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 December 6, 2002 
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Field Trip: Armenian delegation goes to Hungary for lessons in city finance


As part of its technical assistance and training to Armenian municipal officials, the United States Agency for International Development sponsored a trip of Armenian finance specialists to Hungary last week.

The delegation comprised of eight finance directors form different cities of Armenia, representatives from the Ministry of Finance and US based Urban Institute visited four cities in Hungary, where they met with their Hungarian colleagues in finance and economic development.

The four hosting cities in Hungary were specifically chosen to match with the size and population of Armenian cities. Other than Budapest, the delegation visited Zsolnok, Hatvan and Nyiregyhaza.

Social and political restructuring started in early 1990s brought about significant improvements in the economic state of Hungary.

In 1990 Constitutional revisions of the article on government determined the role and responsibilities of the local governments of Hungary and identified its commitment toward decentralized governing.

"The purpose of the trip was experience exchange, as well as learning about local governmental finance practices of more advanced Hungarian local government" says Artur Drampyan, Resident Advisor at the Urban Institute, who accompanied the group to Hungary.

Within a short period of structural reforms Hungarian local governments were granted with significant powers and decision making rights.

According to the Hungarian legislature cities can choose what taxes to impose locally. Most cities choose tax on business activity, since it brings more income to the local budget than any other sources of funding.

Unlike Armenian cities, Hungarian cities may have bank accounts, construct and sell multi apartment buildings, make administrative decisions, such as prohibition of alcohol use in public. Also the municipalities can decide to wave the tax on businesses in order to attract them into their location.

"It was an interesting visit, however Hungarian legislature is far too advanced in providing the cities with autonomy and independent decision making powers," says Vahan Movsissyan, head of the Local Finance Officers Association of Armenia. "Armenia is far behind in this respect."

"The roles and rights of local government in Armenia are extremely limited, so we can hardly implement the small part of the work that Hungarian colleagues do" says Artur Sukiasian, Finance Department Head at Vanadzor Municipality.

It was a nice surprise for the Armenian delegation to know that according to Hungarian legislature the national minorities residing in Hungary can form their own local government. Together with Slavonic, Czeck, Poland and German local governments the Armenian community formed its local government in Nyiregyhaza.

At the meeting with the delegation from Armenia, Armen Malhazian, the head of the Armenian local government of Nyiregyhaza, talked about the Armenian community comprised of 50 families. Malhazian, who lived in Hungary for the last 20 years, talked about the cultural events organized within the Armenian community. He described the role of the national community in preserving the cultural inheritance and traditions of the Armenian community.

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