By Astghik Bedevian and Emil DanielyanThe Armenian parliament approved on Wednesday the government’s draft budget for next year that calls for an almost 16 percent increase in public spending projected to total a record-high 558.7 billion drams ($1.51 billion).
The National Assembly voted by 77 to 3, with 6 abstentions, for the bill after more than a month of discussions in its standing committees and debates on the parliament floor. According to Finance and Economy Minister Vartan Khachatrian, the government received more than 400 relevant proposals from lawmakers and rejected most of them, agreeing to increase its projected expenditures only about one billion drams.
The government also withdrew a proposed steep pay rise for high-ranking state officials, bowing to pressure from the assembly’s opposition minority. Khachatrian said the 710 million drams initially earmarked for that purpose will be spent on the construction and repair of public schools instead.
The government made sure that turnout at Wednesday’s session is high enough to prevent the opposition from scuttling the passage of the spending bill. Deputy speaker Vahan Hovannisian, who chaired the session, urged pro-government lawmakers not to vote in place of their absent colleagues, a practice widely ridiculed by the local press.
“I am asking all deputies to vote only for themselves,” Hovannisian stated mockingly. “The buttons next to you are not designed for you. Only the ones in front of you are yours.”
The Armenian military will be the main beneficiary of some 75 billion drams ($203 million) in extra expenditures envisaged by the government. Its overall budget will soar by nearly 40 percent to $285 million in 2007.
Defense Minister Serzh Sarkisian and other Armenian officials attribute this to an even steeper surge in the military expenditures of neighboring arch-foe Azerbaijan which are due to exceed $1 billion next year. Azerbaijani leaders have made it clear that they will use their country’s rising oil revenues for a massive military build-up which they hope will force the Armenians to place Nagorno-Karabakh back under Azerbaijani rule.
More than one third of the projected expenditures are earmarked for education, healthcare, social security and other public services. Officials have said this will allow for a sizable increase in the salaries of public sector employees.
Armenia’s national budgets have grown steadily 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. They will also require a further rise in the government’s tax revenues that will make up an extremely modest 15 percent of GDP this year.