Why Salaries and Pensions are Increasing: Gagik Hambaryan

Political scientist Gagik Hambaryan wrote on his Facebook page: “Why are salaries and pensions being raised? One of the popular recent decisions by Prime Minister Nikol Pashinyan is to increase pensions by 10 percent and the minimum salary by 13,000 drams… Important decisions, considering the fact that previous governments did not want to talk about this at all and kept the people on a 'short leash' so that they wouldn't become too aware of what it meant to live well, a privilege of the elite, who enjoyed selling their votes cheaply to the authorities during elections…

In many cases, it was precisely the socio-economic difficult conditions and social injustices that brought the people out to the streets in the spring of 2018, resulting in the downfall of the Republican Party’s government. Pashinyan’s formed government was unable to combat the sharp inflation that occurred after the Velvet Revolution, which caused the population's living standards to decline even further than under previous administrations… In an attempt to somewhat rectify the situation, the salaries of workers in the healthcare, defense, and police sectors were raised to some extent, but this did not significantly improve the social conditions of the broader society.

Just a year after the revolution, Mr. Pashinyan’s government decided to raise pensions and the minimum salary. This is a very pleasant, commendable, and important step from the authorities. However, alongside the information about the increase in minimum salaries and pensions, Armenian media outlets report that starting January 1, 2020, the price of gas for Armenian consumers will increase by 16.5 to 35 dollars per thousand cubic meters (different sources report different figures). The Armenian authorities neither deny nor confirm this information, simultaneously stating that Armenia will receive cheaper gas until December 31 of this year, which is realized at the expense of 'Gazprom Armenia’s' internal capabilities. It is clear to everyone that if the gas price rises, it will have a multiplicative effect, also raising the prices of basic consumer goods such as bread, dairy products, and services like transportation...

Even without an increase in gas prices, 'Gazprom' will likely not agree to subsidize gas prices as it did in 2019, and will resort to a policy of mass layoffs, which has recently been highlighted by Russian media, significantly increasing the number of unemployed and creating socio-political problems for the current government...

In my opinion, the reason for the increase of 13,000 drams in the minimum salary and 10 percent in pensions starting January 1, 2020, is to combat the expected inflation due to the likely increase in gas prices; that is, the authorities are trying to somewhat compensate for the negative impacts of the expected rises in prices and services starting January 1. It turns out that the positive effect of pension and minimum salary increases will not be felt by the broader population in terms of their wallet; if I may say so, for example, for residents of the Shirak region, who heat their homes for six months of the year, these increases may even be insufficient...

P.S. Let's await the conclusion of the ongoing 'gas' negotiations between Yerevan and Moscow and their results before we fully rejoice or mourn about the increase in pensions by 10 percent and the minimum salary by 13,000 drams…”