Prime Minister Nikol Pashinyan’s final speech at the National Assembly during the discussions of the draft state budget 2023
Dear Vice President of the National Assembly,
Dear members of the National Assembly,
Dear Cabinet members,
First of all, I would like to thank you for the earnest discussions of the draft State Budget 2023 of the Republic of Armenia, which took place both in the joint session of the Committees and in different committees. Of course, both the Cabinet members and the MPs touched on various issues, and I would like make a few emphasis.
The first emphasis is that we are planning the tax revenue part of the 2023 budget, as already said, at 2 trillion 204 billion AMD, which, I want to emphasize, is by 946 billion AMD or 75.1 percent more than that of 2018. I want us to emphasize this fact. After 4.5 years, having passed through war and COVID, we are proposing a budget that is 75 percent higher than the 2018 budget.
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Moreover, defense sector expenditures are planned to amount 509 billion AMD, the increase is 113 percent compared to 2018, that is, more than double, and 47 percent compared to 2022. But the content behind these numbers is just as important, and I want to emphasize with pleasure that in 2022, at least doubling of the salaries of servicemen through voluntary certification will be launched. The Minister of Defense presented it in more detail yesterday, but we will have cases when the rise of the salary will be even close to three-fold. With this, we are transitioning to a professional army, we are making that transition.
In this context, I must emphasize the special importance of the reforms that we are implementing in the field of military education, emphasizing that our young people who will choose the military profession and graduate from the military educational institution will receive an appointment, at that moment they will receive an apartment which, after completing the service contract period, will become their property and which they will fully use, the right to use, I mean the right to alienate.
Of course, this is the visible side, and it should be emphasized that, yes, we have very serious problems to solve, including for improving our security needs. But I will also ask that we change our attitude so that we publish as little as possible information related to the army or which is considered classified informtion, or information that helps to reveal classified information. But we can emphasize that the process of reforming the army has kicked off and will gain momentum every month.
The increase of funding of the social protection field is 56 percent compared to 2018, but I also think that we should record a number of important purely factual circumstances. Basically, it will turn out that in the next two years we will have raised pensions in three steps, maybe even four steps. How? First we raised it in September, introducing also the cashback system in case of cashless trade, when pensioners do cashless trade, they get 10 percent of their trade in cashback. The next time the pension will increase is in the summer of 2023, in July, and the cashback system will also increase accordingly, because if the number goes up, 10 percent of that number goes up accordingly. It will turn out that we increase the pension in four steps in a year.
From the very beginning, there was such an idea or opinion that the pensioners’ refund system should operate for one year, but our attitude is that this system should work permanently. Moreover, I do not exclude, of course, it will be discussed that in the future we will put more emphasis on the non-cash system of increasing pensions. Why is this important? You know that despite the fact that we have significantly increased the tax revenues, it is also no secret that there continues to be a huge shadow economy in our country. And we were also discussing our actions with Deputy Prime Minister Mher Grigoryan, and he proposed a good formula, that with encouraging this non-cash system, we offer our esteemed pensioners to help us generate the necessary income to increase their pensions, because pensions, which are tens of billions of drams every year, a part of these pensions is obviously spent in the field of the shadow economy, and in the case of cashless trade, this is not possible. Therefore, we are confident here that additional tax generation will take place. I think this is really one of the most important reforms that we are implementing.
The next important innovation, which has been in effect since 2022 and will continue, is about providing financial support for the birth of the third and every subsequent baby. I am happy to report that according to the results of the first ten months of this year, around 8919 babies receive this support. We hope that the number of these babies will grow at a very high rate. This is also facilitated by the fact that in case of the birth of a baby in the family and for newly formed families, we implement a mortgage program for the purchase or construction of apartments, which is also very important.
The opposition is constantly talking about inflation. Yes, no one denies, and we must also record that inflation is a global phenomenon. Moreover, Armenia has a much lower inflation rate compared to many other countries. But I also want to emphasize the following: how one should fight against inflation? by increasing incomes, increasing salaries. I have to emphasize again that since May 2018, 143,000 new jobs have been created in Armenia, and according to the data of September 2022, the salary fund in the country has increased by 73 percent and the average salary has increased by 46.1 percent. This is very important. In other words, if we are talking about inflation, we should also emphasize the increase in people’s incomes.
