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Official News

Wednesday, 21 June 2017

Statement by Prime Minister of the Republic of Armenia Karen Karapetyan at the National Assembly of the Republic of Armenia

Honorable President of the National Assembly,

Dear Member of Parliament,

Ladies and Gentlemen,

We are introducing today the Program of the Government of the Republic of Armenia for 2017-2022. Well aware of the expectations that society has from the Government, we are taking them into account in our actions.

Based on our last nine months’ work, we have a clear and accurate understanding of today’s realities; we know the challenges and opportunities we have.

We also have a clear vision of the future. We know what needs to be changed and how, and we have begun to do that.

Voicing the problems faced in each area, we provide clear-cut solutions and introduce a substantial reform program.

Dear Colleagues,

Armenia finds itself in a complicated geopolitical environment. About 83% of our borders are closed, and only 17% - open.

There are many powerful players involved in our region with conflicting interests. We are dependent on the shocks of global financial markets, the political and economic events taking place in major countries. And this situation will last for a long time. We also have internal problems, all of which are well-known.

I do not want to discourage you by enumerating the challenges. Instead, I want to assure you that we have a clear understanding of the reality.

This program is supposed to change and improve the quality of life for the sake of a more prosperous, stronger and a more secure environment.

Many countries in the world have at some time found themselves under worse starting conditions. However, they were able to work with devotion day and night, experiencing deprivations, and reaching a high level of development through faith in the work they did.

I want to be realistic. I understand very well that this will not be an easy task. The key to making our country prosperous and prosperous is in our hands. We will succeed if we continually improve, educate, raise the quality and effectiveness of our work and dedicate ourselves to our work.

It seems to be obvious that Armenia may become a pillar of creative activity for our compatriots only when there is an efficacious and competitive environment. More than 7 million Armenians are living outside Armenia, scattered across the globe. Our goal is to implement the formula for the establishment of stronger linkages between the Diaspora and the Homeland.

Armenia and the Diaspora are two parts of a single nation linked to each other with a common chain of history, a shared fate and anxiety for the future of our homeland. We are responsible for each other. This calls for united efforts, multiplied opportunities and reassessed attitude towards the world.

We must create such an environment as will urge our compatriots, businessmen, governors, scholars and cultural figures in the Diaspora to get involved in the ongoing reforms and, first of all, bring in a new culture of governance, put the knowledge and potential of Diaspora specialists at the service of our national goals.

Dear Colleagues,

We should try to use our culture to introduce ourselves to the world and discover the world for us. Culture is a powerful weapon, sometimes stronger than the conventional weapons. It can unite people and make them identifiable. We have a very rich culture that we have brought along through centuries.

We sincerely believe that the whole world knows about it and have a feeling of sincere surprise when we discover that this is not the case. But we must ask ourselves: what are we doing to present our culture to the world? How well do we know our own culture? We have a lot to do here. At the same time, we should be open to accepting, recognizing, understanding, learning and cultivating other cultures around the world.

Dear Colleagues,

There is no other way than denying populism and stereotypes. We need to raise the level tolerance, give up the posture of a mere critic and observer: we must work to implement our country’s badly needed reform program as soon as possible.

• The investor does not get the desired result in a day.

• The farmer does not become an exporter in a day.

• The manager does not become effective in one day.

How sooner we can achieve the proposed targets depends on the quality of our work. I want you to understand me correctly. We do not want to evade responsibility.

The program at hand reflects the views and the vision of the Republican Party of Armenia and its coalition partner - the Armenian Revolutionary Federation (ARF) - for the coming five years on the development of our country. At the same time, it lays the basis for our country’s sustainable long-term development. About 125 pages long, the Program details our logic, actions and tasks.

As we drafted the Program, we had several meetings and discussions; we sought experts’ advice, we had heated debates and came to what we are presenting now to your attention. The Program stems from our vision of having a Safe, Fair, Independent and Intelligent Armenia.

Dear Colleagues,

Development is impossible without ensuring the safety of our country and citizens. This is the prerequisite of our country’s survival.

