The Government of the Republic of Armenia

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Prime Minister Tigran Sargsyan had a meeting with the members of the public sector of the National Youth Policy Council and various youth and student organizations on August 27 in Tsaghkadzor. The Head of the Government answered their questions relating to the country’s economy, Government policy, social programs concerning the young families, etc.

Afterwards, the Prime Minister held an informal meeting with the members of the National Youth Policy Council and discussed issues related to the activities and programs of the council.

Following is the transcript of the meeting

Deputy Chairman of National Youth Policy Council, RA Deputy Minister of Sport and Youth Affairs Arsen Karamyan: - Dear Mr. Prime Minister, dear colleagues, today we have a meeting with the RA Prime Minister Tigran Sargsyan. The meeting has been realized by a number of organizations and the National Youth Policy Council. Many organizations, both public and academic, have a number of questions that we would like to discuss in a form of Q & A.

RA Prime Minister Tigran Sargsyan: If you don’t mind, I’d like to start our meeting with an opening speech, thus trying to direct your questions in the right direction. First of all I want us all to think about the future. On my way to the meeting I was thinking about what I had to say to you. Of course, it is clear that you all have much to say, too. I was wondering what your ideas about the future; the Armenian people and the Republic of Armenia in general would be like; the way you perceived the patriotic education and the changes taking place in the modern world. What do you understand by saying patriotism? Because, in fact, your ideas are going to shape the future of our country, and these are the issues I’m interested in and concerned about. These are the issues I would like to discuss with you, so that, on the one hand, to get answers to these questions from you, and on the other hand, to be able to present the acting methods adopted by the Government from that point of view.

I would like to suggest the following methodology for our discussion:

First, if we live in a rapidly changing world and these changes are obvious in both around us and in us, what challenges do these changes make us face? Whether we can identify the challenges of this rapidly changing world?

Second, based on these challenges, could we specify the agenda of problems facing the Armenian people? What are the problems that we should focus on?

These are the questions about which I have my own ideas, but I would like you to also present yours.

Q: Hello, Mr. Prime Minister. Gor Avagyan, Association of Young Politicians. - One of the provisions of Mr. President’s pre-election program was about giving the young families the opportunity to obtain houses and vehicles. The issue of obtaining houses seems to be in progress, when will they start working on the issue of the vehicles? And one more question relating cars: what do you think about the non-transparency of customs procedures?

A: RA Prime Minister Tigran Sargsyan: Providing housing to a young family is an extremely important issue because the state is obligated to create such environment for families to be able to buy both a house and a car with their salaries, to provide themselves with all necessary living conditions, thus allowing them to fully commit to their favorite jobs. The formation of an environment, where each citizen would realize that having a job and being able to use their intellectual abilities in Armenia should make it possible to live with no domestic problems and troubles, is the most important responsibility of the state. Of course, the housing and vehicle issues come first and they are mentioned in RA president’s pre-election program. Mortgage Fund is being practiced in Armenia nowadays allowing the young families to obtain houses with cheap loans. This is also related to other household goods, as well as vehicle purchasing. Central Bank has been working in that direction recently, and soon the concept will be out there for you to observe.

We have serious problems of customs clearance, and it concerns not only cars but also other various products clearance and functions, which are implemented by the Customs Service. We introduce a new customs clearance system, which will be based on risk-management concept. Its goal is to create a simple clearance process, but at the same time will allow the state to identify those subjects, who very often abuse the function of customs clearance, having a purpose to pay little money to the state budget. It’s clear that the harsh methods that we use today first of all hit those who implement fair and honest customs clearance, and the reason is that, unfortunately, there is still a large share of illegality and risks, which are displayed in this field. With international organizations we developed a concept that we invest quite rapidly, and it will still need some time for our customs services to comply with the best European standards. We have a program for a free trade system membership with EU, and customs functions are the most important element of that application. This means that we have to do to our best for our customs clearance procedures to comply with the best European standards within 3 years.

We are unable to implement this at once because we are having immediate loss of income. That’s why we invest this system stage by stage. A huge amount of work has already been done, and I am sure that stage by stage you will see that we are having improvements in this field. I accept the problem you raised; namely, the processes still don’t match the best standards.