The health sector has already been talked about. Compared to 2018, the healthcare funding will grow by 87 percent in 2023. The salaries of medical workers in polyclinics and rural clinics will increase, by 40,000 AMD in avarage, which is 20-23 percent. But in this salary policy, starting with the armed forces and continuing with health care, it is important for us to set new quality standards at the same time. In other words, we do not consider it correct to directly raise salaries without setting new quality standards and criteria.
And this change will take place in the healthcare system as well, because you know that from January 1, 2023, that is, one and a half months later, only certified healthcare workers will be able to work. It’s a system of attestation where we all have to be sure that if we pay someone as a doctor, they have the appropriate qualifications. But I must also say that in the field of healthcare, I think, another very significant, if not revolutionary, change has taken place. In the healthcare system, you know there is a state order system. We looked at the statistics and it was recorded that compared to 2018, according to the statistics of the first 10 months of 2022, 150 thousand more cases were served by state order. Can we imagine what a huge number this is? In other words, this means that 150,000 more operations were performed, treatment was prescribed, diagnosis was made, etc., and so on. This is, I believe, the most important figure we have to record in healthcare today. That is, 500 more people were served every day compared to the 10 months of 2017. This is a very important fact.
I should also mention an important moral change, that the family members of those who died for the sake of the motherland benefit from the state order system without any queue. This change also took place recently.
The next important highlight. in the field of education and science, the budget increases by 75 percent in 2023 compared to 2018. Here I must record that a very important reform is taking place. Much has been said about the voluntary certification of teachers. And this is one of our most serious reforms. It’s about doubling, sometimes even tripling teacher salaries, emphasizing that the government doesn’t decide how much a teacher gets paid, the government decides the range, essentially the teachers themselves decides how much they get paid. According to this logic, we have cases when a teacher’s salary has increased from 150 thousand to 400 thousand and more. Unfortunately, we don’t have many cases like this yet, because I have to report that the vast majority of our teachers have not used this system yet, but I also want to say that the system is already in place and they will have that opportunity. But I also want to emphasize again that regardless of the certification system, in 2023 we will increase the rates of about 4418 teachers of schools with up to 100 students, and those schools are mostly rural schools, so that as a result, in terms of the rate, there can be no teachers that will receive salary less than 90 thousand AMD. I mean, you know in the past we’ve had cases when teachers were getting paid 30 thousand, 40 thousand, even 25 thousand AMD because the rates, funding per pupil and other factors created this situation. This is also a very important change. This is separate from certification. If they also get voluntarily certefication, there will be an opportunity to double and triple their salary as well. Also, there will be a certain increase in the salaries of 8135 science teachers, regardless of certification, and they will receive bonuses with certain coefficients. But if the uncertified teachers get certified, these coefficients will increase and the rates will also be doubled based on these coefficients.
As I have said, we will implement our plan to build 500 new kindergartens and 300 schools. By the end of 2022, we plan to commission 24 schools and 53 kindergartens of this program, and by the end of 2023 – 64 schools, 141 kindergartens.
I consider it very important to emphasize what dynamics we have in the field of science funding. In 2023, 37 billion AMD is planned for financing science. 155 percent rise compared to 2018. In other words, we have more than doubled the funding of the science sector. For example, there are very important statistics. we have talked about the system of raising the salaries of researchers. For example, instead of 140,000 AMD in 2021 and before that, the head of the laboratory now will receive 350,000 AMD starting from January 2022. The salary increase system is already in place and will increase until 2025, reaching 477 thousand AMD. In other words, as you can see, here also we are talking about tripling the salary. But in 2022, we already more than doubled it. I mean, this is very important. we say we are tripling, we don’t say that we are raising by 3 percent now, we will raise the remaining 97 percent in 2025. We, on the contrary, raise the overwhelming part now, the smaller parts later. This is about laboratory assistants, heads of laboratories, researchers.
