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Nagorno-Karabakh Region Predicts Strong Growth In 2012

Deputies in the Nagorno-Karabakh parliament approved the budget

Deputies in the Nagorno-Karabakh parliament approved the budget

STEPANAKERT -- Deputies in the parliament of the breakaway Azerbaijani region of Nagorno-Karabakh have approved a 2012 budget for the Armenian-controlled territory that projects less spending and robust economic growth, RFE/RL's Armenian Service reports.
The budget calls for a less than 1 percent increase in public spending, which is due to total 70.3 billion drams ($184 million). Budget revenues are projected to be 65.1 billion drams.
Annual subsidies from Armenia will continue to account for most of that revenue. The subsidies, officially called "interstate loans," are expected to reach about 36 billion drams in 2012.
The budget does not include funding for infrastructures projects in Nagorno-Karabakh that has long been provided by the worldwide Armenian diaspora. The bulk of that financial aid is channeled into the disputed territory through the Hayastan All-Armenian Fund.
The pan-Armenian charity based in Yerevan has received over $30 million in mainly diaspora donations this year. Most of that money is due to be invested in 2012 in the ongoing reconstruction of Karabakh's water-distribution network.
"It's going to be a tough year and we need to toughen [fiscal] discipline," Ara Harutiunian, prime minister of the self-proclaimed Nagorno-Karabakh Republic (NKR), told his cabinet earlier this month.
"We will be carrying out essential social expenditures in the first instance," he said.
The budgetary targets are based on the assumption that the Karabakh economy will grow by 9 percent in 2012.
The Karabakh government anticipates the same approximate growth rate this year. According to Spartak Tevosian, head of the region's finances, virtually all sectors of the local economy have posted major gains.
Karabakh's Gross Domestic Product is mostly generated by agriculture and food processing.
Armenian Prime Minister Tigran Sarkisian praised Karabakh's "impressive" macroeconomic performance when he visited Stepanakert in August. "The existing indicators give us reason to hope that in the coming years Nagorno-Karabakh's economy will enjoy a steady pace of development," he said.
Karabakh has increasingly become politically, militarily, and economically integrated with Armenia since winning de facto independence from Azerbaijan in the 1991-1994 war. The region has a population of some 138,000 people.

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