Q: Tsolak Akopyan, Chairman of Student Council of Yerevan State University. - Mr. Prime Minister, I will direct my next question based on the philosophy put forward by you: a young Armenian’s idea of patriotism. For me it is one of the most important criteria for the well educated young man to be able to input the knowledge he got in his country’s further development. But, unfortunately, nowadays many young people, getting a quality education, are unable to find decent jobs in the state system because of low wages, and it is a pity that many very good specialists have to work in the private sector, because working in the state system they’d be forced to take bribes. Many young people, like me, try to stay away from that phenomenon, and, naturally, the state apparatus is the one affected by that. What plans does the Government have to be able to provide good, qualified professionals with jobs in the state system?

A: RA Prime Minister Tigran Sargsyan: Thank you for the question. First of all I want to say that the patriots are not only needed in the state institutions but also in the private sector. Thus, it should be noted that if our educational system provides us with intellectuals, we should be happy that those intellectuals work in both state system and private sector. I have to say, that it is not an Armenian phenomenon that in the private sector the wages are higher than in the state system. It is so in all the countries around the world, and all the best specialists choose the work in the private sector over the state system. Of course, the state must do everything to form an effective management system and implement such personnel policy which will be competitive from the point of view of intellectual capacity. The investment of an effective management system is a major challenge that faces the world. This problem is also relevant in developed countries, because the global financial crisis revealed that even in the most developed countries the management system has many shortcomings and does not comply with the modern challenges. Literate, intelligent people’s involvement in the public management system is also relevant in the developed countries. How do we plan to solve this problem?

First of all the management system has to be effective. We must be able to get rid of many bureaucratic functions, which on the one hand, make the management system ineffective, on the other hand completely prevent our country from developing. If the person receives little income but gains administrative tools, it is clear that they will be serving a purpose of fulfilling his personal needs rather those of the state. This means that the state management system must be renovated, which also implies a reduction in the number of functions, which in its turn means a reduction in workplaces. The formed funds will be used to increase the salaries.

Our first step was making a political decision, according to which if our state management institutions increase their efficiency by reducing the numbers of the functions and workplaces, then they should encourage the good employees with the financial savings, resulted by the reductions.

Secondly, we form financial funds, which aim to encourage the good employees, which is also a very important function. It is imperative for the talented and efficiently working people to be valued and first of all, by means of financial incentives.

Third, we are going to introduce a new mechanism, which is conventionally called “Gilyotin”. A new office will be set up in the Government, which will inventorize all the important management functions and legislation. As a result, the bureaucratic delays, procedures and workplaces will be reduced, as well as the state apparatus, which will also contribute to both, improvement of the management system and increasing the wage fund, so that we can be competitive with the private sector.

Q: Tigran Grigoryan, representative of the Foundation of Youth Clubs. - I would like to address the problem of commensurate development of the regions.
Indeed, human resources are one of the world’s most important resources, and we see that the human resource in province aims for the capital city, and from the capital city, in many cases, abroad. To what extent are you satisfied with the implementation of the principle of commensurate development of the regions? Can we expect from you, as the RA Prime Minister, some events to change this situation for the better? Thank you.

A: RA Prime Minister Tigran Sargsyan: The regional balanced development is one of the Government’s five priorities, because the situation that has been created in the RA is an obstacle for the normal development of not only Yerevan, but Armenia in general. This is a really serious problem. We must create favorable living, working and creative conditions for our citizens in the entire territory of the Republic of Armenia. People are moving to Yerevan because it is more likely for them to find a job here, the living, recreation, leisure conditions are more favorable here than in the other cities, and it means that first of all, we are obliged to implement such programs in those cities, too, so that people would live in comfortable conditions. The first problem is road-construction, and in the coming years we intend to make large financial investments to improve the state of the roads. In addition to this, water supply, electricity provision, and which is very important today, internet access. We have projects for all these directions that will change the situation for the better immensely. We are going to increase the quality of the roads, first of all due to the project started with the Asian Development Bank. This year, for the first time, modern roads are going to be built in the RA. About $1.5 billion will be spent on the implementation of this project, in order to bring the roads throughout the country to shape.

