Hrant Bagratian, an opposition politician and former prime minister, harshly criticized on Tuesday the Armenian government’s draft budget for next year which calls for a nearly 7 percent increase in public spending.
The total spending target of 998.7 billion drams ($2.8 billion) set by the 2011 budget is up from 882 billion drams which had been budgeted for 2008, a year that ended with the onset of a global economic crisis.
Bagratian scoffed at the planned increase, claiming that in 2011 the government will actually spend less, in real terms, than it did in 2008. He argued that its budgetary revenues are projected to surpass the 2008 level by more than 13 percent and will be more than offset by consumer price inflation.
“The budget [revenues] will have risen by 13 percent and consumers prices by 26 percent,” he told reporters. “That means the 2011 budget will be smaller than the 2008 budget by 13 percent.”
“Where is progress, when you adopt a smaller budget?” said Bagratian. “The years 2008-2011 are the years of Serzh Sarkisian’s rule. The guy has reduced our budget by 13 percent during his tenure.”
Deputy Finance Minister Vartan Aramian dismissed these arguments, saying that the former premier manipulated economic data and failed to take into account lingering effects of the global recession. “If we look at the past, there were many years, including during Hrant Bagratian’s [1993-1996] prime ministership, when [annual] inflation was much higher, at more than 10 percent, while expenditures rose by only 2 percent,” he told RFE/RL’s Armenian service.
“But such a static comparison is not good because there may be a global economic shock in a particular year, which is what we’ve had,” said Aramian. “It is simply wrong to pick one year and base your discourse on it.”
Aramian also argued that expenditure analysis is a more objective way of evaluating state budgets and that Bagratian is inflating inflation figures. “If we compare the 2011 budget with the 2008 budget, we get a 25-26 percent increase in spending which exceeds cumulative inflation by 2-3 percentage points,” he said, adding that spending on pensions and other social programs will have grown even faster by the end of next year.