Regional instability and the challenges of uncertainty are serious threats to our national security and Artsakh’s independence.

Artsakh has given us the delight of freedom and independence by demonstrating that we are strong as we hold fast to our land. Today, we are a free, independent, victorious nation; we stand by Artsakh as the pledge of its legitimate right to self-determination and living in freedom. We are ready to counter any attack on Artsakh; on our borders, our values and our free lifestyle. Consequently, we must continue to develop our military capabilities, the strength of our army and our soldiers.

At the same time, we must provide for high-level diplomacy in order to strengthen relations with friendly nations. We need a flexible and purposeful work on bilateral and multilateral levels with a view to complementing the ranks of friendly countries.

Dear Colleagues,

The Government is committed to promoting and strengthening the atmosphere of justice and confidence on the way to providing a favorable environment conducive to prosperity in our country. Otherwise, we shall not succeed on our way to development in ensuring the welfare of our citizens.

We have initiated a public governance reform with a view to improving decision-making mechanisms, rethinking approaches and building capacity in the system of public administration in order to make them more productive, human-centered, transparent and inclusive. We wish to raise the level of accountability of public agencies and government institutions.

The Government will undertake complex measures to administer effective and predictable justice through an independent and impartial judiciary system. We must strive to ensure that unbiased and speedy decisions are issued with regard to the problems brought before the judiciary.

To this end, we will elaborate and introduce a new judicial code by the end of 2017, which shall:

a) Set up new mechanisms to ensure the independence of judges and courts

b) Reduce discretion and timing due to the use of electronic formats in court proceedings

c) Revise the trial procedure by making use of modern instruments for judicial administration and so on

We will pay particular attention to bankruptcy legislation with a view to changing the existing practice and introducing legal incentives that will to define rehabilitation as a priority in bankruptcy proceedings.

Dear Colleagues,

We have adopted intolerance towards corruption; we are working on the image of a public servant. In this regard, we have already undertaken a number of important steps, in particular,

• We are forming a single anti-corruption body

• We are criminalizing illegal enrichment

• We are introducing the system of informants

2017 will be a key year in terms of the public administration system reform, which stems from the constitutional requirement and the findings of diagnostics. A few examples of the work done to optimize the public administration system:

• A number of draft constitutional laws have been drafted and adopted on the demand of constitutional amendments.

• We are transitioning to the One-Stop-Shop system in providing public services so that our citizens should not have to turn to several public agencies, and their requests would not be left to government officials’ discretion. Private entities are today providing most of the 140 State-administered services.

• The public sector has been optimized, as a result of which funds have been saved.

• The ideology of implementing programs with commercial potential at the expense of credit resources has been revised, highlighting the potential involvement of private investors in such programs.

• A pilot program of operational analysis is being implemented in the ministries of Economic Development and Investments and Agriculture with a view to increasing their efficiency.

Proceeding from the Program, we will continue to make efforts in the following areas:

• We will continue to increase the efficiency of public administration in the parliamentary system of governance by providing a legislative groundwork for the government’s enhanced accountability and the rule of law.

• Within the framework of our digitization strategy, we will increase the number of electronic services provided to citizens and businesses.

• We will implement a civil service reform.

Dear Colleagues,

We need an advanced economy to build our future and ensure our security. Economic development will bring in new jobs, which will provide our citizens with long-term and sustainable income, education, home building, family reunion, relaxation, and most importantly, the opportunity to build our children’s future.

Over the next five years, Armenia’s economic growth will be based on the efficient and smart use of domestic resources and our enhanced competitiveness on the global markets. As a result, we will ensure a gradual increase in exports of goods and services, bringing the export / GDP ratio to 40-45%. The Government is working in this direction.

• The legislation has reduced 22 times - from 90 to 4 days - the VAT refund deadlines for exporting companies

• Seasonal fruits export management has been significantly simplified. As a result of intensive negotiations, we succeeded to step up the export and sale of Armenian agricultural products in 3 largest commercial networks of the Russian Federation

• In light industry, we have been placing purchase orders with local manufacturers, which sometimes even decline them due to lack of capacity. Now, we are working to increase the sector’s capacity and take our products out to foreign networks.

