GOVERNMENT’S PROGRAM ADOPTED

Yerkir.am
July 01, 2007

"The program presented to your attention is rather ambitious and its
implementation will require maximum efforts from all staff of the
state administration bodies," Prime Minister Serzh Sargsyan presented
the government’s program to the National Assembly.

The program was adopted with the absolute majority of votes. Republican
Party, Prosperous Armenia Party and ARF factions voted for the program,
Rule of Law Country faction abstained from voting and Heritage Party
voted against.

The Prime Minister stressed the five priorities of the program –
national security and sustainable development, efficient public
administration, education and science, equal development of all
regions, social protection of Armenian citizens. The government
is planning to accomplish 8-10% real annual growth of the GDP
in 2007-2012, 10% growth of investments, significant reduction
of poverty, annual increases of pensions, increased financing of
the public healthcare and education, etc. Prime Minister Sargsyan
assured that the government is open for cooperation in the course of
implementation of its program.

Members of the ARF faction expressed their position on the government’s
program during the discussions in the National Assembly.

The statement made by Ara Nranian, member of the ARF’s parliamentary
faction

The development of any country reaches a point when it is necessary
to stop for a while, look back at the road the country has passed
and choose a new road for development, a new ideology for ensuring
progress. In this context, we have some reservations regarding the
program presented by the government.

However, realizing that such changes can be accomplished only when you
form the government, as well as respecting the government’s decision
to present the program in this format and based on these principles,
we decided to go for improvement of the document.

I would like to concentrate on the main proposals we made in regard
to the economic issues. First of all, I would like to point out the
section on industry where implementation of industrial policies,
necessity for an efficient branch-structured economy, industrial
development is stated. We firmly belief that Armenia cannot have
long-term sustainable development only through development of the
construction and service sectors and increase of trade deficit through
transfer. This is why the ARF stressed the importance of correct and
efficient branch structure of the economy.

The next important issue on which we reached an agreement with the
government is the necessity to develop the national airline carrier,
re-equipment and training of its staff. We hope that consistent
implementation of the above-mentioned principles will create the
necessary condition not only for the development of civic aviation but
also for exploitation of our relative advantage and the peculiarities
of our market.

One of the most important accomplishments is the section on foreign
economic policies included into the government’s program. The previous
government programs did not have anything like this because the
previous governments did not pay adequate attention to the problems
of domestic producers and especially the exporters. Development of
domestic production, exports growth and introduction of Armenian
products to foreign markets is the only way for ensuring sustainable
economic development for Armenia, development of entrepreneurship,
solution of the unemployment issue and increase of the state budget
revenues.

We can call our principles and proposals on the reform of economic
policies the "national reformist course" of the economy.

There were principles on which we did not reach an agreement with the
government. One of such principles was the issue of tax revenues. The
government program envisages increase of the tax revenues by 0.3-0.4%
annually. Such a target has never been met. Meanwhile we believe it
is fully realistic to achieve the target of 1% annual growth of tax
revenues through implementation of economic policies and reduction of
the shadow economy. The shadow economy is not only about low level of
tax revenues. We see the shadow economy as a multi-level phenomenon. We
believe the volume and turnout of the Armenian economy are much greater
than the figures presented by the official statistics. In other words,
we think the first problem to be addressed is to present the true
image of the economy.

On the second level we consider increase of the tax revenue as GDP
percentage. On the third level we see the hidden employment which
according to today’s estimates amounts to 200 thousand people. We
believe it is possible to achieve a tax revenue of 25% of the GDP
with such an approach.

The government has planned for a 0.3-0.4% annual growth of tax revenues
but we keep in our mind the annual growth of 1% with the further aim
of discussing this issue in the future.

The statement made by Artsvik Minassian, member of the ARF’s
parliamentary faction

It should be stated that the scope and the quality of the present
program are better than the previous government’s program. We have
participated in the development of some of the provisions of this
program. The program’s provisions on active demographic policies
deserve special appreciation. This strategy as a priority for the
government combined with implementation of provisions on repatriation
inspire a hope that Armenia might achieve a balanced gender and age
distribution of its population.

The next accomplishment of the program in terms of our shared
position is the government’s commitment to develop and implement a
strategy for remuneration of public servants. This is an important
anti-corruption measure. The government should set the standards for
determining the remuneration of public servants based on the quality,
complexity and market value of the services delivered by them, and
the necessary system of social protection should be determined as a
consequence. Through these measures the government can improve the
quality of the public service and set an example for similar policies
in the private sector.

The next important accomplishment is inclusion of ARF’s approaches
on corporate social responsibility and mandatory social insurance
in the government’s program. We have diverging positions with the
government on several issues. I would like to comment on some of them.

First of all, the Constitution states that Armenia is a social
state. This at least means that we must set the minimum living standard
and reform the entire social-economic policies in the country based
on this standard.

However, the present program is not based on such a standard. Instead,
it uses the concept of the poverty line that has nothing to do with
the minimum living basket. Apart from this, the system of social
benefits, including family benefits, is seen as an efficient means
of poverty reduction.

