President Robert Kocharian's appointment of a new Prime Minister in mid-May has generally been received as a squandered opportunity to revive Armenia's economy.
The reserved reception to the appointment of Andranik Markaryan as Prime Minister is in part explained by a lack of faith in the position itself. He is Armenia's tenth Prime Minister since independence. Previously, he led the parliamentary majority, which had insisted on the candidacy of the dismissed Prime Minister Aram Sarkissyan, brother of Vazgen Sarkissyan, who was assassinated in the parliamentary massacre of October 1999.
In choosing Markaryan, President Kocharian evidently put a higher value on the prime minister's ability to negotiate and provide an effective link between the President's office and parliament, to help put an end to their frequent confrontations, than on his economic skills. Markaryan has no administrative experience; he has never even run a small economic organization. Indeed, the economic program presented by the government and approved by the parliament is actually a continuation of the program administered by the two previous prime ministers.
Some have interpreted the appointment of a relatively weak prime minister as a manifestation of the president's desire to have a more active influence on government and on economic policy-making. Prime Minister Markaryan's economic program, submitted recently to the National Assembly, may be the best test of his vision and autonomy.
The vast majority of Armenians agree that the country is on the edge of disaster. Indeed, Haik Babukhanyan, a member of the Right and Accord parliamentary faction, urged the National Assembly in a special June session (before the presentation of the new economic program) that a state of emergency should be declared on the Armenian economy. As he put it, the situation is so extreme that people are not simply leaving the country; they are walking out on foot because of lack of transportation.
Economic observers have noted that the most realistic part of Markaryan's economic program is his description of the difficult social and economic conditions pervading in the country. Unemployment is rising. State defaults on payment of pensions hit 5 billion drams (about US$102 million). Import exceeded export threefold. Economic growth is only one-tenth of the minimum allowed in more stable periods: 0.3% as opposed to 3%. During the first quarter of 2000, fiscal authorities collected on 27 billion drams (US$49.1 million), rather than the anticipated 40 billion drams (US$72.7 million). The shortfall is expected to reach 45 billion drams (US$81.8 million) by the end of the year.
Most observers agreed that the government program is too declaratory and aspirational. While expressing the wish to improve economic conditions, it presents few concrete ideas, specific figures, and real mechanisms to make the program work.
Among its real innovations is the plan to adopt regulations on civil service, increase higher authorities' declarations of income, and improve transparency for state purchases.
The plan has been received with varying degrees of negativity, being both preceded by and itself spawning alternate plans in the National Assembly and the media. Some in the parliament suggested rejecting the former Prime Ministers' programs out of hand since, despite some positive features, they are now outdated and must be replaced with more rigid and realistic anti-crisis policies. Others endorsed an economic dictatorship. Still others backed the creation of an offshore zone, a tax paradise that would attract money from all over the world.
Konstantin Petrosov, an expert in financial and economic issues for the Arka News Agency, observed that even extraordinary measures to fix the economy are not enough any more; they must be revolutionary. He also thinks the government alone will not be able to revive the economy from its coma. Rather, he said, it will require enormous effort from all those involved in state and economic management and the direct and active participation of the business community.
Despite the criticism and flurry of alternative plans, Prime Minister Markaryan has preferred to propose old policies with a proven track record of failure. In early June, Tom Wolf, head of the IMF delegation in Armenia, expressed his concern about economic indices in a meeting with President Kocharian. Reportedly, the President reassured him that the atmosphere had been changing and the situation was under control.
Meanwhile, President Kocharian seems to have an economic plan of his own that he is pursuing regardless of the programs of his tenth (or ninth or eighth) prime minister. He has already declared a precise date by which significant economic improvement will have been achieved: this coming fall. It is likely that the new prime minister and the newly appointed Cabinet will not become a model of longevity.
Mikhail Diloyan is a journalist based in Armenia. He is the executive director of the Yerevan Press Club.
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