“The government has failed to realize the president’s campaign promises”

ARF-D parliamentary faction member and deputy chair of the parliamentary Standing Committee on Financial-Credit and Budgetary Affairs Ardzvik Minasyan said this during an interview with the newspaper Hayastani Zrucakic.

Hayastani Zrucakic: There is talk once again that the price of natural gas will rise. Could this happen and where will this lead?

Ardzvik Minasyan: It is obvious that being an essential product, increase in natural gas prices will have a chain reaction for practically all other products or goods in Armenia, including the service sector. It pains me that the authorities in the country are not taking this seriously or are trying to conceal this reality.

HZ: And what is the reality?

AM: The absence of a competitive market in this particular area has led us to the formation of monopolies. In this area additional services provided, for their part has become a burden for both the consumers and producers. Our parliamentary faction in this regard has issued not only a written question but has presented a proposal in the National Assembly, which foresees conducting  serious analysis and research and which will bring to the fore the inefficient factors in the system that exist within the republic.

HZ: Is it possible that this proposal will be accepted?

AM: Judging by the position of the current authorities, no. The natural gas sector and the increase of prices are viewed as a potential way to earn a profit, and not to realize reforms within the country.

HZ: In the natural gas service sector, are their additional services?

AM: Several issues are clear; the fact that citizens are not able to understand what quality natural gas they are receiving and paying for. Also, a structure has been created, which provides additional services for the consumer – security and technical services which require huge means from the system and from society. There is also the issue of natural gas stations. The demand which has been defined in their regard is particularly harmful for small and medium stations.  Larger natural gas stations will remain and they will “swallow” the smaller ones.

Inflation: the government is conducting a policy based on hidden indicators

HZ: In your opinion what is the reason for the drastic increase in food prices?

AM: In general, the Central Bank of Armenia (CBA) must be responsible for curtailing inflation however the CBA does not have a clearly developed methodology which would specify those products that make up the fundamental basis for inflation. The result is that although each citizen feels the increase of prices in his/her daily life, official statistics record that the percentage [of inflation] does not exceed single digits. This gives the government the ability to conduct a policy based on hidden indicators. In essence, we strive to maintain indicators on par with Eastern Europe and we are apparently leading in the CIS region. However from the standpoint of the quality of life, we are constantly regressing.

HZ: In other words, we are worse off today than two, three years ago?

AM: Naturally. Today the ordinary citizen is living in worse conditions than in 2007 and whether there is hope that we will see an increase in wages to improve their quality of life, I don’t see any at this moment in time.

HZ: Where will all of this lead?

AM: Armenia’s economy will be dependent upon the service sector; production will be close to zero percent; we will become a consumer-only society.

Inflation has devoured pensions; increase of wages is not expected.

HZ: There was some increase in pensions. But how do they measure up against inflation?

AM: It is obvious that these increases in pension that the government proudly presents, not only hide the real situation but they do not leave any positive impact. The 2500 AMD increase has already been devoured up by inflation.

HZ: What will the proposed pension reforms resolve?

AM: Those are targeted simply to shore up financial markets. There are many refutable points within the proposed pension reform. With regard to employment, let me state that according to the expected expenditures for 2011-2013, particularly in the public sector and for other state employees, there will be no wage increases. Not only is increases in wages not expected, but according to the proposed pension reform, even those receiving minimum wage will also be taxed. This government is not putting into action or realizing the campaign promises made by the President of the Republic of Armenia nor of the victorious political powers who promised wage increases and the creation of jobs but it is rather doing the exact opposite – it is conducting a policy of decreasing real wages and reducing employment opportunities.

Economic growth or a numbers sleight-of-hand?

HZ: The government is expecting to see 4 percent economic growth in the fourth quarter of this year. Do you think this is possible? Is there economic growth now?

AM: Economic growth, if there is no quality at its foundation, is fictitious. It is possible to ‘paint’ any type of growth, beginning with the fact that inflation brings with it economic growth, and finishing with the possibility of showing some growth in one particular sector and correspondingly, overall economic growth. It is obvious to everyone that inflation has moved into double digit figures while official figures place it in the single digits. We have economic sectors where there isn’t any system for administering statistical studies, for example, agriculture, transport services, etc. It is possible to present any given statistics but what they are is simply a manipulation of numbers. One thing is a fact; that country whose economy has contracted by 15 percent cannot expect to have the same percentage of economic growth the following year. It is also apparent to everyone that in an oligarchic economic structure it is not possible to secure growth for the well-being of society if the government itself has no intention of struggling against the oligarchy or oligopoly. And our government and the ruling authorities don’t even have the desire to struggle.

What is society prepared to do other than leave the country?

HZ: Do you think there will be a surge in social protest and resistance with the increase in natural gas prices?

AM: Our society is used to the worsening of social conditions but they express their discontent by deciding to leave the country. Public surveys have shown that 45 percent of the population is ready to leave the country. Certainly, it is not only the social and economic factors that are the reason; the overall decline in spiritual and moral values, the lack of confidence in the future and society’s general lack of malaise regarding those people who really think about the country. There are many reasons; certainly most of them are social and economic, which are not motivating people to go to the streets in protest, to protect their rights, but rather to simply leave.

HZ: What do you see as a way out?

AM: The way out is the following: this government is not in a position to understand the real social and political challenges facing Armenia and it must resign. A government must come in its place that fundamentally understands Armenia’s economy and is ready to propose a new economic plan, one where balanced development prevails. To realize this, it is necessary to have political will by not only those who govern but by those who are in the opposition. The opposition must be able to unite to have the government resign and place a new proposal on the table.

HZ: Can the opposition unite when they are more interested in struggling against each other as opposed to the ruling authorities?

AM: When I say the opposition, I do not have in mind the Armenian National Congress (ANC) – I don’t even consider them as opposition. There are people within the ANC who can be oppositionists, but the leaders are not. We have to be able to unite those who love this country just as they love their parents and not those who simply strive to come to power to acquire the ability to procure that which they can for their personal gain.