YEREVAN, NOVEMBER 6, NOYAN TAPAN. The Armenian National Congress (ANC) on November 6 issued a statement, in which it expressed its opinion about the 2010 state budget of Armenia. The statement reads: "The Armenian National Congress has repeatedly warned that the steps undertaken by the Armenian government under the conditions of the financial and economic crisis are quite inadequate for the prevention or mitigation of the current negative developments. The result of ignoring numerous warnings is that even after attracting an unprecedented loan of 1.5 billion dollars from the outside world, Armenia surpasses all CIS countries and nearly all countries of the world in terms of the official index of its economic decline. In fact, the so-called preventive economic measures taken by the authorities are aimed at feeding, strengthening and maintaining the corrupt power system rather than at protecting the interests of the state and the citizens and at solving the existing problems. Throughout 2009, concealing its failures and inability to deal with any serious problem, the government - in various ways evading the law - changed the National Assembly-adopted law on the budget and, as a matter of fact, carried out shadow sequestration of the budget post factum. Under such condutions, the 2010 draft state budget, which ignores the real problems and challenges facing our country, has been developed and presented to the National Assembly. Thus: - About 25% reduction in revenues is envisaged as compared to this year, whereas economic growth is forecast for next year by the authorities. - Serious cuts have been announced in education (about 25%) and defence (over 22%) compared to 2009, whereas expenditures on maintenance of the state machinery have been left almost unchanged. - An extremely low and declining level of taxes is programmed in the taxes-GDP ratio, which in fact means that the authorities will not fight the shadow economy and corruption. - A huge budget deficit in the amount of 6.5% of GDP is envisaged. The Armenian National Congress states that for any authorities, this budget is a budget of their own mistakes and lack of foresight and their resignation. Being aware that the deepening of the economic downturn and the financial crisis, as well as the inadequate steps on their prevention are fraught even with the danger of a humanitarian disaster, the Armenian National Congress once again considers it necessary to present those principles and measures, whose use would only make it possible to mitigate the current hard situation which is expected to worsen: The principles of special anticrisis 5-year economic, social and financial programming should form the basis of the 2010 state budget. Realistic anticrisis measures rather than abstract and fairy-tale promises and judgements should be the pivot of the indicated program. These measures are: - To gradually increase the revenue collection level in this 5-year period, reaching a 22% level of the taxes-GDP ratio. - To adopt a list of tax and customs reforms and the respective documents, which should be aimed at introducing the principle of progressive taxation when the tax burden is moved from the consumer to the income consumer, from low-income consumers to high-income consumers, the well-off stratum of society. - To develop a package of system changes, which shall include a real program of anticorruption and antimonopoly measures and specify a fair economic competition atmosphere in Armenia. - Instead of encouraging elite apartment construction, to envisage programs on affordable apartments construction, including housing for young families. - To develop special programs on unemployment reduction, especially measures on the rehabilitation of local inter-village roads, infrastructure in rural areas and the development of communities, and to envisage their financing from the budget. - To allocate foreign loans for the extension of the demand rather than the supply and to stop crediting (giving guarantees to) the so-called "elite" developers, etc." According to the statement, ANC has its program of measures for overcoming the crisis, and in case of the existence of the respective political will and the adoption of several dozen laws and decisions, it will be possible to put the country on the development path again.

---