By Atom Markarian
Nagorno-Karabakh’s Prime Minister Anushavan Danielian advocated over the weekend a major increase in annual financial assistance from Armenia which covers three fourths of his unrecognized republic’s $22 million budget.
Speaking to RFE/RL in Yerevan, Danielian argued that Karabakh is entitled to more aid because it does not tax Armenian imports.
The Armenian government has provided 41.7 billion drams ($75 million) in budgetary subsidies, officially called “intestate loans,” to Karabakh over the past five years. The allocation for this year is set at more than 9 billion drams, enough to completely cover the Karabakh budget deficit.
The disputed region’s 2002 budget calls for 12.35 billion drams in expenditures and only 2.84 billion drams in revenues. Karabakh officials say the revenues will grow by more than 12 percent next year.
According to Danielian, Yerevan should have earmarked at least 12 billion drams given the fact that the Stepanakert government does not impose customs and value-added taxes on products imported from Armenia. He said their taxation would have brought some 6 billion drams in extra revenues to the Karabakh treasury every year.
Danielian, who was reappointed prime minister by President Arkady Ghukasian on September 9, further noted that the lack of government funds is offset by rising foreign direct investment in the Karabakh economy, which he said will exceed $5 million this year and “go up drastically” in 2003. “The process is increasingly gaining momentum,” he said.
Official figures show that foreign companies, mostly owned by ethnic Armenians, have invested around $30 million in Karabakh since the beginning of 2000.