But there is a much more important or equally important statistic. I want to talk about how much funding has been allocated from the state budget for the purchase of scientific equipment in recent years. For example, in 2021, this number was 2 million 704 thousand euros, and only in 2021, the amount allocated from the state budget for re-equipping centers with scientific equipment was more than in the previous 10 years. In other words, in one year, we allocated more funds for the purchase of scientific equipment in 2021 than in the previous 10 years. But this is not all. In 2022, we have more than doubled that number. In other words, we provide 7 million 263 thousand euros, and the 2023 budget provides 10 million for the purchase of scientific equipment. It is clear that we don’t take that state-of-the-art scientific equipment and put in a dilapidated room, isn’t it? It involves a major overhaul of all its property and equipment. If we acquire property worth 10 million euros, scientific equipment, it’s clear that we make respective expenses for chaning the environment.
I want to specially address it, because recently there has been a lot of discussion about the developments taking place in the field of sports. The 2023 budget provides 5 billion AMD for sports, which is an increase of 69 percent compared to 2022, and 163 percent compared to 2018. By the way, there are again very important statistics that I have to present to you: you know that in 2019, in the context of our sports policy, we have significantly improved the fees of athletes, doubling and tripling in many cases.
Now we are implementing a new program, which, I think, is unprecedented, at least in terms of volume: we pay a fee of up to 500,000 AMD to potential participants of 2024 Paris Olympics just for participation in Olympic games. And today, for example, the number of sportsmen receiving payments up to 500 thousand drams is 225, we have 70 sportsmen who receive payments from 550 thousand to 1 million drams monthly, and 58 athletes who receive 1 million drams or more. Let’s see the result. In 2022 the Republic of Armenia recorded an unprecedented sporting success and has won 289 medals of the World and European Championships, of which 101 are gold, 66 are silver, and 122 are bronze.
I mean these budget expenditures bring with them concrete results. When I say that 70 athletes get this much, 58 athletes get this much, we are talking about people known to all of us, it’s not correct to publish individual data and it should not be published, but this means that there is no athlete known to us, who receives no specific financial support from the government. What’s more, we have made a decision and you know that there are also end-of-year payments in addition to this monthly payment, and this year, for example, in 2022, the first place athletes of the World Championship will receive 10 million AMD instead of the previous 5 million AMD, the second place, silver medalists – 7 million drams instead of 3.5 million, 3rd place winners – 4 million drams instead of 2 million drams, and champions of the European Championship – 6 million drams instead of the previous 3 million drams, 2nd place winners – 2.6 million drams instead of 1.8 million drams, 3rd place winners – 2.6 million drams instead of 1.2 million drams. This, I think, is a very vivid expression of the changes that have taken place.
Dear colleagues,
One of the most discussed topics that was a subject for criticisms in recent years is the dissolution of the Ministry of Agriculture, about how there can be agriculture in the country without the Ministry of Agriculture. But I want to emphasize that according to 2023 budget, the expenses of the agricultural sector amount to 38 billion AMD, which is 300 percent more than the funding of the the Ministry of Agriculture in 2018. And as I have already said from this rostrum, we are not now distributing diesel fuel to people, so that from up to 20 liters intended for them, it becomes 2 liters, or maybe 7.5, or even 10, but we implement development programs in agriculture, which is the only way to finally stop the decline of our agriculture. I have to record that also in 2023 this funding increases by 20 percent compared to 2022.
I am happy to report that we have finally succeeded in starting the pet stamping program, which is a very important issue for the development of agriculture in the country. I will bring an example why it is important. Because we don’t know, for example, how many cattle there are in our country. We say food security, food security so much, but it is not just a title, there should be specific data under it, we should know how many beef we have, how many dairy animals we have, etc. I hope that this program will be successfully implemented and completed.
In the field of security, I must also emphasize that we will implement the certification program, as we have already announced. The Patrol Police was mentioned here. I already said about the armed forces that I think that topic has been resolved, but let’s also say that it won’t happen in a day, people need to reconfirm their qualification, if they don’t meet, then get the appropriate qualification. The mechanism of at least doubling of salaries in Police, National Security Service, State Protection Service, Rescue Service and also in the field of Penitentiary Service should be implemented through voluntary certification.