Meanwhile, it is common knowledge that the benefits are or must be a
temporary solution. The society cannot eliminate poverty in the long
term by receiving poverty benefits.

This problem can be solved through income generation and job creation.

Following the provisions of our electoral campaign we proposed to
set the minimum salary at 50 thousand drams in 2008. However, the
Prime Minister did not accept this proposal. Instead, he agreed to
instruct the relevant agencies to present analysis and calculations
to explore this possibility.

We will follow up on this issue and present our position.

Concluding my statement, let me express my confidence that we will
be able to multiply the positive accomplishments we can see today in
cooperation with the President, the government, the civil society, and
the political forces represented and not represented in the National
Assembly. I wish the government efficient work for the benefit of
the nation.

The statement made by Hrayr Karapetian, head of the ARF’s parliamentary
faction

I would like to stress that the ARF has participated in the discussion
of the government’s draft program in the framework of the agreement
signed with the coalition government. We had our own approach and
principles regarding the program. Our faction presented a series of
proposals to the Prime Minister and the authors of the program based on
these principles. A significant portion of the proposals were accepted
and included into the draft. Some of the proposals, which are equally
important for us, were not accepted or will be discussed further.

As a socialist force, the ARF places a great importance on efficient
social security policies as the priority for the government’s
activities. We also stress the importance of active demographic
policies as a priority and a component of national security, and we
see the family as the main subject of the government’s demographic
policies.

ARF believes the role and responsibility of the government in ensuring
efficient functioning of the economy with all its branches should
be strengthened. Shadow economy must be combated. Anti-monopoly
policies must be adopted as an important economic policy. The minimum
living standard must be set as a necessary precondition for poverty
reduction and sustainable economic development. The small and medium
enterprises need serious government assistance. Unequal distribution
of property and unequal opportunities for property owners undermines
national conciliation.

The ARF stresses the importance of the provision in the program on
elimination of the discrepancy between the pensions and the minimum
salary.

We hope that in 2008 the minimum salary will be increased by two times
and mechanisms of its annual indexation will be introduced. It is time
for the government to take the responsibility for continuous increase
of the pensions and salaries in the public sector. The employers in
the private sector should also continuously increase their employees’
salaries.

The proposals made in regard to the provisions on foreign economic
policies, air transportation, energy system, healthcare, Diaspora
and repatriation, defense and security were of crucial importance
for the ARF. A special proposal was made whereby the government will
introduce an electronic reporting system for the customs and tax
bodies in order to minimize the direct communication between tax
and customs officials and the entrepreneurs. This will reduce the
corruption risks in the tax and customs sectors.

The ARF take a note of the program provision whereby a new
anti-corruption strategy will be developed. We are ready to present our
proposals in this regard. It is time to launch a true fight against
corruption, to prevent monopolicies and protectionism, and to reduce
the shadow economy.

The statement made by Vahan Hovhannissian, Deputy Chairman of the
National Assembly

"This is the first time the government’s program is based on the
National Security Concept".

It is very important for me that for the first time, the government’s
program is based on the national security concept. Now that
the government’s program and the national security concept are
interrelated we can see that the national security concept itself
needs revision. There are provisions in the concept that are either
outdated or were not formulated correctly. I will concentrate on
three such provisions.

First of all, the issue of water supply is viewed by the government as
a serious problem. However, the respective provision in the program
seems to be simply a paragraph with no purpose. Meanwhile, there are
serious problems connected with water resources and networks. The
usage of water resources should be viewed as an issue of national
security since correct usage of potable water is one of the most
important guarantees of Armenia’s national security.

The second issue is culture. Fortunately, the government, and I hope,
also the National Assembly came to realize that historical monuments
are not simply the churches, khachqars or castles on the ground but
also the historical heritage that is under the ground. Development
of archeology is very important in the context of formation of the
country’s cultural image. Several issues deriving from this, such as
development of tourism and science are also very important.

The third issue I would like to draw your attention to is the
Diaspora. We welcome the scope of the section on the Diaspora and
the fact that the ARF’s proposals were accepted. However, there
is one provision in the section that states that the institute of
dual citizenship has yet to be developed. Dear parliament, I want to
remind you that the package of amendments to the Law on Citizenship
was adopted six months ago and the institute of dual citizenship was
introduced as a follow up to the constitutional amendments. However,
so far only the ban on voting abroad has been implemented out of all
the provisions included in the package. No other measures have been
implemented in regard to introduction of dual citizenship. We know
that a working group was created that is supposed to work out the
procedures for introduction of dual citizenship.

When we speak about repatriation and making the relations with the
Diaspora more conceptual, the first thing we should do is to introduce
dual citizenship. I hope the government will present the procedure
in near future.

The above said is not criticism of the drawbacks but a call to
concentrate on these three issues and speed up the work in these
directions. It is possible to do this, and we, as the National
Assembly, are ready to assist the government.