Government Submits Budget Reform Project

YEREVAN (Noyan Tapan)–At a special meeting of the Armenian National Assembly Monday the government presented a bill on making amendmen’s to the 1999 state budget. Presenting the bill–Minister of Finance Levon Barkhoudarian stated that in comparison with the previous bill–the budget revenue is to increase by 4.3 billion drams–expenditures by 390 million drams and the budget deficit is to make up 3.9 billion drams.

The bill provides for considerable changes in the budget expenditure pattern. The changes are mostly aimed at the settling debts that resulted from the non-paymen’s of other economic sectors for energy. The total of these paymen’s is 20.79 billion drams–4.4 billion drams being the credit to the "Nairit" chemical plant and 16.4 billion drams compensations for the supply of drinking and irrigation water as well as for heating.

To effect these paymen’s–the government reduced a number of previously planned expenditures–in particular–in the sphere of capital construction.

Barkhoudarian stated the government’s intention is to settle all the debts of the energy sector–which total 90 billion drams. According to him–the government will cover only the expenses it is responsible for.

At the same time the minister stressed that relevant programs are being prepared for the reforming of water-supply and heating systems.

The Nairit chemical plant is currently unable to operate at full capacity–which results in debts totaling 8 billion drams yearly. The government considers it necessary that this giant of the industry be preserved–therefore gran’s it credit. Nairit is expected to cover 3 billion drams of debt without assistance. According to the minister–the development of Nairit’s preservation program is nearing completion. As a result–the enterprise will become profitable in two years.

Barkhoudarian also reported that if the revenue pattern had been fulfilled in conditions that existed until the end of July–by the end of 1999 budget revenues would be 9.1 billion drams lower than projected. On August 1 the government increased the excise duty on tobacco products and environmental paymen’s for gasoline–which means an additional 11 billion drams by the end of 1999.

The Parliamentary Standing Committee for Finance–Credit–Budgetary and Economic Affairs made a positive assessment of the government-submitted bill on amendmen’s to the budget–Committee Chairman Vardan Khachatrian said at the special parliamentary meeting Monday.

Stressing that amendmen’s to the country’s basic economic law will produce a serious impact on the country’s economy during the next five months of 1999–Khachatrian expressed conviction that in conditions of 20-billion dram deficit the government chose "the most difficult but least painful way for the people."

However–he said that the expenditure pattern in the government-submitted bill is not convincing. The expenses on drinking and irrigation water and heating are not clear and their calculation should be more precise.

According to Khachatrian–the proposals on the expenditure pattern were accepted–but those on the revenue pattern were not. In particular–the proposal of the speaker of the parliament concerning a 141-million dram cut of the parliament’s budget–as well as those on retention of expenses on medical assistance to socially vulnerable sections of the population–as well as of expenses on the struggle against infectious diseases were accepted.

Khachatrian said the Committee believes that in 2000 the government will be deprived of the right to regulate the tax framework by statuary resolutions–which–according to him–is based on Article 46 of the Constitution. He also pointed out that the expenditure pattern of the 2000 budget will be thoroughly studied–and the Committee will ask for more reliable documen’s.

Khachatrian informed those present that at the suggestion of the speaker of the parliament the Committee will set up a working group to study the main reasons for the budget deficit.

9. First Pan-Armenian Games To Open On August 28

YEREVAN (Noyan Tapan)–The opening of the first Pan-Armenian Games will take place at the Hrazdan stadium on August 28. According to reports–58 cities from 23 countries around the world will have their representatives and athletes at the Games. There will be a total of 1,200 athletes competing in 7 sports–including soccer–basketball–volleyball–tennis–table tennis–track & field athletics–and chess. The Games will end on September 5.

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