In the first half of this year the revenue of the RA state budget amounted to 300 billion AMD, which only makes 1 third of the expected annual revenues forecast for 2009 (over 900 billion AMD).
“We do not intend to apply sequester,” approximately 1.5 years ago stated the RA Prime Minister Tigran Sargsyan by adding that the only way of not cutting expenses is the increase of the budget deficit. Let us remember that at the beginning of the year a part of the expenses of the first and second quarters were moved to the third and fourth quarters. Is the situation so serious at this moment that the budget needs to go through sequestering? Or what privileges does sequester have? In this regard the opinions of various experts almost match.
Former mayor of Yerevan, economist, Vahagn Khachatryan: As at the beginning of the year, after the completion of the first quarter, and now as well I am sure that there has been need for sequester. This way people would clearly know what the budgetary policy of the current year is going to be like for the rest of the year. Today nobody can clearly say which expenses were deducted, what expenses were included and excluded. Besides that, as a state, it would be more relevant if the government presented the revised budget and that way that can show to the citizens that the best way to overcome the crisis is to reduce the expenses and move them to other segments. I mean that it would be expedient that except for the necessary expenses (salaries, pensions, etc) other expenses should be excluded for this year. The construction of administrative buildings, purchase of in-service vehicles, hiring new state employees and per diems for foreign visits are expenses, which are not urgent but are made. For instance, I can mention the construction of summer houses for the presidential administration on Proshyan street or construction of the Charles Aznavour building. This means that in the event of sequester everybody gets to know which expenses are moved to the third and fourth quarters and which remain.
Deputy-chairman of the bureau of the Heritage party, economist Movses Aristakesyan: At the beginning of the year the Prime Minister said that we are moving to the situational management of the budget that is the quarterly regulation. Moreover, the government has even submitted a bill to the NA, by which it asked for a permission to increase up to 7.5% deficit in the budget line. This means that they are very concerned about the sufficient collection of revenue and that they had preliminarily anticipated unrealistic expenses in the budget. Therefore, I think that sequester is necessary and that a number of expenses, such as maintenance of the state administration, trips to foreign countries.
Advisor to the NA chairman, economist Tatoul Manaseryan: The necessity of sequester is generally conditioned with two factors. One of them is that the treasury of the country is not receiving a sufficient amount of revenue, which creates certain difficulties in the process of fulfilling expenses. In the conditions of an economic plummet it is evident that there is such a need in our economy. In the meantime, if we take into consideration the fact that we have received funds in the shape of credit resources and a part of them is given exceptionally for the provision of the budget deficit, then it is up to the government to determine the need of the sequester. I, as an economist, would give the following formulation – no matter how insufficient the tax incomes are and no matter how objective the reasons are I find it unacceptable to deduct social expenses and I think the government understands this as well.
Deputy-chair of the NA standing committee on economic issues Vardan Bostanjyan: The deputy-minister of RA Vardan Aramyan has already informed that we won’t be able to fully execute the 945 billion AMD expenses planned for 2009. This means that it is possible that the expenses may be cut for up to 35 billion AMD and the expenses of our budget will make 910 billion AMD. In other words this cut is called sequester in foreign language regardless of the fact that we don’t have a legislation on this matter. At this moment we shouldn’t speak about sequester because some of the expenses were moved to the fourth quarter of the year. But I think the slump of the budgetary incomes is quite an outstanding number (the tax incomes in the first quarter reduced by 18.5%) and therefore I think that by the end of the year the government will make a recommendation for conducting budget sequester. As a matter of fact the institute of sequester is no tragedy. The problem of sequester is that it causes the resignation of the government as well. But as in our case it is conditioned with various factors, on which Armenia cannot influence then the issue of the resignation of the government is not appropriate for the government. As of the sequester I think it is going to take place as we don’t have any alternative.