I mean this should happen in all these areas. For the year 2023, I said, I will repeat again, a very important institutional change is taking place. With your support, the State Protection Service will become a body subordinate to the Prime Minister of Armenia, because now it operates within the National Security Service, and a Foreign Intelligence Service has to be created. And I hope that our colleagues in the parliament will support the government in solving these issues.
The minister has already announced that this year we have implemented and completed the asphalting project of 500 km of roads. And I am happy to emphasize that we are now not only seeing the asphalting of the roads, but also not too much, but some continuous quality improvement. I say again, very small, we are still very far from the normal international standard, but we are moving forward with very small steps. It is clear that in 2023 asphalting project of another 500 km should also be implemented. And also in this regard, I must emphasize that it is true that in our capital expenditures, the capital expenditures in the defense sector are also calculated in general, but I must emphasize that the increase in non-defense capital expenditures is also significant, and we have a 190 percent increase in capital expenditures compared to 2018. Of course, compared to 2022, by 36 billion AMD more will be spent.
A very correct criticism was made here by the representative of the opposition that we have a problem of under-performance of capital expenditures. But I want to emphasize again, one of the reasons for this is that Armenia has not had a normal economy for many years. Today, the government’s capital expenditures are carried out by the private sector, that is, the government does not do asphalting works, the government gives money to the asphalters. It turns out that there are not enough construction companies to fulfill the government’s orders.
We give 231 billion AMD, we say build roads, build schools, build kindergartens, but people are unable to build, and the government is forced to bring back to the budget, redistributes it again. But what is the reason for this? Because for many years people in Armenia had to have a “permission” to open a construction company, had to have a “permission” to win tenders and so on. Today, a new source of scandal has been found: “a company connected to the government won another tender”. And what if we start saying how many people connected with the opposition win tenders. Half of those tenders, more than half, are still won by the companies created as a result of the monopoly of the previous government, and they are even sabotaging. Even strategically important road works are being deliberately slowed down. Who do you blame for that? There is a company, which belongs to a member of your leader’s family, that won tenders worth billions. Let’s go and see how these tenders are carried out. And still they criticize the government for the implementation of capital expenditures. Maybe that’s why you’re saying don’t do those things, so that in the end, you can say that the government doesn’t implement the capital expenditure program.
Dear colleagues,
In fact, time is running short, and I also hope to address that during the Q&A session, because I also have one or two important clarifications regarding the security environment. But summarizing this economic component, I also want to give the following information about subsidy programs.
Again, we promoted the subsidy programs. In 2018, it was 2.5 billion AMD, and I remember at that time, I made a decision and said to give 5 billion AMD to the communities. The communities were able to realize the 2.5 billion AMD somehow. In 2023, we allocate 22 billion AMD for subsidy programs. That is, in fact, we increase these subsidy expenditures 9-folds. Today, whatever construction, whatever investment you see in the regions, in fact, at least 85 percent, if not more, is done with the financial support of the government.
Moreover, I said that recently in the party environment, but I also want to say it here. I think it is very important that we do not consider whether the head of the given community is from the ruling party or the opposition party. But look where we have reached, can the head of the community also be from the opposition party?
No one can say that the government is less caring towards a community headed by a representative of a non-ruling party. Yes, in the communities with leaders of both the opposition and the “Civil Contract” party, whatever construction, whatever investment you see, at least 85-90 percent of all those investments are initiated and financed by the government, because we are in a stage where we believe that, yes, the Republic of Armenia must be built anew and the Republic of Armenia is being built anew.
The peace agenda is essential for the implementation of this program.
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Then, during the National Assembly-Government question-and-answer session, the Prime Minister touched on the NK problem, the peace agenda and other topics. In particular, Nikol Pashinyan noted. “Taking this opportunity, I would like to address the opposition’s criticism of us, that our statements and positions regarding the Nagorno-Karabakh issue are not specific and are elusive. This was the assessment. If I could understand this kind of assessment just a month, a month and a half ago, today I cannot accept and understand it. Why?
