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Ministry ‘Forced’ To Cut Social Spending


By Shakeh Avoyan

The number of socially vulnerable Armenian families receiving modest monthly benefits will be cut by one more than 10 percent to 156,000 under proposals submitted to the government by the ministry of social security.

“The number of eligible families has to be reduced. We can’t keep it unchanged because we have less financial resources this year,” Social Security Minister Razmik Martirosian told RFE/RL on Monday.

The government decided late last year to spend less on social programs, citing an improved economic situation and new priorities. The amount of budgetary funds earmarked for social benefits is projected to equal 12.3 billion drams ($22 million) this year, 2.5 billion drams less than last year. The 2002 figure also includes some 2.5 billion drams in payment arrears dating back to 2000.

Martirosian’s ministry was instructed to revise downwards the list of impoverished households eligible for government aid by the end of March. Martirosian said it has tried to minimize the impact of the cuts.

The ministry will also propose another change in the existing social security system whereby the amount of monthly benefits will primarily depend on the number of children in a vulnerable family. But preliminary calculations suggest that the average payment will remain in the range of 7,000 to 8,000 drams.

Martirosian acknowledged that it is nowhere near enough to meet the basic needs of the aid recipients. He said the Armenian government is unable to generate more revenues given the existing economic conditions.

The World Bank estimates that at least 55 percent of Armenians live below the poverty line. Most of them are not covered by the social safety net.

The bank and other Western donors say the poor have drawn few benefits from several consecutive years of economic growth as it has widened income disparity in the country. The government agrees that it should ensure a more equitable distribution of revenues. But it also argues that the relatively fast growth has somewhat eased the magnitude of the socioeconomic problems.
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