Wednesday, 26 September

Armenian Government Cries ‘Poverty’, but Has the Money to Compensate Russian Railways



When Armenian government officials argue that they don’t have sufficient funds to increase pensions, subsidies and wages, just how truthful are they?

Recently, Armenia’s Minister of Finance Gagik Khachatryan told parliament that any increase in the minimum wage was out of the question in the short-term.

His argument was the same – “We don’t have the money.”

When the government somehow finds the funds to lighten the socio-economic burden of large swaths of the population, pensions and other allowances are raised a paltry few dollars.

Funds to pay the pensions of rank and file military personnel and their family members have been cut. In 2014, 990.6 million AMD (US$2 million) was allocated. In 2015, 766.6 million was allocated and next year the number is around 655 million.

Instead, the Armenian government has found the money to compensate Russian Railways JSC (owned by the Russian government) for losses incurred by its subsidiary South Caucasus Railways (SCR). Armenia’s 2016 budget envisages paying Russian Railways 349.9 million AMD in compensation. This will be the sixth year of such compensation for losses incurred by SCR within Armenia for passenger transit.

Armenian MP Edmon Maroukyan believes some of the losses can be attributed to poor management at SCR. The Armenian government, however, seems reluctant to annoy the Russian company and continues to pay compensation.

Funds to assist the unemployed to find work elsewhere have also been slashed. In 2016, 58.7 million AMD will be allocated to this program, down from 77.8 million in 2015.

Funds for a work training/support program for the physically disabled unemployed will also drop from 20 million last year to 18.6 million in 2016.

Meanwhile, the government is increasing funds for various consultative service programs whose results are more than dubious. This is especially true when it comes to funding a program offering advice in the rural regions of Armenia.

In 2014, 346.4 million AMD was allocated such programs. In 2015, 395.7 million was allocated. In 2016, 397.3 million will be allocated.

There are no objective studies as to how rural residents have benefited from these programs; if at all.

Has the advice provided helped rural residents to solve the issues of hailstorm damage to their crops, the shortage of farm equipment, or the low quality of chemical fertilizers?

Diesel fuel subsidies for farmers will also be cut from 1.260 billion AMD this year to 330 million next year.

In 2016, according to the draft budget, some 123 million AMD ($255,000) will be allocated to conduct studies designed to gauge public opinion on just how good, or poor, of a job the government is doing. Studies will also look into quality of life issues and the needs of communities.

Funds to pursue similar aims were allocated in the past as well.  In a government funded poll conducted by the IPSC (Institute for Political and Sociological Consulting) in Shirak Province this September, 59.4% of respondents said that unemployment was their biggest problem. 12.6% cited emigration and 11%, poverty.

The government has invested large amounts of taxpayer money to conduct such studies. But, to what avail?

When asked who is ultimately responsible for solving the problems facing Armenia, 53.7% of the respondents in Shirak said it was the government.

Is this a case of misplaced expectations?


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Comments (1)
1. Թորոս01:34 - 19 November, 2015
սա ինչ է, եթե ոչ Ռուսաստանի կողմից Հայաստանի ստրկացում և գաղութացում, պարոնայք ռուսամոլագարներ?
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