Nearly two years after a controversial merger of the State Revenues Committee (SRC) with the Finance Ministry the ruling Republican Party of Armenia (HHK) acknowledges it is “inexpedient” to have tax collecting and budget spending bodies under the same roof.
The SRC was merged with the Finance Ministry in April 2014 after its Gagik Khachatrian was appointed as finance minister. The promotion made Khachatrian, who has long been a target of corruption allegations by the opposition and media, one of Armenia’s most powerful officials.
Government critics and leading economists back then criticized the decision, pointing out the risks of such a merger, but officials dismissed that criticism.
Citing no specific reasons for his decision, President Serzh Sarkisian signed a decree on Tuesday to separate the SRC from the Finance Ministry again.
Vahram Baghdasarian, the head of the HHK parliamentary faction, explained to RFE/RL’s Armenian Service (Azatutyun.am) that the step is being taken as part of the cooperation agreement that was signed by the HHK and the Armenian Revolutionary Federation (ARF) last month.
Under that agreement the ARF got three ministerial posts, including the post of the economy minister, in the government and named governors of two Armenian provinces.
Baghdasarian made it clear, however, that the matter concerned the joint pledge of the two parties to fight corruption and separate business from power.
“It is not expedient that tax collectors and budget spenders stay in the same unit,” said Baghdasarian, refusing to be drawn on why the risks were not properly addressed during the past two years.
He said that the move also proceeded from the February 12 speech by President Sarkisian, in which he also spoke about officials’ conflict of interests.
At the same time, Baghdasarian denied that the separation of the SRC from the Finance Ministry has to do with Minister Khachatrian, whose extended family is known to own a number of lucrative businesses in Armenia.
“We have not discussed personalities, we have rather discussed the expedience. I ask the media and everyone not to dig into people’s families. Who has said that an official’s relative should not do business? I don’t see any conflict of interest in it. I evaluate the work of this person based on his merits,” the senior HHK said.
Meanwhile, Armen Rustamian, the parliamentary leader of the ARF, called for “specific mechanisms” to deal with the separation of business from power and reducing risks of government corruption. He reminded that the Ethics Commission on High-Ranking Officials considered claims that Khachatrian has a conflict of interest and decided that since he is not the owner of the businesses, the issue is inappropriate.
“But I think that one has to take a broader view of the matter. An official himself may not have a business, but his close surroundings, members of his family may be in this business. We know how this happens in Armenia. So, one should review all this too and approaches should become stricter in this sense so that we can have a drastic change of the situation,” Rustamian told RFE/RL’s Armenian Service (Azatutyun.am).
At the same time, Rustamian welcomed President Sarkisian’s decree to separate the SRC from the Finance Ministry. “It is not correct for these two structures to be under the same roof... I think they must be separate in order to ensure better control,” he said.
Hayk Gevorkian, an economic analyst writing for the Haykakan Zhamanak daily, meanwhile, voiced skepticism about the move, saying that he expected no positive change for the country’s finance and economy.
“Only problems of personalities are being solved, with the influence of one official being reduced and another official’s being increased… I think there is no point in trying to assess whether the country’s economy will gain or suffer from this step,” he commented.