I think that the statement made by the President of the Russian Federation at the “Valdai” discussion club was very important and essential for us to bring clarity to a number of issues and record that, at least in the political field of Armenia, there is almost consensus in terms of these approaches.
I want to remind you what the conversation was about. It was about what the attitude of the Armenian government is regarding the proposals of the Russian Federation. And the essence of that proposal, as it was later revealed, was as follows: Postpone the issue of the status of Nagorno Karabakh indefinitely. At the time when this issue was raised about the Russian proposals, the government, of course, reacted very quickly, but both in the opposition field and in Nagorno-Karabakh there were demonstrations and statements demanding the government to accept the Russian proposals.
And I can say now that the government had accepted this agreement a long time ago, since January 2021, but we did not talk about it purely out of political correctness. And I am thankful to the President of the Russian Federation for giving us the opportunity to clarify the issue. And if the position of our government is “elusive”, in fact, our position today is what the opposition demanded from us, not knowing that we had adopted that position long ago. The National Assembly of Nagorno-Karabakh, perhaps not being sure that we had adopted that position long before – why do I say not being sure? – because I had shared that position with the President of Nagorno-Karabakh a long time ago, and that information should have been recorded there. If the opposition now has a different opinion and considers that Armenia should reject Russia’s proposals, it would be right for them to announce it loudly.
The next issue is the following: I want us to assess what the security situation is like in our region. I have to say that yes, at the level of announcement, we see some tensions, but also taking the opportunity and perhaps feeling guilty in retrospect that we didn’t share all the information with the public due to known circumstances and taking advantage of the opportunity that the field for public discussion has expanded after the events known to all of us, I want to make a few points.
First, what is the progress of the peace treaty negotiations? You know that the Republic of Armenia has conveyed our comments and proposals to the Azerbaijani side in Washington, in fact, our text regarding the peace treaty, and we are waiting for Azerbaijan’s reaction. In terms of those reactions, I must say that, however, we also see certain tendencies of tension. That tension is also related to specific events and specific situations.
You know that the position of the Republic of Armenia is clear, that the troops of Azerbaijan must withdraw from the occupied territories of Armenia to the positions that existed prior to May 11, 2021. In fact, the international community supports this position of ours. We hope that the CSTO will also support this position of ours. Of course, the situation is strange, because it seems that it should have been vice the versa. The CSTO should have made a clear defense and we should have worked with other partners to shape a position, but now we have the exact opposite. I hope that we will record this consensus during the CSTO summit to be held in Yerevan on November 23. This is a principled decision and position for the Republic of Armenia.
I want to be very clear. we do not want to provoke CSTO-Azerbaijan war. No. We say that the political position, perception of the CSTO of this situation and what political position the CSTO records in relation to this situation, is extremely important for us.
And I think that the attitude of the citizens of the Republic of Armenia towards the CSTO and the future of our relations will be connected with this issue.
But coming back to our position, I have to say that if I try to translate what Azerbaijan says is the following: Azerbaijan has such a position that before 2021 and before May there are territories that, so to speak, Armenia has occupied and if there is a problem and they think that Armenia, in its turn, should leave those territories.
I have not spoken publicly about this before, but I want to tell you our position now. We say very well, let’s understand that if the Republic of Armenia has to leave some territories, what are the borders that Armenia should leave, i.e. from where to where should it go, and if we understand, clarify that border, it can be a very acceptable conversation for Armenia, because for example, it is clear that we take the border of the Soviet Union, and if Azerbaijan says that Armenia, for example, in the northeast keeps some territories of Azerbaijan under occupation, it means that there is some kind of territorial division, there is a border, there is a line.
We say very well, show us the line, show us the map, and it can be interesting and we do not reject it, also because in those same areas, the majority of the territories of the four Armenian villages are occupied. I can give a concrete example, for example, about 70 percent of the arable land in Berkaber village of Tavush Province is occupied, about 70 percent of the arable land in Paravakar village is occupied, and the arable land in Aygehovit and Vazashen villages is occupied. It took place in 1991, in 92-94.