I must state that the results of the first five months of 2017 as compared to the same period in 2016 can witness that we are on the right track as we have recorded a 21% increase in exports mainly due to the processing industry. Efforts are underway in this direction.

• We will simplify the procedures for issuing country of origin and dual-purpose goods export certificates

• We will introduce a new electronic certification system for goods originated under the European Union GSP + preferential trade regime

• To increase the exports of Armenian products towards the target markets, we will promote cooperation between exporting and importing companies.

In Armenia, we will create a business environment where businessmen will feel comfortable. Let me introduce some of the already implemented activities in this direction.

• We encouraged free competition through improved tax and customs administration

• We presented a package of legislative amendments, replacing the license requirement for dealing with 14 types of activities

• We are introducing hot lines in the ministries to enable our citizens and businesses to get information, submit suggestions and voice their concerns and complaints

• We are gradually lifting the VAT requirement on the customs border for imported equipment and raw materials

• We simplified the import procedures by introducing the case-by-case method to determine the customs value.

The program provides for complex measures aimed at improving the business environment to include Armenia in the World Bank’s Doing Business report’s top 20 countries. To this end, 49 activities will be carried out this year alone, and this process will be continued ahead.

The following activities shall be implemented:

• The terms and procedures of electricity connection will be reduced

• Electronic urban development permits system will be applied in target communities

• The entire process of State registration of legal entities will be implemented online, and an electronic business registry system will be created

• The turn-key tax calculation system will be introduced

• We will launch the business ombudsman’s institution.

Dear Colleagues,

The key targets of the Government Program are as follows:

• Provision of progressive growth comparable to developed nations at an average rate of about 5% of GDP

• Increasing the share of exported goods and services up to 40-45% of GDP

• Reducing poverty by 12 percentage points

• Providing a 25% increase in the nominal minimum wage against the background of sustained competitiveness of our country

• Improving tax and customs administration in order to increase the tax revenue / GDP ration by 2.5 percentage points over the next five years.

Polls suggest that the number of checks and incidences of tax evasion have diminished in the tax and customs spheres. We are going to simplify the system for honest businessmen and make it even harder for unscrupulous taxpayers.

We have declared that we are preparing for the second round of reforms in this area, which implies that:

a. the tax audit process will be organized in such a way as to ensure a consistent reduction in the number of inspections carried out by the tax authority and the number of taxpayers
b. the “blue path” of customs control will be introduced to gradually switch the system of borderline control over to the “step-by-step” stage
c. the customs control system will be improved to reduce the time spent on customs clearance
d. the electronic system of cellular survey will be launched

Owing to increased economic activity and tougher tax discipline, tax revenues have grown by 8.4% this year, which enabled us to build up additional resources. At the expense of these additional resources, we were able to increase budget expenditures for a number of important projects by 57 billion drams in the month of April. This is an unprecedented fact that budget expenditures are added in the fourth month of the year, and despite the fact that during the electoral campaign we realized that we were able to do so, we did it only in the wake of the elections so that no one would blame us for populism.

Dear Colleagues,

You may agree that the provision of a favorable business environment triggers growth in investment. Attracting investments takes too much time and effort. It implies detailed preparation, research and negotiation. We will implement our investment policy in three main directions:

• Strengthening institutions for investment protection and guarantees

• Targeted and per-sector work needs to be done with investors in parallel to the investment improvement policy

• Promoting creative and innovative technology in all areas.

In order to ensure the competitive edge of the country, to succeed in the external markets, we need to develop at an advanced pace, to give impetus to technological and innovative solutions and adopt the concept of cleverness.

The Government is revising the educational system at all levels with a view to providing our citizens with the opportunity of getting such knowledge, skills and abilities as are deemed to be vital for the next decades. The school should be able to convey to students human values - patriotism and dignity in order to educate a true citizen proud of our values, traditions and character, open to free communication with the global world.

