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Gloomy Forecast: Increase Of Gas Tariffs Together With Government Po

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  • Gloomy Forecast: Increase Of Gas Tariffs Together With Government Po

    GLOOMY FORECAST: INCREASE OF GAS TARIFFS TOGETHER WITH GOVERNMENT POLICY COULD LEAD TO HIGHER RATES OF MIGRATION

    SOCIETY | 31.05.13 | 16:00

    Photolure

    By JULIA HAKOBYAN
    ArmeniaNow Deputy Editor

    The expected increase in gas tariffs has become one of the most
    discussed issues in the Armenian society, as in May the ArmRusGasProm
    has applied to the Armenian government, offering a 64 percent rise
    of natural gas tariffs. (From current $316 to $531 per 10,000 cubic
    meters)

    The oppositional representatives warn that the increased gas tariffs
    will cause a rise of cost of living in the country, where half of the
    population endure a hand to mouth existence and which eventually will
    lead to a new wave of migration. (The average family pays at least
    $80 monthly (for heating an apartment of 70 sq.m), while small and
    medium-size producers, whose businesses are directly related to gas
    consumption, such as farmers, say such a major increase will leave
    them bankrupt as they won't be able to heat hothouses.

    At a press conference last week, the executive director of the Hothouse
    Association of Armenia Poghos Gevorgyan said that gas tariffs increases
    would be the "nail in the coffin" of the greenhouse production.

    Gevorgyan noted that expenses for consuming natural gas grew, in fact,
    long before the expected increase, as the supplied gas is of poor
    quality and farmers are forced to consume more gas than they estimated
    to heat the greenhouses. The association has monitored the volume of
    gas consumed by farmers and found that over the past two years, during
    the heating season of greenhouses, farmers consumed 30 percent more
    gas than in previous years, yet in those years the winter was warmer
    than in previous. Some farmers are skeptical whether they were really
    using Russian gas, or it was Iranian gas, which has a lower intensity.

    "The increase of gas tariffs will leave little choice for the villagers
    - to cut down the forests and gardens, or to leave the country,
    "said Gevorgyan.

    The emigration rate in Armenia, one of the targets of opposition's
    critics, is steadily growing in the country during the last couple
    of years, the tendency, which is proved also by official figures.

    According to the National Statistical Service report published last
    April, in January-March 2013 , 259 210 left Armenia, 223 710 of them
    returned. The negative balance is 35,000, which is by 10,000 more
    comparing the same period last year.

    The government, which routinely downplays the significance of the
    migration issue, however, has shown some attempts in coping with it.

    One such attempt was the closure in Armenia of the Russian migration
    program "Compatriots", under which citizens of Armenia, as well as
    other post-Soviet republics are enabled to become permanent residents
    in one of the 38 remote provinces of the Russian Federation. (New
    citizens get jobs in Russia, a lump sum government payment, favorable
    conditions for purchasing property)

    The Russian program, which aims to replenish the country's dwindling
    working-age population, was largely criticized in Armenia soon after
    it was launched in 2007.

    Until recently the government showed no concern over the program,
    saying that there wasn't any serious outflow of the population.

    According to the data of the Armenian Migration Service, during the
    past four years the "Compatriots" program in Armenia had a total
    of 26,000 applicants, 1,500 of whom have given up their Armenian
    citizenship and moved to live in Russia.

    However last November Prime Minister Tigran Sargsyan for the first
    time said that the realization of thе Russian program that effectively
    encourages outward migration is unacceptable for Armenia. A few months
    later, in April, the program was stopped.

    Thus, the departure from Armenia through "Compatriots" has been limited
    by administrative levers. But it's obvious that the closure of one
    of the official ways for migration cannot stop the disturbing trend,
    even if it manages to reduce it to a certain extent.

    Despite the hard socio-economic situation in the country, the
    government is optimistic about the existing economic trends. On May
    29, the prime minister introduced in the Parliament a report on the
    2012 state budget realization, noting that the high rates of economic
    growth in 2012 have been registered due to the targeted industrial
    policy of the government.

    According to the prime-minister in 2012 Armenia saw a 7.2 percent of
    economic growth, to which contributed all spheres of the economy.

    Sargsyan pointed out that in the end of 2012 the share of industry
    in GDP was 17.2 percent, a progress comparing to 13.3 percent share
    in 2008, before the global economic crisis. "This figure shows that
    diversification of the economy in favor of more productive sectors
    took place in Armenia."

    Hrant Bagratyan, the ex-presidential candidate and the president of
    the "Liberty" party, called Sargsyan's bluff regarding the information
    on 7.2 percent economic growth. "There is a virtual Armenia existing
    on paper which does not correspond to reality," says Bagratyan,
    Armenia's prime minister 1993-1996. "Economic growth reached a maximum
    of 3.8 percent in 2012, why is the figure inflated twice? Because the
    president promised economic growth of 7 percent... It just cannot be
    truth. I am ready to meet with Tigran Sargsyan and prove it"

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