By Atom MarkarianThe Armenian government unveiled on Wednesday its promised plan to partly compensate some of those citizens who effectively lost their Soviet-era savings bank deposits during the hyperinflation of the early 1990s.
The sensitive issue has long been exploited by Armenian politicians and again came to the fore earlier this month with the inclusion on the National Assembly’s agenda of a relevant bill drafted by speaker Artur Baghdasarian’s Orinats Yerkir Party. Baghdasarian’s government allies, notably Prime Minister Andranik Markarian’s Republican Party (HHK), oppose that bill, saying that it would lead to a waste of scarce public resources.
The government wants instead to compensate only the poorest of the deposit holders who are among 140,000 Armenian families currently receiving poverty benefits from the state. Markarian reaffirmed its intention to spend 1 billion drams ($2.3 million) for that purpose next year. “The compensation will be continuous and should be complete in 2009,” he said, adding that it was approved late on Tuesday by leaders of the HHK, Orinats Yerkir and the third party represented in his cabinet, the Armenian Revolutionary Federation.
The sum pales in comparison with a total of 6.5 billion rubles ($9 billion, according to the official Soviet exchange rate of the late 1980s) which an estimated one million Armenians had on their bank accounts when the Soviet Union collapsed. Expert estimates of the real market value of that money vary from $400 million to $800 million.
Addressing a large group of lawmakers, Markarian proposed a complicated regressive scale for deposit compensation whereby those who had 1,000 rubles deposited with the Soviet Savings Bank would now be paid an equivalent of $200. By comparison, those who had 5,000 and 10,000 rubles would get only $340 and $420 respectively.
The government has yet to calculate how much money is needed for implementing the scheme which some analysts say will cover up to 50,000 families. Markarian said it offers them a more “dignified” solution than the Orinats Yerkir bill which calls for $83 million to be paid to all deposit holders. “International experience shows that such compensations can only be partial and have a particular social orientation,” he argued.
Savings compensation was one of Baghdasarian’s key promises in the run-up to the last parliamentary elections in which his party did well. His controversial bill was already blocked last year by the government in which Orinats Yerkir is represented with three ministers.
The Armenian authorities’ decision to revive the issue was unexpected. It followed an October 1 meeting between President Robert Kocharian and leaders of the coalition parties. The Armenian press has since been rife with speculation that the move is aimed at wooing the apathetic electorate ahead of next month’s referendum on constitutional amendments.
Markarian unveiled the scheme as he formally presented Armenia’s draft budget for next year to members of several standing committees of the National Assembly. The proposed budget calls for an almost 20 percent increase in public spending which would pass the $1 billion mark for the first time since Armenia’s independence.