Sargsyan Vows Continued Reforms Stricter ‘Discipline’ in New Plan

YEREVAN (RFE/RL)–The newly appointed Armenian Prime Minister Vazgen Sargsyan has pledged to carry on with economic reforms in Armenia–while making them more socially oriented to alleviate their side-effects.

He told the Armenian parliament on Friday that his government will strive to crack down on the rampant corruption through tougher penalties and more efficient work of the state bureaucracy.

Sargsyan was presenting the new government’s program of actions to the lawmakers. Most of them are officially or unofficially affiliated with the Unity bloc–which he and ex-Communist leader Karen Demirchian co-head.

President Robert Kocharian named Sargsyan as premier last week following the bloc’s victory in the May 30 parliamentary elections. The Miasnutyun-controlled parliament elected Demirchian as its speaker shortly before that.

The 131-member legislature can theoretically remove the Sargsyan cabinet from office by a vote of no-confidence. The absence of such a motion within 24 hours from the government program’s formal submission will mean that it is automatically approved. Opposition groups in parliament have indicated that they will not challenge Sargsyan for now–apparently realizing their minority status.

Although Unity called for a leftwards swing in the economic policy–the composition of the new cabinet suggests that no major changes are likely. Sargsyan reinforced this belief on Friday when he announced that "reforms have no alternative," adding that "this is the only path of development."

But he said the previous liberal cabinets’ failure to "explain to the people what they are building" has resulted in a widespread disillusionment with the transition to market economy. "The people should have perceived [the reforms’] inevitability," he said.

The first challenge to face the government in the coming months will be how to ensure the planned level of revenues in its budget for this year. The government program says as much as 8 percent of 191 billion drams ($360 million) in projected revenues are now "jeopardized." It says government spending will have to be cut if the money in question is not collected.

Sargsyan threatened to use "unpopular measures" to boost tax collection. Armenia is heavily dependent on financial injections from the World Bank and International Monetary. Most of the country’s budget deficit is financed from external sources. Sargsyan pledged to "continue and deepen close cooperation with international financial cooperation."Economic growth is impossible without foreign investmen’s. But foreign investmen’s are in turn impossible without an initiative coming from the recipient country," he said. "Government members must act like a united economic team and bear personal responsibility for the program’s implementation."

However–Sargsyan–a former defense minister who rose to prominence during the war with Azerbaijan–takes the view that the conflict’s settlement is not a necessary condition for the economic improvement. He promised today to put in place an "equal and trustworthy framework for private investmen’s."

One way to get many idle enterprises working–according to the Armenian prime minister–is to use "corresponding tax measures" against their owners. He argued that owners of privatized factories will thus be interested to at least maintain their production levels or sell them out to more efficient investors.

He said that coupled with a strict "discipline" in government structures and their greater accountability those measures will enable his country to "break through this grave crisis."

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