168: “Free” loans in exchange for electoral votes. support or political?

The closer the elections are, the more the political power opens the state’s pockets to solve its political problems.

The other day, they came up with another pre-election initiative. just 2-2.5 months before the elections, the Minister of Economy, Gevorg Papoyan, hastened to announce that farmers will soon be granted zero percent agricultural loans.

Naturally, there are no zero interest loans. This means that the burden of paying the interest on these loans is fully borne by the state budget. They will be subsidized at the expense of the taxes paid by all of us.

It is clear to everyone why they decided right now that they should provide interest-free loans to the peasants when there are elections. with this, the political power solves political problems for itself, at the expense of state funds, attracting the peasants to vote for the ruling power during the elections.

This obvious pre-election initiative will be presented as support for the agricultural sector, but when the initiative implemented at the expense of state funds is announced right on the eve of the elections, it inevitably takes on a political tone as an impulse aimed at the electoral period and a targeted intervention aimed at certain groups of society.

Providing zero-interest loans, which implies subsidizing interest at the expense of the state budget, actually means that public funds are used to improve the financial conditions of a certain social group at the very moment when that group needs to make a political decision.

Such a coincidence, even without direct evidence, raises a legitimate question: is this a direct support for agriculture or a pre-election bribe to farmers?

On the eve of the elections, they are going to interest the peasants with interest-free loans, when without it, the peasants are squealing under the loans. They boast that they have implemented projects worth billions of drams in agriculture, but there has been a decline in agriculture for years. Meanwhile, at one time Nikol Pashinyan announced that they are going to develop agriculture at a revolutionary pace in Armenia.

“The use of new technologies should also be widely spread in the field of agriculture, in this case also having as a strategic goal the sharp reduction of the number of uncultivated agricultural lands and, ultimately, the exclusion of the existence of such lands,” Nikol Pashinyan made this statement almost 8 years ago, when he assumed the position of the head of the government. In these 8 years, the governments and political authorities led by him have achieved success in terms of developing agriculture at a revolutionary pace and reducing the amount of uncultivable land, not to mention eliminating the existence of such land, is in front of everyone’s eyes.

Even today, almost 50 percent of arable land in Armenia remains uncultivated. According to the latest data, only 220-230 thousand of the available 446 thousand hectares of arable land are under cultivation.

Nothing has changed here in recent years, instead, the authorities are trying to create the impression that they have achieved great success in agriculture. They think that by building several greenhouses, they are developing agriculture. Eight years ago, the share of agriculture in GDP was much higher than it is now.

The weight of agriculture has almost halved in eight years. 2017 It was 15 percent of GDP, last year it was only 7.9 percent.

It is so, because in 2018 after that, agriculture was almost always in decline. In 2021, the reduction of the gross output of the sector reached about 8 percent. 2022 to some extent recovered, but foundations for sustainable growth were not created.

In the following years, the same trends were maintained, without creating an opportunity to compensate the losses of the previous period.

This situation shows that the management of the agricultural sector has failed for years, on the eve of the elections they decided to bribe the villagers with interest-free loans in order to vote for the ruling political force.

Loan interest subsidization means that the state takes over the financial burden, reducing the borrower’s expenses at the expense of the budget. But they forget that the problems of peasants and agriculture are not limited only to financial ones. Inefficiencies in irrigation systems, limited access to markets, product sales problems, and climate risks continue to limit the development of the sector. Under these conditions, even zero-percentage loans cannot be a guarantee for increasing the farmer’s income.

Moreover, it can have the opposite effect. Giving in to the temptation of interest-free loans, people can find themselves under a new credit and debt burden. With this, the debt burden of many people can deepen at a faster pace. Besides that, today the peasant is heavily burdened with loans.

So, the interest-free agricultural loan, which they are going to offer on the eve of the elections under the name of “free” assistance to the peasants, can actually cause new risks and problems for the peasants. Not taking into account that providing “free” loans is also problematic in terms of the budget. That means an increase in budget expenses. And where will they get the money from? Naturally, they will cut from other expenses that have less political significance and influence.

All this happens at the moment when the political processes enter the pre-election active phase. Everyone understands that such “random” coincidences do not just happen.

HAKOB KOCHARYAN

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