Opposition lawmakers faulted the government for Armenia’s increased public debt on Wednesday as the National Assembly lifted a legal limit on further government borrowing.
An Armenian law has stipulated until now that the total amount of debt incurred by the government cannot exceed a sum equivalent to 60 percent of Gross Domestic Product.
Government-drafted amendments will scrap this borrowing cap. At the same time, they will require the government to come up with a plan to ease the debt burden.
The parliament passed the amendments in the first reading by 61 votes to 37. Voting against them were deputies from the opposition Yelk alliance and businessman Gagik Tsarukian’s bloc, the second largest parliamentary force.
“The sole aim of this bill is to attract more foreign loans. This is unacceptable,” Naira Zohrabian, a senior lawmaker from the Tsarukian bloc, said just before the vote.
Zohrabian said Finance Minister Vartan Aramian failed to present convincing arguments when the parliament debated the bill on Tuesday.
Aramian claimed during the debate that the bill is not primarily aimed at allowing the government to obtain more multimillion-dollar loans. He insisted that the government is committed to cutting the GDP-to-debt ratio from 55.4 percent to 54.4 percent by the end of next year.
Aramian also dismissed claims by another Tsarukian Bloc deputy, Mikael Melkumian, that the government has wasted or misused many loans extended by the International Monetary Fund, the World Bank and other multilateral lenders. “Armenia is considered by them a best performer country,” said the minister.
Armenia’s public debt, which also includes foreign loans extended to its Central Bank, currently stands at $6.4 billion. It was below $2 billion before the 2008-2009 global financial crisis that plunged the county into a severe recession.
Later in the day, the parliament allowed the government to take a $40 million loan from the Asian Development Bank. The money is to be used for financing the state budget deficit.