The teacher is the pillars of all this structure. By the end of 2017, the Government will introduce new mechanisms to encourage teachers to work. Starting 2018, we will enforce standards and tools for new-generation textbooks. We are inspired by the achievements of the Armenian educational thought. According to the French magazine We Demain, last year the TUMO Center was recognized as the world’s best innovation school. So, we can set ourselves high targets to materialize that potential.

Armenia’s economy should develop thanks to modern, globally competitive, highly-qualified and motivated workforce, the basis of which should be laid from school. In 2018, we will upgrade academic programs in public schools, particularly focusing on mathematics, natural science, information technology, business management, foreign languages and conceptual approaches to teaching.

By the year 2022, we will have completed the program of accreditation in universities. As a result, our students, their parents and employers will be sure that the professional skills of graduates meet today’s most stringent requirements.

In 2018-2022, we will also implement a reintegration program in the field of science. With many of our compatriots working in the world’s top research institutes, we cannot afford the luxury of managing without them on the way to developing our country.

Dear Colleagues,

To create a competitive and innovative economy, the Government will work out and bring Armenia’s digital agenda into life, which will serve as a basis for the transformation and further development of our economy.

It would be impossible for us to keep abreast with the century without dynamic digitization, without being constantly adapted to the environment.

The digital agenda will reflect on all areas of our country - State system, infrastructure, economy, education, science, and healthcare. Digitization is not an end in itself. It is the smartest use of the latest technologies, which should increase the quality of our management.

Digitization is a dictation of life and an imperative. It implies the use of new technologies. For example, the doctor will have access to your medical record that may be scattered across those medical institutions that you have visited during many years.

Digitization allows us to compare communities using several criteria. We are already making similar analyses and you cannot even guess how clearly we saw which of our institutions are functional, which ones are unnecessary, and where there is a need for surgical intervention.

Digital commerce allows exporters to avoid unnecessary delays not only in Armenia, but also in the outer sales markets.

Dear Colleagues,

Evoking our previous program, I want to state that we did what we had planned. Today we can notice positive tendencies: in January-May 2017, we recorded a 6.4% rise in economic activity against the previous period:

The output of manufactured goods increased by 14.4%

Trade turnover - 12.8%

Services (without trade) - 11%

Exports increased by 21 percent and imports by 24.4 percent, with a significant rise in imports of equipment for investment purposes, about 11 percent as of April.

The number of registered individual entrepreneurs has increased by 8%, while the State registration of commercial organizations is up 13%. We have a noticeable increase in the number of passengers in the airports, 31% - in air freight, 81.5%, in flights - about 24%.

Dear Colleagues,

Let me introduce a few more examples from different spheres. We have great ambitions in the energy sector. We intend to not only equip the whole complex of energy infrastructure, but also to become an active and key regional player. The Government will implement energy market reform programs that will help build up renewable energy capacities, enhance system efficiency and security, and drastically increase cross-border electricity trade.

As a result, we will have a modern, efficient, export-oriented and competitive energy system. At the same time, we will raise the quality of energy-related services. One of the main goals of this sphere is to liberalize the energy market.

We will also upgrade the water management system.

• The loss of water resources will be reduced to 12-13% for the next five years

• Measures will be taken to provide water and wastewater services to 560 settlements outside the service area.

• By the end of 2019, we will provide mechanical irrigation systems with gravity systems.

We have reviewed our agricultural development concept. We will work with emphasis on productivity increase, introduction of modern technologies and the development of modern farming businesses.

We will review the overall digital mapping of regions or areas, make recommendations on the range of crops, irrigation, fertilizers, technologies, and progressive types of funding, and we will provide financial support to those entities and communities applying our recommendations.

We are introducing the concept of drip irrigation, intensive gardens. We have developed new mechanisms to ensure broader access to agricultural machinery for farmers. We are implementing subsidies in agricultural leasing.

