Artsakh budget loses about AMD 35 million a day due to suspension of mine activities- Vardan Aramyan

ArmInfo. Daily tax losses of Artsakh due to the blockade of the Lachin (Berdzor) corridor, the only road connecting the republic with Armenia and the outside world, are estimated at 81 million drams or $204 thousand (395.9 drams per $), of which about 35 million drams are payments of mining enterprises. Vardan Aramyan, former Minister of Finance of the Republic of Armenia, international consultant on state finance management, said in response to ArmInfo's question, on March 29, presenting a report "On assessing the losses of the Artsakh economy due to the blockade", prepared by a group of economists commissioned by the Government of the Republic of Artsakh and former State Minister Ruben Vardanyan.

On December 12, the so-called Azerbaijani environmental activists demanding "to stop illegal mining" in the zone of responsibility of Russian peacekeepers blocked the Lachin corridor and demanded access to the mines. On December 28, the NK government announced that, "taking into account the unhealthy environment created by the so-called "eco-activists" of the neighboring country and their attempts to mislead the international community, it was decided to invite international organizations to conduct an international environmental review related to the activities of the <Base Metals> company. Together with the management of the company, a decision was made to temporarily suspend the development of the mine by the company until the completion of the examination."

As the authors of the report <On assessing the losses of the economy of Artsakh due to the blockade> pointed out, the responsible development of the mine is indicated by a country that is the first in the history of the Extractive Industries Transparency Initiative (EITI) whose membership status was suspended in 2017 on the basis of Azerbaijani pressure on civil society, restrictive laws and failure to implement corrective actions. Moreover, in the Environmental Performance Index, Azerbaijan ranks 104th, whle Armenia ranks 56th.

<Daily losses of Artsakh's GDP amount to $1.35 million per day, financial and economic losses - $1.9 million. provided by Armenia. In the post-war period (after the 44-day war in 2020, ed. note), about 73% of Artsakh's budget revenues come from a budget loan provided by Armenia. The remaining 27% is tax revenue, of which 7 percentage points are taxes paid by the mining industry>, the report says.

As a result of the blockade, the suspension of the main activities of the economic system also led to a decrease in tax revenues of the state budget, and if the volume of budget assistance from the RA does not increase (in the amount of about 144 billion drams, ed. note), this will inevitably lead to a forced sequestration of the budget, the authors of the report noted.

According to the state budget of Artsakh for 2023, tax revenues will amount to 185.8 billion drams, including 49.8 billion drams in taxes and other income, and 136 billion drams from the RA budget loan to Artsakh. The program indicator on expenditures will be 215.2 billion drams, the deficit is projected at 29.3 billion drams.