The so-called Panama Papers revelations about world leaders’ connections to offshore businesses that have been the highlight of world media in recent days have not bypassed Armenia either, coinciding with anti-corruption sentiments in society amid an escalation of conflict with Azerbaijan.
In the leaked set of 11.5 million confidential documents that provide detailed information about more than 214,000 offshore companies listed by the Panamanian corporate service provider Mossack Fonseca also figures the name of Mihran Poghosyan, the head of a powerful bailiff service at the Armenian Ministry of Justice. An investigation on Poghosyan’s offshore businesses has been carried out by the Hetq magazine.
While the Armenian police say they are looking into the report concerning the senior official, anger is mounting in Armenia over government corruption in conditions of a major outbreak of violence in the Nagorno-Karabakh conflict zone with Azerbaijan.
The escalation of conflict in which scores of Armenian servicemen were killed and more than a hundred were wounded has revealed the issue of armament of the army that government critics say is insufficient. At the same time, opposition and civil society representatives point at multimillion dollar expenses of government officials and agencies on luxury cars and complexes as well as allegations about their sizable assets at offshore accounts.
What particularly sparked a public outcry were remarks by President Serzh Sargsyan that in the April 2-5 fighting in Nagorno-Karabakh Armenians used weapons and military hardware produced in the 1980s. And although Defense Ministry representatives have repeatedly stated afterwards that the Armenian armed forces also possess modern weaponry, many in Armenia feel that these assurances are not enough.
Active media and civil society representatives are making different publications on Facebook with estimations showing how much money could be spent on rearmament if budget funds were not squandered by officials.
The publications, which are mostly accompanied by several hashtags on the subject (such as “there is money”), speak not only about inefficient expenditures from the state budget, but also about the assets and property of state officials, such as their expensive luxury houses and cars.
Active campaigners point out the spending of $45 million by the Ministry of Finance and the Central Bank on construction of a training center for tax officials in Dilijan. In particular, they are amazed at the $80,000 expenses for kitchen utensils for the center. Or, for example, the renovation of the three halls of the government building on which $500,000 has been spent.
Senior economics reporter at the pro-opposition Haykakan Zhamanak daily Hayk Gevorgyan has written a series of stories on inefficient spending of public funds.
According to him, even though the Central Bank and the Ministry of Finance did not directly use budget funds for the construction of training centers, those were still expenses from public coffers.
“The Central Bank got that money through two bond emissions. The scheme of the Ministry of Finance spending is still unclear. But if the government wanted, it could easily establish its origin. The schemes of the spending of these sums are unknown to the public, but they are known to corresponding departments,” he told ArmeniaNow.
“It is clear that there is not a penny of private investment in these projects. And whatever is not private eventually becomes a burden for the taxpayer, including the bond emissions by the Central Bank,” Gevorgyan added.
Tsovinar Nazaryan, an activist who has for years campaigned for reforms in the army, believes that now it is time for officials to be held accountable for misappropriating and squandering money intended for the military.
“For years, [President] Serzh Sargsyan built his pre-election campaigns on the argument that we have a poor economy because we spend a lot on the army. But today it is already impossible to hide that it was a big lie,” Nazaryan wrote in the Hraparak daily.
Armenian officials brush aside accusations of large-scale government corruption and that it could affect the nation’s defense capabilities, insisting that the Armenian army is well armed and equipped to resist any aggression from Azerbaijan against Nagorno-Karabakh or Armenia proper.