COVID Brief: Accountability of the COVID Fiscal Response in Armenia
The dual crisis of the COVID-19 pandemic and Nagarno-Karabakh war have had a significant impact on Armenia and the region more broadly. The first confirmed COVID-19 case in Armenia was confirmed on March 1, 2020. Subsequently, a state of emergency was announced 15 days later.
The declaration of the state of emergency on March 16, 2020, kicked off the formulation of specific measures aimed at countering the economic and social consequences of COVID-19. On March 26, the Executive established the Comprehensive Program on the Measures (Actions) for Countering the Consequences of Coronavirus and announced the first five social and economic measures in the program. In total, the Armenian government adopted 25 such measures, all through government decrees (the last of which was adopted on September 22, 2020). Following the war with neighboring Azerbaijan over NagornoKarabakhon, on September 27, almost all the measures were stalled.
The assistance package for addressing the consequences of COVID-19 is estimated at USD 300 million. The National Assembly subsequently approved a draft to address some of the limits stated in the Law on the 2020 State Budget. This allowed the Executive to overcome the limits of government reserve funds and limits on re-allocation, to increase the nominal size of the budget deficit (by about 320 billion Armenian Drams or by around USD 660 million), as well as allowing for the use of additional income sources, including foreign sources, to cover that deficit.
Confidence in the government was shaken following the war and Armenia called for early elections on June 20, 2021. The elections were held against the backdrop of existing tensions following a months-long political crisis fueled by the defeat of Armenian forces against Azerbaijan in a six-week war over NagornoKarabakh from September 27, 2020 to November 10, 2020.
The party of acting PM Nikol Pashniyan won the snap election. The Organization for Security and Cooperation in Europe International Election Observation called the elections free and fair. The head of Armenia's Central Electoral Commission, Tigran Mukuchian, said the election "on the whole" was conducted in line with local rules and regulations. A new cabinet was formed in August 2021, and the newly formed government submitted the budget for fiscal year 2022 by October of 2021. The budget was eventually adopted on December 9, 2021, before the start of the fiscal year.
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