Armenia's new prime minister draws criticism over proposed reforms

By bne IntelliNews September 26, 2016

Armenia's new prime minister Karen Karapetyan has moved to revamp the economy and urban development ministries in his first week in office, drawing criticism from the ministers in office. Economy Minister Artsvik Minasyan has reportedly expressed his intention to resign, Hraparak daily newspaper reported on September 23.

Karapetyan was appointed prime minister on September 14 following the resignation of his predecessor Hovik Abrahamyan. He is largely respected in Armenia and draws on an extensive experience in corporate management at Russia's gas giant Gazprom. In his first weeks in power, he appears to have moved to enhance efficiency in public administration in Armenia, which has drawn some criticism from established politicians.

Karapetyan initiated a bill to rename the economy ministry into the investments and business support ministry, in an attempt to transform the institution into a catalyst for foreign and domestic investments. “I want to make it clear to entrepreneurs and investors that there is an agency to which they can present their grievances, demands, objections and advice,” he reportedly said during a cabinet meeting, according to Radio Free Europe/ Radio Liberty (RFE/RL)'s Armenian service.

Minasyan is reportedly slated to be replaced because he is not business-savvy enough, and is likely to be reappointed as environment minister. He publicly criticised Karapetyan's decision to revamp the ministry by changing its name and removing some of its responsibilities - such as those of overseeing the tourism and aviation sectors. “The economy is not just about investments and support for entrepreneurship,” RFE/RL cited him as saying. The minister reportedly had a week of tense exchanges with Karapetyan over his decision to grant tax breaks to a private company. Minasyan's party, the Armenian Revolutionary Federation, came to Minasyan's defence, accusing the new prime minister of political showmanship. 

Another ministry that Karapetian is seeking to change is the urban development ministry, which he suggested be turned into a committee on architecture and heritage preservation. Culture Minister Hasmik Poghosian criticised the move by saying that merging urban development and cultural preservation could jeopardise preservation efforts.

In a frank speech on September 22, Karapetyan also decried public employees' abuse of procurement services like travel tickets, and said that he will institute an electronic platform to crack down on “theft” of state funds. He did not elaborate on the officials who he believes perpetrated the theft and the extent of it.

Meanwhile, Haykakan Zhamanak daily reported that the new head of government is working on the 2017 state budget, most of which was decided before he took power. The country's state revenue committee reportedly informed him that it would be unable to raise the AMD1.14bn (€2.16bn) in revenues from taxes, as stipulated in the tentative budget draft. As such, the government would have to readjust its spending. 

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