Lragir, Armenia
Dec 15 2006

ARMENIA WILL NOT DEVELOP?

Return on tax in 2007 is estimated to comprise 15 percent of the GDP,
this is the worst index in the world, `unfortunately,in 2007
corruption and black economy will not be battled, the struggle will
be inert, and the results will be trifling. This is the greatest
disadvantage of the budget,’ stated the economist Edward Aghajanov
December 15 at the National Press Club. He thinks there are paradoxes
in the budget, and the authors of the budget do not seem to be
related to the Republic of Armenia and its economy.

For instance, the estimated budget deficit is 2.3 percent of the GDP.
This is nonsense, says Edward Aghajanov and informs that France,
Germany, Italy can hardly keep the budget deficit down to 3.5
percent. For countries with a small local market like Armenia export
is the main factor of development, but in Armenia imports grow more
than exports. `In 2004 exports totaled 27.5 percent of the GDP, in
2007 it will total 20.1 percent. Armenia will not develop,’ concludes
the economist and adds that exports should constitute 60-70 percent
of the GDP.

Edward Aghajanov points to another disadvantae of the budget which
has already been adopted. If in the United States or any other
developed country expenditure on entitlement programs constitute
70-90 percent of the budget outlays, Russia has decided to have 30-40
percent, in our budget the indexes are not mentioned in the costs in
the budget account.

Edward Aghajanov says the drawbacks and nonsense in the budget are
not only the consequences of carelessness. The bills are not examined
by qualified experts before submitting to the parliament. According
to Edward Aghajanov, Hrant Bagratyan, Edward Sandoyan, Armen
Darbinyan are such experts `who are staying aloof’ and the government
is to blame that this `immense resource is overlooked.’ Edward
Aghajanov thinks the experts he mentioned will not refuse if they get
a proposal.

And if suddenly the government asks Edward Aghajanov’s opinion, he
will say that in countries like Armenia academic and university
education need not be developed, and it is better to create
scientific educational institutions and choose and develop 3 or 4 or
5 prospective directions out of the existing 40. Instead of speaking
about innovative economy but failing to spare a cent for the national
innovative system since 2003.