by David Zenian
What do you do if you need 40 million dollars per year to run the essential services of your city and all you have is less than six million?
You go to Yerevan Mayor Vahagn Khatchadrian for some useful tips.
"The weather helps a lot," he tells his visitors with a smile.
What Mayor Khatchadrian means is that compared to the harsh months of winter when nothing seems to work, and complaints not only multiply but reach almost unrealistic proportions, his job becomes easy when the temperature is above freezing point.
"For a city the size of Yerevan, my administrative nightmares are much larger than those of Moscow, New York or Hong Kong," Khatchadrian said in a recent interview. "Everything from energy to the medical needs of Yerevan's 1.5 million population depends on this office. They blame me for everything that does not work, and that's not a good situation to be in."
Appointed Mayor in December 1992, Khatchadrian, however, has mastered the art of juggling the city budget and meager resources but out of sheer necessity and not political survival like his counterparts in the United States and other western cities.
"Money, money, money ... it takes money to run a city. It takes money to collect the trash, money to heat homes, hospitals and schools. Money to keep the public transportation operational.
"But whichever way I turn, I am short of cash. This capital city of Armenia is short - very short - on cash," he said. "If New York is without electricity, heat and adequate food supplies for a week, the first thing you will do is get rid of the Mayor. It is human nature to blame the city Mayor for everything."
And complaints from the city's residents hit avalanche proportions in the months of winter when power shortages become more acute and the city's vital signs are gradually buried under a blanket of ice and snow.
This year's first snowstorm hit Yerevan on November 6 , a rude reminder of yet another winter of hardships.
During the winter of 1993-94, the Yerevan Municipality was down to its last 125,000 U.S. dollars with which to run the city.
On the books at least, Yerevan has an annual budget of 40 million U.S. dollars, but in real terms "we are lucky if the government actually allocates six million dollars," Khatchadrian says.
"It's like trying to fry a fish without oil ... even the best fish burns and is destroyed. Maybe we should get used to eating raw fish like the Japanese," Khatchadrian says with a smile.
But unlike others in similar administrative positions, Khatchadrian does not complain. "One should not criticize if he is not going to get out there and figure out how to get things done," he says.
Khatchadrian knows his limitations, and is busy working out imaginative approaches in an effort to cope with the shortages.
As Armenia's largest city around which 80 percent of the nation's heavy industry is clustered along with 90 percent of its educational institutions and 90 percent of the cultural life of the country, Yerevan is a guzzler.
"Like the old days, most of the city services are essentially free. We have almost no revenue. People just do not pay their bills, and under the present conditions, I don't know how we can make them pay," he said.
Among the striking examples are the city's hundreds of streetside public telephones, which are free because the municipality, and the telephone company it subsidizes, does not have enough money to replace their coin slots to accept the new currency.
The subway ride in Yerevan is five Drams and a loaf of bread is sold in government bakeries at only six Drams when it costs more than 60 Drams to produce. The exchange rate has recently been hovering around 400 Drams to one U.S. dollar.
Other city services like garbage collection, electricity, water, emergency services, hospitals and other state-run enterprises are all heavily subsidized by the Yerevan Municipality.
"The city of Yerevan has no real revenues ... only expenses," he says.
So how does Khatchadrian make both ends meet. He improvises.
For example, to keep public transportation running, Khatchadrian has devised a "profit sharing plan" under which the operators of city busses cover their own fuel costs in return for permission to charge higher fares and a cut of the revenues from the Municipality.
The plan, seen as a first step toward the privatization of several sectors of public transportation, has not only meant a source of income for the city, but also a noticeable increase in the number of busses now operating in Yerevan.
Encouraged by its initial success, Khatchadrian and his crew at the Yerevan Municipality have devised - or improvised - similar methods to keep the city's ambulance fleet, police cars and other essential means of transportation running.
With practically all formerly government owned gas stations closed because of chronic fuel shortages, Khatchadrian has turned to the private entrepreneurs for an answer to his problem.
"We introduced a sort of Value Added Tax - Armenian style - on the private gas stations and individuals selling petroleum products out of mobile tankers on the streets of Yerevan," he said.
In the absence of a practical system of taxation, the Yerevan Municipality collects 40 liters of petrol per day from all "independent vendors".
"The system is working effectively and the Municipality no longer dips into its already depleted budget to meet its fuel needs. What we collect from the independent vendors keeps our ambulances, police cars, trash trucks and other vehicles in service," he said.
Falling back on what amounts to a "cross between indirect taxation and barter arrangements", Khatchadrian also provides electricity to profitable enterprises for a "considerably" higher fee than the average household or small store.
"We charge more to those factories which can make a profit if they stay open and produce. The cash we generate from the sale of extra energy to these factories is used for the city's other needs, including the purchase of more fuel," he says.
With these various "barter" deals, Khatchadrian has already improved several city services and is convinced the winter of 1994 will be easier on the population than in previous years.
"Last winter we were able to heat only 700 of Yerevan's 5,500 high-rise apartment buildings. This year, we will provide heat to 2,100 buildings and keep the metro (subway) running along with most of the electric street-cars," Khatchadrian says.
"Things will get better," he adds stoically.
