International ConferencePublic Financial Management in the Era of “The New Normal”Social Control Mechanisms for Greater Transparency and Accountability

Varazdat Karapetyan, PhDArmeniaGCCI, Advocacy and Assistance Center

A visitor of AAC told his story:“My daughter was born five months ago. She was born prematurely, in her seventh month, and was very weak. The doctor worked hard to successfully improve her strength. Now each time we visit him for a consultation, his assistant requests 50 USD. I give him the money, although according to health care legislation in Armenia, medical care is absolutely free for children under seven years old.”

Illustrative Case of Corruption

-He is ready to pay the bribe each time for his family and child’s wellbeing.- He does not want to fight for his rights because he wants to have good relations with the doctor.-The same situation exists in the fields of health, education, justice, state cadastre, taxation etc.

How can we solve this problem?

Case Analysis

Systemic Analysis of the Case I give a bribe

to the doctor.

I don’t trust state service.

I pay taxes with

displeasure or pay part

of the amount.

The state budget is not

fulfilled.

The state budget

cannot fully support the health field.

The hospital isn’t repaid

the equivalent amount to

cure a child.

The doctor’s salary is not equivalent to

the job he does.

The doctor requests

additional payment for the cure of the child.

What Needs to Happen?-All parties must realize the holistic picture of the cycle, and the role and responsibility of each participant.-Dialogue and cooperation between all stakeholders and parties of the cycle: doctors, hospital administrations, government, citizens, etc. -New approaches of management: from a central planned economy to a free market economy.

AAC as the Local Leader of Systemic Reform- Works in all regions of Armenia, is localized.- Creates public-private dialogue and cooperation. - Supports systemic reforms through quick responsive actions and advocacy work.- Directly responds to local corruption cases, helping citizens and companies to be protected and informed.

Gegharkunik AAC: Example of Systemic Reforms- Tax legislation changes created a dispute between 100 businesses of Gavar and the Tax Office. - The Tax Office heavily fined 10 businesses. All other businesses faced corruption risk and tax officials started to extort them. - Businessmen threatened to close the shops and stop working, giving reasons that it is impossible to pay the heavy tax fees or bribes.

- AAC organized three meetings between business owners and the Tax Office. Results:-The Tax Office promised not to fine businesses for a period of two months. - The Tax Office held seminars to explain tax changes in a more easily understandable language for business owners. - The business owners promised to work in accordance with the new tax legislation, and learned that the tax changes really aren’t detrimental.

Gegharkunik AAC: Example of Systemic Reforms

A survey of corruption shows that one of the most corrupted offices in Armenia is the State Registry of Enterprises.-The businessmen are uninformed about fees, documentation, timelines, etc. for registering new enterprises. - Officials take advantage of their lack of information and extort startup businesses.AAC’s response:- Gegharkunik AAC installed informational bulletin boards in all 5 state registration offices of the region.

Gegharkunik AAC: Example of Systemic Reforms

- A disabled citizen applied to AAC because a medical committee unjustifiably deprived her from her disability pension without any reason. AAC’s response:- An application to the corresponding medical committee. They refused to comply.- A second medical examination was carried out in the capital.In the result:Re-establishment of the right to receive the pension, and repayment of the amount that had not been paid.

Gegharkunik AAC: Individual Success Stories

- The citizen applied to AAC, announcing that the traffic police gave him a fine for no real reason.AAC’s response:- Requested a copy of the traffic fine from the Regional Police Department.- Filed an appeal against the traffic police actions before the National Police. Results:The fine was annulled, and the visitor’s rights were protected.

Gegharkunik AAC: Individual Success Stories

Thank you for your time and attention!Questions are welcome…