Armenia: Flying Blind With $400 Million Defense Budget


Nov 10 2011

Where does the need for state secrecy end, and the public interest in
governmental transparency begin? That’s a question posed increasingly
by Armenian civil society activists in reaction to news that Yerevan’s
defense budget is increasing by 5.6 percent.

On November 1, parliament increased Armenia’s 2012 military budget
to 150 billion drams (about $400 million) — the country’s biggest
annual defense outlay ever. But how exactly – and how efficiently
— the ministry will spend those additional funds is proving to be
anybody’s guess. Defense spending has long been considered off limits
to public scrutiny.

Few Armenians question the need for a strong military; the country
has a wobbly cease-fire with Azerbaijan over the disputed territory
of Nagorno-Karabakh. Energy-rich Azerbaijan’s military budget stands
at a massive $1.76 billion (over 1.38 billion manats) for 2012 – an
amount that makes many Armenians wonder how their government plans
to make the best use of Yerevan’s far more limited financial resources.

“In a state of frozen war with Azerbaijan, when the opponent’s budget
is six times bigger than Armenia’s military budget, a question
keeps coming up: ‘How are they [Armenian officials] spending that
small budget of ours?'” asked Emma Hunanian, a representative of a
non-governmental organization, Soldier and Right, that lobbies for
army soldiers’ interests. “Not always are we given the answer to
that question.”

Defense Minister Seyran Ohanian told parliament that the additional
funds would be spent on “increasing the number of professional soldiers
and the acquisition of new arms and armaments.”

Any other information is considered out of bounds for public debate.

The Chamber of Control, which monitors Armenia’s state budget,
periodically makes outraged statements about various government
offices’ financial wrongdoings, but it has never publicized any
information about the Defense Ministry’s spending habits. A 2010
audit of the ministry was deemed “strictly classified.”

One civil rights group’s attempt to get answers about the ministry’s
budgetary practices met with a broad roadblock. “We were asking for
data about the share of the military budget that’s spent on provisions,
stationery and household equipment, which cannot be a state secret,”
recounted Artur Sakunts, head of the Vanadzor office of the Helsinki
Citizens’ Assembly. “However, even through the courts, we were unable
to acquire information. It’s a state secret, and there is no way
around it.”

Defense Ministry spokesperson David Karaperian responded that it is
only natural for the ministry to keep information about its budget
and spending practices classified. “We work openly to the extent that
it isn’t threatening to our national security,” Karaperian said.

But the ministry risks losing public trust by operating in such a
closed system, objected Varuzhan Hoktanian, executive director of
the Anti-Corruption Center, the Armenian affiliate of anti-corruption
watchdog Transparency International. “Questions keep coming up with
each passing day, and that lack of trustworthiness can be more damaging
than working openly,” Hoktanian said.

The deaths of 23 army conscripts this year in non-combat-related
incidents have raised a major wave of general public distrust toward
Armenia’s army, as well as calls for the resignations of President
Serzh Sargsyan and Defense Minister Ohanian.

While opposition political parties have joined in the cries of outrage
over the non-combat deaths on conscripts, they routinely sidestep
discussions about the military’s budget. Opposition Heritage Party MP
Armen Martirosian, a member of parliament’s Financial and Budgetary
Committee, commented that he is convinced that “the budget is spent
mostly appropriately.”

“Risks of violations of the law and corruption are somewhere else;
for example, commanders abusing their position demand bribes, start
businesses, but the budget expenses are mostly incurred as planned,
” Martirosian asserted.

Independent military expert Artsrun Hovhannissian, a former Defense
Ministry employee, meanwhile, asserted that officials are for the most
part responsible in their procurement practices. Research that he has
carried out over the past decade shows that “although there have been
certain cases of financial abuse and administrative shortcomings”
in military spending, such abuses have not been “to an extent which
could put the country’s military effectiveness at risk.”

He conceded, however, that “[t]here certainly is a need for creating
some control mechanisms, in order for the monies to be put to their
best use.”

Sakunts scoffed at the notion that Defense Ministry officials can
be trusted, and that no oversight mechanisms are necessary. “There
are no signs of trust-inspiring [behavior] that make us believe [the
ministry] has no corruption issues,” he said. He cited a report from
one unnamed expert who alleged that the ministry was reporting an
official purchase price for “a type of military equipment” that was
more than five times the amount actually paid.

Acting out of a spirit of “ostensible patriotism” and declining to
hold the Defense Ministry publicly accountable for its expenditures
“might have irrevocable consequences for the development of our
military force,” he added.

Countered military analyst Hovhannisian: “[W]e are in a state of war
and the demands of making everything transparent are not justified
in this case.”

Editor’s note: Gayane Abrahamyan is a reporter for
in Yerevan.