Will the basket be full?

A law that would establish a legal basis for determining the basic needs of Armenian families has passed the first reading in the Parliament of Armenia.

The "Minimal Consumer Goods Basket and Minimal Subsistence Budget" would provide a guideline for State aid to the vulnerable, and would influence such matters as minimum wage and pensions. If the new law is finally approved, it would be independent Armenia's first legislation of its kind.

According to the draft "contents and structure of consumer goods basket must be provided by law". And the level of minimal subsistence budget must be fixed once a year "based on data of the National Statistical Service concerning consumer cost of food products, nonfood goods and services included into minimal consumer goods basket".

But while the National Assembly has agreed on the idea of the law, the preliminary version lacks specific and, critics say significant, detail. Specifically, it does not include a recommendation of what the minimal subsistence baseline should be.

Rather, the first read version says the government should establish its help for the socially vulnerable "based on internationally accepted physiological, healthcare and social norms".

Speaker of the National Assembly Artur Baghdasaryan said it was a realization of a memorandum signed by the coalition according to which "economic policy of the government must have emphasized social orientation".

According to the proposed legislation, the specifics of the "food basket" law would be determined based on another law, which the coalition would introduce in the middle of next year.

The current version is "the law on law" said Viktor Dallakyan, secretary of Ardarutiun oppositional block and a critic of the draft.

The oppositional block proposed amending the draft to make provisions requiring the government to include a variety of goods and marketed services (water, gas, electricity). Further, the measure of the minimal subsistence budget must be included in each year's specified budget.

Contents of the minimal consumer goods basket will be recalculated every five years according to the draft.

"If the National Assembly fixes a certain level and the Government won't be able to bring that into life then the Government must tender resignation," Dallakyan said.

Introducing the draft, the Armenian Revolutionary Federation (Dashnaks) party's Levon Mkrtchyan initially considered Dallakyan's offers acceptable, however, those proposals hadn't been included in the draft put to vote, leading two parliamentary forces Ardarutiun and National Unity to boycott voting. (It is possible that those proposals will be discussed before the second reading.)

Dallakyan also presented figures concerning the standard of living in Armenia.

According to data of the National Statistical Service, bread and potatoes make more than 70 percent of the daily ration for 1.5 million of the population, meaning that 70 percent of the population's diet is less than the 2,100-calories of international standard.

And the deputy stressed the plight of Armenia's poor, citing figures showing a population consisting of 530,000 pensioners, 114,000 disabled, 42,000 orphans and 40,000 large (four or more children) families.

According to United Nation data, Armenia's "indigent" are those who have income less than $1 per day and "poor" are people who earn less than $2 per day. According to Dallakyan, that layer of society makes 80 percent of the population of Armenia. Only 50 percent, however are officially recognized.

In 1997 the Government of Armenia rendered a decision on working out a minimal consumer goods basket. However, it wasn't made public and the citizenry was not informed about figures that were taken as a basis for paying minimum wages, pensions and allowances and for calculating per capita income spent by the state budget.

According to that decision every three months the National Statistical Service was calculating the cost of minimal consumer goods basket and presenting it to the Government. As it became clear during discussions, for the second quarter of 2003 the basket was calculated according to the standard of 2,100 calories and came to about $26 per person, with foodstuffs accounting for about $16 of that amount.

Presently, the poverty line is considered to be about $22.

Whatever its final form, the new law would not influence the 2004 budget.

"We will have much time to discuss the structure of minimal basket and methods of calculation," Mkrtchyan said.

It is expected that the law will come into force beginning January 1, 2004 (and would effect subsequent budgets), however, it is hardly known outside the Assembly hall.

Pensioner Nora Harutyunyan says she doesn't follow the discussions and has no expectations for positive changes. She only knows about expected increases in her costs of living.

"What are we going to do? Even without that we are buried in debts," she says. "We can't even cover debts for gas and water."

Teacher Seda Sargsyan, has followed the minimal basket debate closely. Her profession has been promised a raise in January that will bring her salary to about $60 per month. The process of fixing a minimal standard encourages her but:

"I understood only one thing; that the law is not perfect and it was not clear for me when it would be realized."