Armenia’s parliamentary opposition parties consider the steps offered by the government to support the economy to be insufficient and call for substantial bailouts to help businesses during the ongoing coronavirus pandemic.
The government of Prime Minister Nikol Pashinian on Thursday unveiled an aid package of more than $300 million in social assistance and subsidies on business loans during what it expects to be a short-term economic downturn amid unprecedented measures to stop the spread of the highly contagious and potentially deadly virus in Armenia.
Leader of the Bright Armenia party Edmon Marukian believes that like in the case with the previous governments acting in times of global recessions, the bank lobbying has prevailed again. In Marukian’s opinion, instead of subsidizing interest rates on business loans, the government should directly compensate the losses incurred by companies because of the coronavirus crisis. The government approach, Marukian said, will only lead to businesses contracting more debts.
“The state has saved some money for the rainy day and that rainy day is today,” the opposition lawmaker said.
Marukian believes that besides directly assisting businesses, the government should also give support to citizens who every year travel to Russia for migrant work, as at this moment many have no possibility of entering that country because of the coronavirus pandemic. “The border is closed, but these people have problems with earning their livelihood on a day-to-day basis, which is aggravated by the burden of loans that many of them have,” the oppositionist said.
Mikayel Melkumian, a lawmaker representing the other opposition faction in parliament, the Prosperous Armenia Party, also considers the steps being taken by the government to be insufficient.
He pointed to the fact that out of 610,000 workers in Armenia only 180,000 are employed in the public sector, with the government guaranteeing their salaries during the downtime. The rest, he said, are private sector workers, with some 250,000 of them depending on their daily incomes – vendors, hairdressers, waiters, etc.. “It is this group that the government must help,” the lawmaker said, adding that the state could guarantee to such workers a minimal salary for a period of two or three months.
Melkumian believes that besides providing the minimum wages for people who lose their jobs the government should also think about new employment opportunities for them.
In explaining the economic aid program of the Armenian government on Thursday, Economy Minister Tigran Khachatrian said that assistance, in particular, is planned for people who find themselves in difficult conditions because of the negative consequences of the coronavirus pandemic. “If someone loses their jobs and finds themselves in difficult economic and social conditions, then the tools formulated by the government, which are yet to be finalized, will provide them with opportunities,” the minister said.
Khachatrian said that the falling global markets have already hit Armenia’s tourism sector and some export-oriented companies.
Armenian government officials have repeatedly warned against populist steps such as large-scale bailouts that they believe may hurt the country’s macroeconomic stability and spur inflation.
Armenia declared a 30-day state of emergency on March 16 to slow the spread of the novel coronavirus. To this end the Armenian government has put restrictions on international travel and ordered closures of schools and some other public institutions. All sorts of public gatherings have also been banned in the country.
Armenia’s health authorities say there are 136 confirmed coronavirus cases in the country as of Friday morning. One patient is declared recovered.