The meeting of head of National Assembly commission on foreign affairs Armen Roustamyan with the students of Yerevan Linguistic University named after Valeri Briusov was surprising. In spite of the fact that some powers do their best to make us believe that young people advocate the Constitutional Draft, it turned out that most of the students didn’t think so. You can’t see this on TV, because after the official opening (10-15 minutes) operators took their cameras and left. Students asked really serious questions and sometimes Mr. Roustamyan fell into a difficult situation. S. Zolyan was trying to help him.
I will discuss only one question asked by a lecturer: “Several days ago Galoust Sahakyan announced that if people voted for the Constitution our budget would be increased from 1 billion up to 1,5 billion. How is this going to happen?” Concerning this Mr. Roustamyan said that the income would be increased by amending a provision in the new Constitution that allows making some fields monopolistic. As an economist I don’t understand how this provision can provide this kind of increase in the budget income. Probably the other participants didn’t understand this either.
According to Mr. Roustamyan there are fields that are really monopolistic; this is effective from its economical view. But only some fields: “These fields are made by using some mechanisms and leverages of the government and by giving privileges to them. They don’t let other participants develop, and only one of those participants can sell the product they produce. In this case they operate in “shadow economy” and they don’t pay taxes. And in this case if we cut the number of these kinds of producers down, we will be able to increase the income of the budget”.
Everything is logical here. But please read the proposed changes carefully and try to understand how this is going to support the budget income increase by cutting the number of shadow economy companies down.
“Competition limitation, all possible kinds of monopoly and the allowed forms can be defined by law, if it is necessary for protecting the interests of the society”.
This means that on the one hand they agree with the fact that monopolistic companies operate in shadow economy, and on the other hand they allow this.
Also when speaking about monopoly they didn’t speak about any concrete fields, but only presented some ideas without any concrete examples.
As I have noted in one of our previous publications, according to specialists, the existing Constitution and laws are enough to cut the shadow economy down. As for increasing the budget, if the Central Bank makes the exchange rate for USD go down (for instance to 350 dram) in the future, our budget may be increased up to two billion dollars. If we pay attention to the existing exchange rate we will see that our budget is less than one billion. But our budget may be increased in the future in case the exchange rate changes again (if the price for USD comes down). This idea of cutting the shadow economy down was a part of the pre-election program of oppositionist Artashes Geghamyan. During the pre-election period the governmental powers didn’t think this was a smart idea.
Besides that, if we take into account the growth mark of our economy, the budget will be increased in the future up to 1,5-2 billion despite anything. And generally I wonder where they got these numbers from. Have they made any analyses? To this question ex prime-minister Hrant Bagratyan gave a good answer. According to him, by saying this, the authorities agree with the fact that nearly 50 % of our national economy operates in shadow economy. But according to Mr. Bagratyan in regard to this, political will is more important than these kinds of changes.
Mr. Bagratyan asked us to pay attention to the developments on Buzand street, which is also important from the view of private property protection and economic development. According to Mr. Bagratyan, there are no serious differences between the existing Constitution and the new one, and in some cases the existing one is better. Also the fact that there is nothing written in the new Constitutional Draft concerning the Constitution Day makes us worry. Maybe they have decided that we don’t need such a day.