For a small farmer, we will provide the opportunity to implement viable programs with limited resources. It is crucial for us to promote professional skills among self-employed entrepreneurs. In order to provide them with economic opportunities and well-being, we will pay great attention to road infrastructure accessibility and long-term quality management.

• In 2022, we will provide at least one roadway in good or fairly good condition connecting communities to inter-state highways or regional centers.

• In 2022, we will provide nationwide access to motor-borne passenger traffic.

• In 2018, we will introduce a unified asset management system, including through long-term road maintenance and exploitation contracts.

• We will build a unified automobile passenger transportation network, involving private operators, private investment, as well as through the introduction of electronic management and unified ticket system.

Our efforts in the sphere of social security are aimed at establishing public welfare and social protection.

The child protection reform shall be implemented under the motto of “every child should grow up in family.” By reforming the caregiver’s procedure, we will provide for children’s care in family - in their natural social environment.

Increased efficiency of programs and services will be deemed as a key priority in the field of social protection that will be implemented through a single system of information referred to as “online welfare services.” Any citizen in need of assistance should be sure to have the State’s backing.

We will create a social ambulance platform that will make it possible to quickly respond to the most urgent social needs.

Health and healthy lifestyle are among the most important preconditions for our country’s development. We understand that health is not only the absence of illness, but also mental, physical, and social well-being.

In the healthcare sector, we will reword the criteria used in the selection of medical institutions eligible for the provision of State-ordered services. The mandatory annual external audit requirement will be introduced for major healthcare institutions, which will have to ensure transparency in the maintenance of commercial receipts.

A program will be developed to provide regional healthcare providers with narrow specialists. In 2018-2022, customers will benefit from doctors’ performance assessment, complaint-demand registration and laboratory research systems. We have already increased the funding for high-demand healthcare programs and urgent services.

Under the Proportionate Regional Development Program, we are refurbishing the regional medical centers, providing them with the necessary medical equipment.

We will address the fight against counterfeit drugs. We will criminalize the production of counterfeit medical products and the circulation of counterfeit drugs.

We will introduce international clinical guidelines and patient management practices in an effort to standardize doctors’ actions in the face of various diseases and will protect our citizens from unnecessary medical examinations and wrong treatment.

I also want to touch upon the development of tourism. We must work to make Armenia recognizable to the world and show the best that we can offer to tourists.

During the past few months, numerous steps have been taken to increase the number of inbound tourists:

• The Gyumri airport has been re-commissioned, which accommodates the first budget airline and where an Armenian airline is based.

• New air carriers have entered the Armenian market; a number of new destinations have been added. Almost all companies have stepped up the frequency of their flights to Yerevan.

• We have been implementing a program of visa liberalization or facilitation for the citizens of 8 countries and this process will be continued.

The total number of visits to the Republic of Armenia has increased by about 30% in 2017.

Future Goals: the Government is set to increase the number of annual inbound trips to at least 3 million as a result of complex measures scheduled for 2017-2022. We will implement various programs in Tsaghkadzor and Jermuk to make winter holidays more enjoyable. We will provide a new quality of recreation by transforming the coastal part of Lake Sevan.. We will work to increase the number of direct flights from other cities to Armenia and boost their geographical coverage.

Dear Colleagues,

Today, I will not address all the target spheres, but I would like to say that the program presents the Government’s approaches and steps in all detail, and in all areas we have systematic solutions that will ensure sustainable and comprehensive development of any given field, making our environment understandable and predictable.

By upholding the current pace and our working style, we will succeed in stabilizing the economy as early this year: we will move on to a long-term and sustainable development that will help change the quality of our citizens’ lives.

Dear Colleagues,

I tried to share our logic and philosophy with you.

I want to reiterate a famous idea: no one will live our lives for us; no one will do our job in our place. We have to rely on ourselves. Together we must build the country of our dreams, that is a safe, fair, independent and intelligent Armenia, and make it a reality. We can do it and we will do it together. We must work day and night to this end.

I am confident that in this way we will get through to the long-cherished Armenia.

Thank you.

May 2020