By Emil Danielyan
The Armenian government has unveiled its draft budget for next year that envisages an almost 16 percent increase in its expenditures projected to total 558 billion drams ($1.48 billion).
Officials say nearly half of the extra spending worth 75 billion drams would be channeled into the Armenian military and law-enforcement agencies.
In particular, Armenia’s 2007 defense budget would soar by 35 percent to almost 100 billion drams ($265 million). The proposed allocation is clearly aimed at somehow offsetting an even steeper rise in Azerbaijan’s military spending, which is due to pass the $600 million mark in 2006.
According to Deputy Finance Minister Pavel Safarian, the budget, if approved by parliament, will also lead to a sizable rise in the salaries of public sector employees. He said the government plans to raise the average monthly wage of civil servants by 20 percent to 105,000 drams ($276) in 2007. Fulltime schoolteachers would earn the average of 74,000 drams, or 27 percent more than they do now, Safarian told journalists.
Armenia’s national budgets have steadily increased over the past decade largely due to robust economic growth reported by the authorities. The proposed budgetary targets for 2007 are contingent on a 9 percent increase in Gross Domestic Product forecast by the government.
Economists believe that the still modest public spending should have been much higher given the volume of economic activity in the country. The total amount of taxes and duties collected by the Armenian government in 2005 equaled only 14.5 percent of GDP, one of the lowest proportions in the former Soviet Union.