Also we should be able to objectively compare our cities and regions and to find out the communities that yield socio-economic development. State financial support should be directed to those regions. We have already identified 120 poorest communities and we offer additional software packages with privileges, social benefits and subsidies to them. Thus we are trying to smooth the unequal social status.

Other plans include the withdrawal of administrative functions from the capital city. Armenia should also have specialized capitals, like all the developed countries do. For example, we should have cultural, financial, industrial capitals. This will mean equally distributing the functions throughout the entire territory of the RA. Thus it will not be compulsory for the youth to come to Yerevan for the effective implementation of their career.

Q: Harutyun Azgaldyan, President of Youth Parliament. - Mr. Prime Minister, during the post-crisis period all the countries began to realize that for a sustainable development the positive tendency of the foreign trade is very appreciated. From that point of view, naturally, the need to increase export volumes comes along. When we consider Armenia’s export volume, we see that the export of mining resources has a huge specific weight in it, which contains elements of risk for the economy to be dependant on that particular field. What steps should be taken, in order to increase the level of diversification in this field?

A: RA Prime Minister Tigran Sargsyan: I agree with you. This should be one of the priorities of the Government. But I’d like to answer this question from the future point of view, so that you would understand better what the modern world is like and what it is to be competitive in it. The driving force of the modern world is the intellect, the ability to create new knowledge. Developed countries are not those that produce machines, but the countries that create knowledge based on which they are being produced. In other words, the industrial society leaves its place to the post-industrial society. The difference between these two societies is in the basic process. If the basic process of the industrial society is the production of goods, then that of the post-industrial society is the creation of new knowledge. Modern knowledge-based country is estimated by its abilities and the kind of infrastructures it has to create new knowledge. Armenia, unlike other countries, has no alternative other than to form a knowledge-based society, as our comparative advantage should be our intellectual capacity. At this stage of development, we shouldn’t forget that our prior purpose is to specialize in the creation of new knowledge. Only in that case we can consider ourselves a developed nation and a developed country. You should keep your focus on our country’s balance of payments and not only see the levels of exports but also notice what incomes we get from the services, what kind of potential we have there, whether our intellectual capacities will ensure the revenues. We have serious progress here. In the IT services we have about 5000 employees, as many as in the mining industry, but from the new values point of view the IT industry contributes more (the wages are higher here that in the mining industry), which means this is our future. That is why this field is currently the primal priority of the Government. We have IT development support council, headed by the Prime Minister. We held regular meeting with the representatives of the field, discuss problems, the solutions of which will provide the industry’s rapid development. I would like to inform that even in 2009, during the crisis, we ad a 17% growth in this field. This, on the one hand, will lead to a diversification of our economic system, on the other hand to the extension of service sector, as well as the improvement of the financial balance. That is the future.

Q: Shushan Bayatyan, “Young Lawyer” public organization. - According to the National Statistic Service of Armenia, in the previous year, the level of poverty in our country was 34, 1% and in 2008 23, 5%, approximately. Thus, if in 2008 every 4th person was poor, then in 2010 every 3rd person. And this happened in the period of Armenia having an economic growth. What is this level of the poverty caused by?

A: RA Prime Minister Tigran Sargsyan: We have had economic decline during those years. There are different methods to measure the poverty. We have a poverty reduction program and strategy. This has been the number one challenge facing our country for the last ten years ‘because it is unacceptable to live in poverty in the 21st century. We’ve recorded significant progress over the last 10 years, but unfortunately, in 2009-2010 we had a retreat because of the serious economic decline. The incomes of our population reduced and parallel with this the social condition became worse.

The content of our anti-crisis program is as follows: despite the fact that we had economic recession and rapid decline of state revenues, we not only should not have reduced state social programs, but on the contrary, we should have increased them. Despite the 14% economic downturn, we raised pensions, social allowances to the vulnerable groups to increase their resistance, so that they could easily overcome that critical situation.

