From Armenia in brief: From Armenia, in brief 27.09.08

Published: Saturday September 27, 2008

13 percent increase in state expenditures projected for 2009

The Armenian government approved a proposed budget for 2009 that calls for a 13.3 percent increase in spending over 2008. Minister of Finance Tigran Davtian stated in a briefing that expenditures will amount to 945 billion drams ($3.13 billion at current exchange rates) and revenues are projected at 905 billion drams.

The government expects a 9.2 percent growth in the gross domestic product. (The National Statistical Service announced this week that in January to August 2008, GDP grew 10.3% over the same period last year.)

The government plans to allocate unprecedented sums to education (127 billion drams) and healthcare (66 billion drams).

In order to meet the spending targets, the government needs to ensure a 20 percent rise in its tax revenues, projected to total 725 billion drams in 2009. The government recently launched a wide-ranging plan of reforms to improve tax administration and reduce the informal sector of the Armenian economy, RFE/RL reported.

Mr. Davtian said that as part of the reforms, the government would raise the salaries of tax and customs officials by more than 40 percent. It also envisages pay rises for law-enforcement officials, schoolteachers, medics, and other public-sector employees, he said.

The defense budget remains the single largest item in the budget. It is projected to grow by 20 percent, to $495 million.

New Russian gas price for Armenia unveiled

The cost of Russian gas in Armenia will rise to $154 per thousand cubic meters on April 1, 2009, Mediamax has reported. The current price is $110. The price will go up to $200 a year later.

Natural gas sells on the international market at over $250 per thousand cubic meters.

Natural gas is the primary winter heat source for households in Armenia. It is used widely for transportation in place of petrol. And it is used in thermal power plants to generate electricity. Officials at the gas monopoly played down the potential social impact of the price hike, noting the appreciation of the Armenian dram against the U.S. dollar in recent years.

New nuclear power plant on track

The construction of a new nuclear power plant in Armenia will foster energy integration in the region, said Marie Yovanovitch, the new U.S. ambassador to Armenia, at the presentation, on September 24, of a U.S.-funded feasibility report on the construction of the plant.

She added that the United States would continue to provide Armenia with technical support for the project.

The existing nuclear power plant - which provides 40 percent of the electricity used in Armenia - is supposed to be shut down by 2016 and to be replaced by a new one.

Armen Movisian, minister of energy and natural resources, said the plant would cost between $5.7 billion and $7.2 billion to build. It would have a capacity of 1,000 to 1,200 megawatts.

He added that Armenia was ready to supply electricity to all of its neighbors, including Turkey. Earlier this month Armenia signed a contract with the company that distributes electricity in eastern Turkey.

GDP, salaries grow significantly

Mediamax reports some statistics for the January to August 2008 period from Armenia's National Statistical Service:

Armenia's gross domestic product was 2.16 trillion drams ($7.15 billion), an increase of 10.3 percent over the same period in 2007.

The volume of industrial production stood at 496 billion drams, up 2.2 percent from the same period in 2007.

The average monthly salary was 88,983 drams ($300), an increase of 21.2 percent over the same period in 2007. Government institutions paid 62,721 drams on average, whereas nongovernmental pay averaged 110,154 drams.

Foreign trade turnover totaled 1.13 trillion drams ($3.3 billion) an increase of almost 25 percent over the same period in 2007.

Exports went down 4.8 percent to 213.4 billion drams ($697 million). Import volume totaled 799.8 billion drams ($2.6 billion) an increased of 36 percent. The foreign trade balance deficit was thus 586.4 billion drams ($1.9 billion).

Brandy production up, other alcoholic beverages down

Mediamax reports that, according to the National Statistical Service,

Brandy production in Armenia in January through July 2008 was up 16 percent over the same period in 2007. Armenia made 8,640,500 liters of brandy in those seven months.

The production of vodka and distillery products was down 3.6 percent over the same period, for a total of 6,559,900 liters.

Wine production was down 17 percent to 1,627,400 liters; sparkling wine production was down 42.7 percent to 100,700 liters.

Armenia welcomes more tourists

Mediamax reports that, according to the National Statistical Service,

The number of tourists arriving in Armenia in January through July 2008 was 207,479, an increase of 13.3 percent over the same period in 2007.

The number of residents of Armenia who went abroad as tourists in the period was 211,182, a 12.8 percent increase over the first seven months of 2007.

OSCE media watchdog asks Armenia to review license moratorium

The OSCE Representative on Freedom of the Media, Miklos Haraszti, on September 26 asked the government of Armenia to review a recently adopted amendment to the law on television and radio that introduced a moratorium on issuing new broadcasting licenses until 2010. Armenia plans to introduce digital transmission in 2010.

With a limited number of analog broadcast channels available, seven-year licenses are issued on a competitive basis. Since digital transmission will provide new challenges and opportunities to bidders, the government had argued that competition for broadcast licenses should wait until digital transmission was launched in 2010.

In a letter to President Serge Sargsian, Mr. Haraszti wrote: "By cutting off any potential applicant broadcasters from entering the market until 2010, the limited pluralism in Armenia's broadcasting sector will be further diminished."