I think we need to talk about these issues more publicly now. We say very well, show the map, show the border line and show what is the legal basis for the border line you have shown. In that case we are ready, as I said in one of my last interviews, to develop the situation along the entire border so that there are no Azerbaijani or Armenian occupied territories. We are ready to go to those solutions and I am ready to assume that responsibility for that. I want both the Armenian society and the international community to record this, on the condition that those of our dear compatriots, who do not have a very good understanding of the map, do not immediately rush to give assessments, because it is about restoring the territorial integrity of the Republic of Armenia covering 29 thousand 800 sq km, and not the opposite, not about surrendering.
The next issue is related to delimitation. you know there are processes going on. Actually, what I said is the continuation of this, we hoped and there was an understanding, and we still think so today, that the border delimitation should have been completed by the time the peace treaty is signed or enters into force. Now there are some signals that maybe it is not so realistic, but on the other hand there is a solution there. Again, we propose to take the line that actually existed in 1990, carry out a simultaneous withdrawal of troops, create a monitoring mechanism, not have the troops in the border area at all, hand over that entire area to the border guard service, record at least the understanding of the border line, and proceed to the delimitation process under peaceful conditions, which may indeed take many years.
Our position regarding the peace treaty is as follows. there are two approaches: a detailed approach and, so to speak, a framework agreement model approach, which draws the framework without too many specifications. Experience shows that if we try to solve very detailed issues, we can have difficulties. This is the reason why the Republic of Armenia proposed to sign a peace framework agreement, to sign a treaty, and this is an accepted practice, and we must work, we must try to go this way.
Returning to the criticism addressed to us regarding the Nagorno Karabakh issue, we say again that accepting the Russian position is also the reason why we put forward the issue of not the status, but of ensuring the security and rights of the Armenians of Nagorno Karabakh. Like in 2018, we believe that the number one interested party of that dialogue should be the subject of the dialogue, I am talking about the Armenians of Nagorno Karabakh, our compatriots. We hope and there is an understanding among the international community that an internationally visible dialogue should take place between the representatives of Nagorno Karabakh and Azerbaijan, which should be about the rights and security of the Armenians of Nagorno Karabakh.
And also the fact that we agree to separate the issue of Armenia-Azerbaijan relations from addressing the issues of Nagorno Karabakh Armenians, the rights and security of Armenians, does not mean that we agree to remove that issue from the agenda, I mean the issue of security and rights of the Nagorno Karabakh Armenians, and if we we solve that issue, of course the Republic of Armenia is ready to sign a framework peace agreement with Azerbaijan on the basis of mutual recognition of territorial integrity and sovereignty.
In general, this is what I wanted to say, in addition to addressing the opening of communications in the region. I say again that if the issue of opening communications for Azerbaijan is not an occasion to seek escalation, but to really create, reconstruct, build communications, we can consider that issue resolved. I also think that, in general, we have developed what we have to say to the point that we can go to concrete solutions, we just need to really work towards those solutions and not simply record that we met again with meetings.
In general, this is what I wanted to say, also addressing the opening of communications in the region. I say again that if the issue of opening communications for Azerbaijan is not a pretext to seek escalation, but to really create, reconstruct, build communications, we can consider that issue resolved. I also think that, in general, we have developed our position to the point that we can go to concrete solutions, we just need to really work towards those solutions and not simply record that we met again in the statements of the meetings.
At the same time, there is an idea, I think that this idea should be addressed, that, you see, in meetings at high or highest levels, we often do not manage to delve into all the details of the issues, and I think that we should also consider the option that at the expert level, more work should be done, then the results of that work should be fixed at a high level, and then final decisions will be made at the highest level. I think that forming such negotiation platforms is one of the most important things to do in the near future, which will enable us to really establish long-lasting and stable peace in the region.
Thank you.”
INFORMATION AND PUBLIC RELATIONS DEPARTMENT OF THE OFFICE OF THE PRIME-MINISTER OF THE REPUBLIC OF ARMENIA