2009-2010 inflation was the second reason of deepening poverty in Armenia. We had an unprecedented high level of prices. The target inflation for us had always been 3%, while during the crisis we had a three times higher rate of inflation that reached up to 10%. Nowadays we are implementing a policy aimed at stimulating the economic growth, and on the other hand, moderating the inflation. We already have the inflation rate of the first seven months, which shows that we are already transferring from high inflationary phase to an average inflationary phase and this year we will only have a 5% inflation rate, which is twice lower than that of the previous year. It will create more favorable conditions for fighting against inflation in 2012. Also, this year we are expecting 4.6% economic growth and, naturally, this will create more favorable conditions for poverty reduction.

Q: Sevak Mkhitaryan, “Pyunik” basketball team athlete. - We all know that sport is directly related to the youth; however there is discrimination in our country about disabled sports. In particular, we know that the sports industry receives 4, 2 billion AMD from the state yearly, but the disabled sports only 9 million AMD. What criteria are being implemented in this policy?

A: RA Prime Minister Tigran Sargsyan: First of all, I promise that I’ll get this issue under my supervision, to see how we distribute the sports budget and whether the amounts of money for the disabled are calculated correctly. Second, I promise that we will make appropriate decisions in order to create more favorable conditions for the disabled to engage in sports. As we have already started the discussions about 2012 state budget, we will make appropriate distributions in sports.

Q: Mihran Hakobyan, “Youth Program Center” public organization. - Mr. Prime Minister, you have mentioned that the future of our country is the intellectual citizen. You are the Head of the Government, as well as a member of the Republican Party of Armenia. What are your ideas about future possible engagement of young people, especially of intellectual people, in politics?

A: RA Prime Minister Tigran Sargsyan: I think in the future those parties that will be replenished with young, talented people will be successful. The 21st century is an intellectual competition century, and our country should be ruled by intellectuals to always be able to orientate in the rapidly changing world, to be able to adopt right strategy, to reveal our nation’s relative advantages and the limiting factors in a competition. I think that this is the way to prosperity and development for out nation. Nowadays we are already implementing such programs in the Republican Party of Armenia, too. The first program I’d like to point out is our cooperation with the European People’s Party. We have submitted an application and want to become an associate member of the party. You should know that this party has a majority in the European Parliament and is the strongest political force in Europe. Our cooperation with the European People’s Party is spread within the framework of constant consultations, discussions. We held a joint seminar on the value system, in Yerevan.

One of the most important issues for the parties is the value system around which the modern world is being formed. Each party must firstly clarify its ideological basis, and that is the value which leads the party. This is the field where we have serious work to do. This is where we should use the intellectual abilities of the youth.

I can see three fundamental questions on the future agenda of the RA. First one is the issue of overcoming intellectual poverty, which, in fact, is a relevant issue even today. If we overcome intellectual poverty, we will be able to overcome difficulties in the field of competition.

The second important issue relates to our identity. This is the function that should be in the spotlight. We held another seminar with the European People’s Party with this agenda, trying to understand what values modern Europe forms around after overcoming the crisis. We must also understand how Armenia, which is involved in the process of European integration, will respond to the present issues, what its answer about self identifying would be like. And the third issue for me is the challenge of our security insurance, which includes economic, military, political and cultural security. These are the challenges and the issues on the agenda that should be tackled by the young people.

Q: Vahagn Varagyan. - Mr. Prime Minister, your working style is clear and understandable; however I wonder, why don’t you adopt a more tough style? For example, why don’t you solve the problems by slamming your fist on the table?

A: RA Prime Minister Tigran Sargsyan: Thank you, this is a good question. Frankly, I’m not a supporter of such approach, because with it we in fact, don’t go forward, but the opposite, we go backwards. Our goal is to change people’s attitude towards the governing methods, I’m a supporter of a team work and collective decisions, and that means that the decisions I make as a Prime Minister, have to be balanced, should be discussed with the team, and we need to find such solutions that will open the future for us. We also try to change people’s perceptions of using rough, tough methods. If we start using such old and worn out methods, then we will repeat all the mistakes that have been made in the past and we will never move forward. We better encircle us with thinking, literate people, who appreciate the method of conviction, who while debating and discussing come up with the right decisions. It would be better to attract the society’s attention to problems with tough solutions, because very often people think that every problem will find its solution let the Prime Minister slam his fist on the table. Unfortunately, it is not so. The problems we are facing nowadays first of all demand intellectual work. There are no easy solutions and I don’t have a magic wand to be able to solve all the problems within a day. I prefer the following method: we should strengthen our team, our associates, with people who see the future of Armenia the same way we do, who come together to discuss and find solutions and afterwards implement those solutions with dedication.

