ARMENIA ADOPTS LANDMARK BUDGET FOR 2006

November 14, 2005
Eurasia Daily
By Emil Danielyan

On November 11 Armenia's parliament approved the national budget for next year. The budget volume is due to exceed $1 billion for the first time in the country's post-Soviet history. [...].
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Civil servants, schoolteachers, and other public sector employees will be key beneficiaries of the increased spending targets. Their still-modest salaries are expected to rise by 15-30% in 2006. The government plans a similar increase in pensions and poverty benefits. Also, for the first time since independence Armenia will cover most of its budget deficit from domestic sources, as opposed to low-interest loans provided by the World Bank.
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However, the picture becomes less rosy on closer inspection. The Armenian budget, though record-high, will still be quite modest in both absolute and relative terms. The government's tax revenues may be set for another increase in 2006, but they will make up less than 16% of the anticipated GDP. This proportion is low even by ex-Soviet standards, reflecting the scale of tax evasion in Armenia.
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[...]. The experience of neighboring Georgia, which has more than doubled its state budget since the 2003 Rose Revolution, suggests that the problem can not be addressed without more radical measures such as a genuine fight against government corruption. Kocharian's regime is clearly unwilling to take such measures.
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Note: Above are excerpts from the article. The full article appears here. Clarifications and comments by me are contained in {}. Deletions are marked by [...]. The bold emphasis is mine.