“If they subsidize by means of tax pressure, it will lead to worsening the business environment that is bad as it is,” Andranik Tevanyan, the director of Political Economy, a research institute, said in response to a question of www.aravot.am whether the solution offered by the Prime Minister at the Cabinet meeting would alleviate the consequences of an increase in gas prices. Let us remind that yesterday Tigran Sargsyan stated that the Cabinet would subsidize 30% of the gas price. The Prime Minister made a written request to the Public Services Regulatory Commission. T. Sargsyan also said that they would support needy families, in order to alleviate the impact of an increase in gas prices on these families.
Continuing, A. Tevanyan stated that subsidization would have a negative impact on tax payers, since if they would subsidize from the treasury, someone would have to pay for that. Mr. Tevanyan also reminds: “Whereas they promised that no such thing would happen. Firstly, subsidization is regarded as a wrong policy, and secondly, it was stated that there wouldn’t be an increase in gas prices. It is no accident that the increase in prices started after the end of the electoral circle. The process has been there for a long time; they have just put it off until after the elections. The most important thing here is why the prices had to change
to such an extent. This issue hasn’t been considered from the economic perspective. Then another nuance; it was stated at first that gas prices would rise by 67 percent. If they will subsidize 30 percent of it, then it is clear that the rest will increase.
“Although they state that the needy class will be compensated for the gas price, they deliberately hush up the fact that goods and services related to use of gas – bakery products, pastry products etc. – will become more expensive in parallel.” According to A. Tevanyan, “The government has presented the people with a fait accompli.” He described the current Cabinet as follows: “They are one of the worst Cabinets of the Republic of Armenia and the worst Prime Minister, having absolutely different initial conditions.” Hakob Hakobyan, the chairman of the National Assembly Social Affairs Commission, stated in response to our question that it depended on how it was subsidized and what social stratum was subsidized. Then he said that he didn’t know based on what principle they would subsidize. H. Hakobyan considers showing support to be a political principle and notes: “For example, to help a man buy cheap goods or to give money to a man and tell him to go and buy expensive goods in the market. One can decide which is right only as a result of an economic analysis.”
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We inquired whether initial steps of the Cabinet were right and purposeful. H. Hakobyan replied: “The Cabinet cannot leave our society that is beyond the poverty line as it is helpless, now can it?” Mr. Hakobyan doesn’t link the increase in gas prices with the elections and considers it a coincidence. “We had a different dollar/dram correlation in the past. When gas was priced $180, at that time a dollar was equal to 380 drams, the dollar has never devalued; moreover, it has become 415 drams. Therefore, that damage should be compensated; the damages of the company should be compensated.” In response to our question why it had to be done at the expense of an ordinary citizen, H. Hakobyan said: “At the expense of the citizen and for the benefit of the citizen.”
Tatev HARUTYUNYAN