Q: Artak Shaqaryan, School for Young Leaders. - Mr. Prime Minister, thank you very much for answering our questions steadfast and thorough. In our school’s admission process there is a stage, where the applicants have to write an analytical essay. This year approximately 500 applicants answered the following question: what would you advice the Prime Minister to change the situation in Armenia? The majority, about 80%, answered they would change the society’s way of thinking. I remember very well, that even back then when working at the Central Bank, you had an initiative about brain functioning, and after becoming a Prime Minister your fist step was the investment of the electronic management system, which, I would say, was a step able to change one’s way of thinking. What have you done by now to put the society’s way of thinking in a new direction?

A: RA Prime Minister Tigran Sargsyan: I think that the number one problem of the modern governments is as follows: if we claim that the main feature of the world is that it is changing rapidly, then we should change our perceptions about the world, too. We must form a society which will be able to live in a rapidly changing world and accurately respond to those changes. If the Government fails to form such society, then the Government itself will fail, because the future of that country would be failed, too. This statement is true for our Government also, we must create such society. In this rapidly changing and decreasing world we should be able to change ourselves, our looks and ideas on the world; we should not become victims of stereotypes.

The first steps that we took in the Government surprised many people. Then they became subject of criticism; they said we would not succeed. But today it seems everyone has put up with the idea that the Government is working in an electronic way. The whole mailing system, as well as the documentations is completely electronic.

People follow the Government sessions in a public and open way. We have provided an unprecedented amount of published information; have an open and transparent state budget. You can visit our website anytime and see how much has been spent and on what.

They were mocking us, saying that we had people in the state apparatus who didn’t know what a computer was. Today the reality is that you can register a venture within 15 minutes without leaving your house. This is real and we should encourage our citizens to use these services, which will inevitably bring to a change in their way of thinking.

Q: Gabriel Balayan. - Dear Mr. Prime Minister, thank you for this great opportunity. Recently there have been many talks about an outflow of investments from our country, and today we have liberated territories and NKR, where there is more need for those investments. Does the Government provide certain innovations or new policy to boost investment in the liberated territories and NKR?

A: RA Prime Minister Tigran Sargsyan: I have recently visited NKR and together with my colleague, the Prime Minister of NKR we have discussed the economic situation and the projects that have been implemented. I am glad to say that we have recorded stable rates of growth in NKR. The business environment that has been created there is very good and favorable for investments. I can even say that NKR overdid Armenia in business environment and business climate and that is the best guarantee for investors to make investments in there.

Q: Deputy Chairman of National Youth Policy Council, RA Deputy Minister of Sport and Youth Affairs Arsen Karamyan: - Mr. Prime Minister, I also want to ask you a question but not as a responsible for state youth policy but as an ordinary citizen who comes into contact with many young people. However the main problem for many young people, if we put it in a sentence, is what will Armenia be like in 20 years? How do you see it? I would like to know your vision on its future.

A: RA Prime Minister Tigran Sargsyan: Thank you. The future of any country depends on what kind of young generation it has and what values that generation lives with. The intellectual capacity of the young generation is very important, as well as the value system which is developing in our young people nowadays. I’m getting a new wave of optimist when interacting with our youth. We have multitalented, versatile developed young generation and I am sure that in 20 years Armenia will be a hundredfold more powerful than today, a hundredfold stronger standing on its feet and as competitive as ever.

Deputy Chairman of National Youth Policy Council, RA Deputy Minister of Sport and Youth Affairs Arsen Karamyan: - Mr. Prime Minister, let’s hope that in the future, at least twice a year you will allow us hold this kind of meetings. This has also some educational purpose in itself, and I think that young people will only feel lucky to be able to discuss certain issues with the Prime Minister.