Azernews.Az

By Gunay Camal

The high unemployment, falling incomes, and reduced economic activity seem to be ever-lasting in Armenia. Job loss and falling incomes force families to forgo education of their children, while at times even do not allow to feed them normally.

Also, depressed consumer spending as well as high bureaucracy accompanied with a corruption obstacle for creating small businesses,making larger companies reduce their spending or just close the doors.

Amid the deepening economic crisis, Armenia’s Prime Minister Hovik Abrahamyan urged the heads of state agencies to shift to a strict regime of economizing, news.am website reported.

He told the heads of Armenia’s executive bodies that the government should reconsider the middle-term expenditures, instructing to reduce the expenditures that have no significant impact on the overall result and the regular activity of the agencies.

Stressing that it is necessary to shift to a strict regime of saving and reducing the expenditures of the state governance system, Abrahamyan urged the heads of state agencies to take additional measures to raise the activity effectiveness of the institutions headed by them.

However, the government of Armenia with its policy of "belt-tightening" should not expect series results, as in reality its application is selective, local media reports.

Such tools as reduction, savings, punishment and control used by the government looses its effect when they are applied selective: one can do everything, others are prohibited. And it turns out that part of the belt must be tightened by weakening the other.

For example, at a time when the policy of "belt-tightening" is announced, Ministries of Finance, Economy and State Revenue Committee arrange a “feast”. Local media reports that the salary and allowances in these three institutions amount to about 460 million drams ($965,615) in total, while the amount of remuneration of employees is 960 million drams ($2,015 million) in total. It turns out that staff of these agencies every month receives three salaries.

No one knows for what services and activities they are so generously paid if the country’s economic policy failed.

Meanwhile, the newspaper "Zhoghovurd" writes that the purchasing power of the Armenian population decreased by 38,188 billion drams for over the past two years. In other words, in January-May 2014 the people of Armenia spent 38 billion darms ($80,163 million) more than this year.

In past years, the purchasing power of Armenian residents was gradually growing thanks to transfers from abroad. Over the past year and a half the volume of incoming transfers to Armenia reduced by about three times, and it continues to decline.

Also, the number of unemployment in the first quarter of 2016 made up 19.3 percent of able-to-work population.

Earlier, Chief Treasurer of Armenia Atom Janjughazyan stated that a reduction of approximately 4 percent in the retail trade turnover happens because citizens prefer to consume less and save more, Chorrord Ishkhanutyun newspaper reported.

The newspaper made a sarcastic statement on the subject: “We naively believed that the citizens have less money, so they spend little. It turns out that amount of money did not decrease -- people just prefer to save. That is, they become stingier. They all decided to go on a diet and eat little, therefore, the amount of food consumption decreased. And, in general, all figures, represented by the National Statistical Service are brilliant, just people are guilty! The unemployment rate rose because people are lazy; volumes of direct investment decreased as people become more cowardly - they have money, but are afraid to make investments. And the volume of migration grows as the curiosity to see what is in other countries has dramatically increased.”

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