The Nagorno-Karabakh parliament approved on Thursday the unrecognized republic’s state budget for next year that calls for an 8 percent increase in government expenditures projected at 64.8 billion drams ($180 million).
The higher spending target was made possible, in large measure, by a corresponding rise in annual subsidies from Armenia that continue to account for most of the Karabakh government’s budgetary revenues.
The subsidies, officially called “inter-state loans,” will total 35.4 billion drams in 2011. The authorities in Stepanakert will still run a budget deficit of over 2 billion drams.
About one-quarter of the projected expenditures are to be channeled into social programs. One of those programs envisages the construction of free housing for about 100 Karabakh Armenian families whose members were killed in the 1991-1994 war with Azerbaijan.
Another 3.8 billion drams was budgeted for healthcare, up by 25 percent from this year’s level.
Karabakh Prime Minister Ara Harutiunian, whose governing coalition comprises all four political groups represented in the local legislature, told lawmakers that “food security and energy independence” will be his cabinet’s chief economic priorities in 2011.
“From 2012 the NKR will become self-sufficient in energy … and we will be able to think about exporting electricity,” he said.
Electricity production in Karabakh is expected to soar in the coming years as a result of the ongoing construction of more hydro-electric stations. The Karabakh and Armenian prime ministers inaugurated one such plant in the northern Martakert district in April.
Agriculture will still remain the dominant component of the disputed territory’s economy. Harutiunian said his government will promote its “intensive development” in 2011 and the following years.