There may be little love lost between Armenia’s leading opposition forces but they are unanimous in promising massive increases in government spending on social programs in the ongoing parliamentary race.
The Armenian National Congress (HAK), the Armenian Revolutionary Federation (Dashnaktsutyun) and the Zharangutyun (Heritage) party claim that the state budget, projected at 1.04 trillion drams ($2.7 billion) this year, can at least be doubled quickly through a genuine crackdown on tax evasion and business monopolies. That, they say, should translate into corresponding rises in public-sector salaries, pensions and other benefits.
The President Serzh Sarkisian has already responded by urging voters not to buy into drastic pay rises promised by the opposition. Speaking on the campaign trail, Sarkisian has dismissed them as unrealistic.
“According to very serious estimates by international experts, Armenia’s budget should have been worth $7.5 billion,” HAK leader Levon Ter-Petrosian said on Saturday at a campaign rally in Garni, a large village in the central Kotayk province.
“This means that Serzh Sarkisian, [Prime Minister] Tigran Sarkisian and, before them, Robert Kocharian, and the whole government pyramid steal $5 billion from you every year,” Ter-Petrosian alleged.
Vahagn Khachatrian, an economist and senior HAK member, insisted on Monday that the Armenian government can at least double its tax revenues if it cracks down hard on the sizable informal sector of the economy. He said de facto business cartels operated by government-linked entrepreneurs are a key source of widespread tax evasion in Armenia.
“We can do that only when competition is restored in Armenia’s economy, when we get rid of this monopoly-based economy,” Khachatrian told RFE/RL’s Armenian service (Azatutyun.am).
Arsen Hambardzumian, a senior member of Dashnaktsutyun who served as labor and social affairs minister in 2007, likewise claimed that the Armenian budget can be tripled in case of “radical changes” in the government’s economic policies. He said the government should not only improve tax collection but also support domestic manufacturers and small and medium-sized businesses.
Accordingly, Dashnaktsutyun’s electoral manifesto commits the party to doubling the average amount of pensions to 63,000 drams ($160). It says the minimum monthly wage in the country should also be raised to that level.
Zharangutyun goes further in its campaign platform, promising an average pension of 80,000 drams a month. It also pledges to ensure that the average monthly wage in the country rises from the current 115,000 drams to 200,000 drams within months.
“The state does have the resources to do this now,” Zharangutyun spokesman Hovsep Khurshudian told RFE/RL’s Armenian service (Azatutyun.am). “They are simply being misappropriated in the form of unpaid taxes and stolen budgetary resources.”
Armenia has long had one of the lowest rates of tax collection in the former Soviet Union. The authorities in Yerevan claim to have improved tax administration in recent years and say it will become even more efficient in the near future.
Speaking at a pre-election congress of his Republican Party of Armenia (HHK) last month, Sarkisian said the ratio of tax revenue to Gross Domestic Product rose from roughly 17 percent in 2007 to 20 percent in 2011. The president also strongly defended his administration’s broader socioeconomic record against opposition criticism.