Wednesday, 19 September

The Mayor of Tumanyan Dreams of Turning His City Into a Veritable Hong Kong



Due to existing unemployment the city of Tumanyan, with some 1,900 residents, is in dire social straits. During the Soviet era 1,200 people worked in Tumanyan’s fire-resistant brick processing factory. Mostly women worked in the knitted clothing plant that employed some 200.

Levon Zavaryan, the Mayor of Tumanyan, stated, “Today, only 10-15 people are employed in the now privatized brick plant. The belongings of the clothing factory were sold-off and the building itself is in ruins.”

It appears that nothing has been done to create new job sites in Tumanyan in the past-Soviet period. Local residents are no longer able to stave off the ravishes of poverty. Tumanyan resident Martuhi Hakhverdyan says, “ I’m the only one working in a family of five. My salary at the post office is 18,000 drams per month.” When asked how she’s able to provide for her family on such a pittance she answered with a sigh, “I couldn’t even tell you...”

No one in Seta Madoyan’s family of six works. She says, “A few years back we were receiving some social benefits, but the payments were stopped. Three of the children are students. My son makes trips to Russia and back. That’s how we get by.”

Mayor Zavaryan explains that the residents of the town either travel to Yerevan or Russia to earn some money. He says, “There’s some 50-60 unemployed people in the town with degrees in higher education. 30% of the families now reside abroad. In 2007 one hundred families were receiving some type of social welfare and were just about making ends meet. By the end of the year that number dropped to 75 according to the «Paros System». (Also known as the Welfare and Social Security System of Armenia. This is a testing system, introduced in Armenia in 1994, to improve the targeting of humanitarian assistance. The targeting performance of the Paros system was evaluated using the results of the Household Budget Survey. About 71 percent of Armenian households report they were registered with Paros in the fall of 1996.)

In the opinion of Yura Zagaryan, a Tumanyan resident and former Director of the brick plant, the solution to the unemployment problem lies in the reopening of the factory. He explains, “The plant needs a new owner. The necessary renovations can be completed in just two months. Once back in operation the plant can produce not only bricks but ceramics and other items as well. The government must contribute its share to the reopening of the plant also.”

Tumanyan resident Albert Tadevosyan, the owner of the plant who privatized it in 1995-1996, says, “There’s no demand for brick or tile in today’s market. During the Soviet years, these items were used for building insulation but now they wind up in people’s fireplaces or ovens. Naturally, we produce bricks and tile according to demand. It would be great if I could produce brick that’s of better quality than that made in Italy. But that would require an investment of $ 4-5 million in new equipment.”

In any event, he believes that restarting plant operations on a large scale ultimately depends on product demand. We should note that the city of Tumanyan is surrounded by measurable quantities of natural material reserves. There’s an almost inexhaustible reserve of clay, the raw material needed for making bricks. Nor are the granite mines of the Aygehat mill field being utilized.

Mayor Zavaryan said that, “The proposals I made to President Robert Kocharyan regarding the community’s development were turned down.” The Mayor didn’t specify what those proposals were but rather voiced what his dreams for the future were. “They should turn the city of Tumanyan into a free-economic zone like Hong Kong or Singapore. Investors would be exempt from paying taxes for a few years. And there’s a cheap supply of labor. What’s the difference? Today, the government isn’t receiving anything in the way of taxes from Tumanyan anyway.”

We should note that a public meeting took place in the town on August 3, 2007 presided over by Prime Minister Serzh Sargsyan. The women folk of Tumanyan voiced their concerns to the Prime Minister regarding the difficult social conditions in which they had to raise their families and requested that he create new jobs. What becomes clear is that there are no short-term or long-term programs on the part of the Municipality to tackle the issues of employment and poverty reduction as agreed to with the State Government. The Municipality wasn’t able to provide the Prime Minister with either specific or realistic suggestions in this regard. Thus the Prime Minister didn’t make any promises to the residents about securing new employment opportunities. Seyran Shahverdyan, a Tumanyan Council Member, summed up the meeting this way, “Everyone voiced their own personal pain, but our overall pain wasn’t judged.”

The social state of the residents of Tumanyan also reflects the budget of the community. As of January 18th the Municipality hadn’t finalized a budget for 2008 although the statutes of the ROA regarding “Budgetary Procedures” state that the Municipal Council, representing the administration of the community, can adopt a budget even up until the time that the State adopts its own budget. Once the State does so the Municipality has two weeks to make any necessary corrections to its own.

Levon Zavaryan argued that, “We can’t discuss the overall 2008 budget until we take up the matter of local taxes, adding that, the total Municipal Budget is half of an ordinary school's budget...like we even have a budget.»

Council Member Anahit Ramazyan also complained about the scope of the budget. “We can’t achieve anything with this budget.” In the amended Municipality’s budget of 2007 revenues and State transfers were projected to be 19.5 million drams. By year’s end actual inflows amounted to 17.6 million drams. For years now there have been no new revenues from private property taxes. As a result private property tax revenues have remained unchanged. Projected property tax revenues for 2007 were set at 5.4 million drams but by year’s end only 3.5 million had been realized. Tumanyan's Municipal budget was almost exclusively insured by the 13.6 million dram credit it received from the State in 2007; in 2008 those credits are projected to amount to 16.4 million drams. Taking a look at the expense side of the budget it's apparent that Mayor Zavaryan and the Council don't place much importance to issues of expenditure prioritization, transparency, economization and publicity. Residents are basically uninformed regarding local budgetary matters. Even Levon Zavaryan, who has been Tumanyan's Mayor for 12 years now, isn't articulate when it comes to discussing budgetary facts and figures off the cuff and must seek the advice of office staffers.
 
70% of Tumanyan's budget goes to pay municipal salaries and social benefits. Amazingly, 800,000 drams of the impoverished budget is earmarked for gas payments for the Mayor's cars and 240,000 to pay his cell phone charges. Mayor Zavaryan concluded that, «The 35 million drams allocated by the Armenian Social Investment Fund (financed by the International Development Association, World Bank) is earmarked to renovate the community’s art school.» As of September 1, 2007 the Mayor inexplicably closed the school, ostensibly for the repair work to proceed, thus interrupting the education of some 30 youngsters and putting 3 teachers out of work. This, even though the Mayor himself agreed that as of January 18th repair work had not yet begun.




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