Azernews.Az

By Mushvig Mehdiyev

Investments in Armenian economy are incessantly decreasing on the background of the economic stagnation in the country.

The Armenian parliament is currently discussing the draft 2015 public budget and want to submit it for voting as soon as possible. Head of the Armenian National Congress parliamentary fraction, Levon Zurabyan, said on November 13 that the members of his fraction will vote against the draft budget.

The budgetary document envisages to increase the expenses to $126.4 million in 2015, which surpasses this year's budget expenses by 4.2 percent. Nearly $99 million out of the total expenses will be allocated to raise the salaries, while about $14.5 million and $12 million will be distributed for price hike in energy carriers and capital investments respectively.

The draft budget obviously shows that not only government investments, but also the private investments decreased in Armenian economy.

"Our economy sees a free fall now compared to the economies of the neighboring countries. The total government and private investments fell by 1.8 percent during the first six months of this year, " Zurabyan said.

He added that the capital investments in Armenian economy made up 23.7 percent of the GDP, while it dropped off to reach 20.5 percent in 2013.

The 2014 Index of Economic Freedom, an annual guide published by The Wall Street Journal and Washington's famous think tank The Heritage Foundation, covering 10 freedoms from property to entrepreneurship in 186 countries, reported Armenia as a moderately free country for freedom in the fields of investment, business, trade, finance and government spending. The report revealed that foreign investment in Armenia was unfavorable due to bureaucratic barriers and non-transparent regulations. Moreover, widespread corruption, unfair judicial system, as well as the unequal attitude towards the business make businessmen think twice before investing in Armenian economy.

Mikael Melkumyan, Deputy Head of the Parliamentary Commission on Economy, said the approval of a draft 2015 budget will lead Armenia to a banana republic - a small economically dependent country, which is typically ruled by a dictator.

"Armenia's future depends on the real innovations in science and production. Draft budget for the next year eliminates these possibilities," Melkumyan noted.

Labor productivity is extremely low in Armenian economy, Melkumyan said. "Current indicator of the labor productivity in industry is $100 per capita," he added.

But what's going on behind the curtain in Armenia amid the hot debates on controversial draft budget? The government spends huge money - over $1.8 million -- to buy flats for public officials, according to local media.

The Zhoghovurd paper claimed that the government has allocated about $311,000 to the police, approximately $840,000 to the prosecutor general’s office, as well as $126,000 to the state protection service and roughly $74,000 to the ministry of finance to provide their employees with new apartments.