168: Defense spending is cut, programs are scrapped

Nikol Pashinyan rarely tells the truth. One such rarely told truth is that they have stayed in the same class for so many years. It is not difficult to see what is happening in the budget. Every year they promise that they will improve the state of budget execution next year, but nothing changes. Even after eight years, we see that the government is squeezing the economy, instead of implementing the planned programs on time, it takes the money and deposits it in banks. And one of the main reasons for this is the relatively low cost performance.

Almost 30 percent of the expenses of the first quarter of the budget could not be fulfilled.

More than 857 billion drams were planned to be spent, and 603 billion were completed.

254 billion drams or about 680 million dollars were underpaid.

Many important expenditures have underperformed, and, as usual, capital expenditures in particular, and planned capital expenditures on defense.

“2026 in the first quarter, the capital expenditures of the state budget were made by 23.3%, mainly due to the performance of the capital expenditures implemented within the framework of the “Ensuring the Defense of the Republic of Armenia” and “Establishment, Construction, Improvement of Public Education and Preschool Institutions” programs.

Compared to the same period of the previous year, capital expenditures of the state budget decreased by 43.4% (32.6 billion drams) due to the decrease of 63.8% (32.4 billion drams) and 51.2% (3.5 billion drams) of capital expenditures made within the framework of the “Security of the Republic of Armenia” and “Road Network Improvement” programs, respectively,” the Ministry of Finance reported in the report on the implementation of the first quarter of the budget.

They planned to implement more than 182 billion drams of capital expenditures, they made 42.6 billion drams. Performance was only 23.3 percent.

Disgraceful low performance. They spent 4.3 times less than they committed. Almost 77 percent of the planned works were not completed.

Capital expenditures have also significantly declined from the previous year’s level.

Compared to the previous year, capital expenditures decreased by more than 43 percent.

Last year, more than 75 billion drams were spent on capital expenditure. The expenses made this year amounted to barely 42.6 billion drams.

It is not the first year that such a shameful situation has occurred in terms of the timely execution of budget expenditures, especially capital expenditures. CP has been in power for eight years, every year is the same. They could not change the situation in eight years. They could not because they are not competent and do not want to learn. Because of this, first of all, the economy suffers. Planned programs, which should provide not only economic but also social results for the citizens, fall behind.

As a result of every dram not spent on time and every unimplemented project, how many losses the economy and citizens suffer, the government has never calculated or submitted a report. But there is no doubt that these damages are counted in billions of drams, for which no one is responsible.

Unfortunately, it is not the case that only capital expenditures were underperformed. It is a much more shameful situation in terms of the implementation of targeted credit programs.

The performance of targeted credit programs is close to zero. They were fulfilled by only 3.2 percent. 96.8 percent remained unfulfilled.

They planned to implement 14.5 billion dram projects in the first quarter with targeted credit funds. 14 billion of the amount are loans from international financial organizations, which were given to implement certain projects. But these programs are constantly delayed due to such performances. And it is not surprising, if we take into account that out of 14.5 billion, only 500 million drams were planned in 3 months. The remaining 14 billion projects were left hanging in the air, probably thousands of dollars in damages and fines were paid for unrealized loan funds.

The performance of the targeted programs planned with credit funds is in such a state that they are delayed for years. There is no program that they can finish on time and not pay penalties.

Not only the capital expenditures and targeted credit programs, but also the expenditures on benefits and pensions have underperformed. As much as it seems that there should not have been deviations here, they have deviated again.

The performance of expenses was 87.7 percent due, first of all, to less allocations made to the accounts of the participants of the cumulative pension system. The Ministry of Finance did not elaborate on what was the reason for this. But, which is more worrying, the other reason for the under-execution of these expenses is the extremely low performance of the social assistance programs provided to our compatriots who emigrated from Artsakh. Although many are in dire need of this assistance, the cost performance was only 40.9 percent. They didn’t even do half of what was planned.

The situation is the same in terms of implementation of many other expenses. Because of that, the budget underperformance reaches 30 percent. Among those 30 percent are economic and social programs worth hundreds of millions of dollars, which should not only create incentives for the economy, but also contribute to the improvement of the social condition of citizens. But very often, as a result of the incompetence and slowness of the government, they lag behind, delaying the benefits that are expected to be obtained as a result of their implementation.

HAKOB KOCHARYAN

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