenia's five-year plan

David Stepanyan, Yerevan. Exclusively to VK

The National Council of Armenia adopted a five-year program of the new government for 2012-2017. It is another mechanism which caused disagreements between the Armenian society and parliament. The program enjoys avid support of PMs from the ruling Republican Party of Armenia and its adjunct, Orinats Erkir. Prosperous Armenia, Heritage, Dashnaktsyutun and the Armenian National Congress voted against it.

The program requires at least double increase of minimum salary, decrease of the poverty level by 5% and establishing of more than 100 thousand new working places. According to the head of the government Tigran Sarkisyan, the program encourages the birth rate, establishment of competitive conditions for economy facilities, improvement of business sphere and elimination of social polarization. According to the Republicans, the government plans to shift from the strategy of economic growth to the strategy of economic development. The authorities seem to understand that economic growth cannot solve Armenia’s problems without relying on new segments, types of activity, enterprises producing new production and services, and competitive at the world market. Within the logics the governmental program requires decrease of corruption, providing economic growth by 7% in 2012, and implementation of social programs. The government also promised to provide at least the 140 per cent level of the index minimal salary/poverty, growth of the birth rate up to 1.8, and decrease the poverty rate by 8-10%.

All these figures and promises are positive, but it is not clear what reserves will be used for providing this growth of Armenian economy. Representatives of Prosperous Armenia, Heritage, Dashnaktsyutun, and ANC who voted against the program have already heavily criticized absence of certainty, feasibility, and presence of broad terms.

Giving an appraisal to the new program of the actually old government, we should consider the fact that Armenia failed to implement its previous five-year program. Today the government can easily promise the 7 per cent economic growth, because in 2009 the fall of the GDP surpassed 14%. Thus, the program seems to be realistic, as the presented figures are very low, so Armenia has sufficient amount of resources to fulfill the program.

However, there is a threat even for this unpretentious program – a huge number of risks which can influence directions of economic development. The most dangerous risks are high uncertainty in the world economy, vagueness of expectations and unpredictability of the situation development. The main domestic threat for Armenian economy is still development of oligopolies. These ancient institutes of autocracy are the biggest threat, because interests of their owners and interests of the society contradict to each other.

Pro-governmental activists remind that the former government was managed to save Armenia from external hard shocks which could be disastrous during the global crisis. The Republicans always state that during the crisis of 2009-2011 the government didn’t decrease spending for social programs. And the fundament of the Armenian economy – the banking segment – demonstrated stability and gained benefits. However the government’s supporters forget about the slow pace of economic diversification.

Nevertheless, citizens of Armenia still do not get the essence of the governmental program because the program has to be based on serious research, require strategy and reforms, because economy without dramatic reforming is not viable. At the same time private interests in Armenia, i.e. 20 families of oligarchs, has such great influence on the state policy that it is difficult to plan anything in the governmental program. A program aimed at interests of several clans is not a program.

That is why people treat the adopted program lightly. It doesn’t matter how ministers study independent conditions, processes, and society’s demands, if they do not correlate with powerful private interests. Without it any steps by the government are doomed to fail.