IN THE NAME OF THE REPUBLIC OF ARMENIA

ON THE CASE CONCERNING THE DETERMINATION OF CONFORMITY WITH THE CONSTITUTION OF THE PROVISIONS SPECIFIED IN THE DEVELOPMENT CREDIT AGREEMENT (HEALTH FINANCING AND PRIMARY HEALTH CARE DEVELOPMENT PROJECT) BETWEEN THE REPUBLIC OF ARMENIA AND THE INTERNATIONAL DEVELOPMENT ASSOCIATION SIGNED IN WASHINGTON ON SEPTEMBER 2nd, 1997

Yerevan, 18 February, 1998

The Constitutional Court of the Republic of Armenia consisting of G. Harutiunyan (Chair), V. Hovhannisyan (Deputy Chair), and Members of the Constitutional Court A. Giulumyan, A. Tokhyan, H. Nazaryan, R. Papoyan, V. Sahakyan, M. Selyan, in the presence of the official representative of the President of the Republic of Armenia G. Stamboltsyan, the Minister of Health, and the invited officials A. Darbinyan, the Minister of Finances and Economy, T. Petrosyan, Deputy Minister of Justice, M. Topuzyan, Chief of Legal Department of Armenian Government’s Staff, A. Mkrtichyan, Chief of State Health Agency attached to the Government, in accordance with the Articles 100 (par. 2) and 101 (par. 1) of the Constitution and the Article 5 (par. 2), the Article 25 (par. 5), the Articles 56 and 67 of the Law on Constitutional Court of the Republic of Armenia, held an open-door hearing of the case concerning the determination of conformity with the Constitution of the provisions fixed in the Development Credit Agreement (Health Financing and Primary Health Care Development Project) between the Republic of Armenia and the International Development Association dated Sept. 2nd, 1997.

The hearing of the case was caused by an application to the Constitutional Court of the President of the Republic of Armenia in regard to conformity with the Constitution of the provisions specified in the above mentioned Agreement.

Having heard a report of A. Giulumyan, Member of the Constitutional Court, comments of G. Stamboltsyan, Representative of the President of the Republic of Armenia, clarifications of the invited persons A. Darbinyan, T. Petrosyan, M. Topuzyan, A. Mkrtichyan and examining the Agreement with the relevant documentation, the Armenian Constitutional Court DETERMINED:

According to the Development credit Agreement (Health Financing and Primary Health Care Development Project) between the Republic of Armenia and the International Development Association dated Sept. 2nd, 1997, the International Development Association is committed, by June 30th, 2002, or a later date to be determined by the same Association, to provide Republic of Armenia with various currencies at the amount of seven million two hundred thousand Special Drawing Rights units (SDR 7.200.000) which is currently equivalent to US$ 10.000.000.

An inseparable part of this Agreement are five appendices published by the International Development Assosiation on January 1st, 1985, and entitled «General Conditions Applied to Agreements on Development Credits».

The credit is granted for a period of 35 years on general terms and 10 years on beneficial terms.

The Republic of Armenia is under an obligation to repay the credit with biannual installments, within the term from January 1st, 2008, to July 1st, 2032.

The Republic of Armenia being the recipient of the credit is committed to implement the Project with maximum efficiency with the main purpose to raise the quality of the primary health care, to make these expenses targeted, to secure the participation of communities in determining the local health care priorities and the preservation of the basic health services.

The Project consists of two parts. Part 1 is devoted to the development of education projects and organization of the teaching course at the National Health Care Institute, State Medical University, and Medical Secondary School for specialists in primary health service, so as to renovate the educational facilities providing them with proper equipment, to facilitate prevention of disease, diagnostics, educational therapeutic programs and development of guidelines for primary health care as well as to establish training in this area.

Part 2 of the Project concerns the system of health care funding and is aimed at facilitating the establishment of the state health agency, providing the Health Ministry with office computer and furniture sets as well as providing technical assistance and skill enhancement of the specialists in financing and health care evaluation.

The Republic of Armenia is committed to provide a reliable financial accounting system with regard to the Project, its operation, its resources and expenditures, not later than six months following the termination of each year to provide the Association with the results of audit expertise by independent inspectors and acceptable for the Association.

To manage the implementation of the Project, the debitor shall establish a Project Management Board.

The Project provides for set up of a Project Management Unit, whose current costs will comprise about 12 percent of the credit amount, as well as a Primary Healthcare Development Education Co-ordinating Council which shall be responsible for the implemention of the first part of the Project.

In the discussion process it has also become clear that instead of establishing the limited number of new offices for family doctors previously agreed upon, an agreement has to be achieved with the creditor to provide the population with the efficient primary health care with the emphasis on the radical improvement of the existing system.

An additional provision of the credit agreement is establishment by the debtor of a state health care agency. According to the Republic of Armenia’s Government Decision No.593 of Dec. 18th, 1997, the agency of this type has been established, however, its bylaws have not been approved yet. That decision, anyway, is still to be reviewed with regard to the establishment procedure as well as to determinination of the agency’s functions.

In accordance with the Article 34 of the Constitution, “...each person has the right of health protection. The procedure for medical assistance and service is defined by law. The State implements the programs of health protection of the population».

However, during 1996-1997 the Government of RA failed to take the necessary and proper steps to meet completely the requirements of the Article 34 of the Constitution and the Law on Medical Aid and Service to the Population of RA.

According to the Constitution of the Republic of Armenia the Armenian Government is responsible for implementation of the programs on health protection of the population. They are characterized by law as annual target programs directed at providing the population with health protection; following the approval by the Government, those programs are to be published by the mass media (the Law on Medical Aid and Service to the Population of RA, the Article 1, par. 3). Moreover, the Law is secured every person to have the right to get the medical aid and service free of charge within the framework of the special state programs guaranteed by the state (the Article 4, Part 2), moreover, every child, within the framework of the special health care state programs has the right to medical aid and service free of charge (the Article 10).

Despite the fact that the said law was officially entered into force in April 1996, however the first attempt to adopt a state targeted program took place in May 1997 without complete conformity with current legislation.

Such a situation resulted in a significant distribution in 1997 of assets allocated for health care within the state budget (the Governmental Edict No. 44, 19.01.1998), when the said projects did not exist and state health care institutions were not developed properly and could not ensure implementation of the first Article of the Constitution of the Republic of Armenia by which a social state paying the proper attention to the health protection of the population has been declared.

Improvement of population health care is also provided by the credit agreements «Structural Reform Project-2» and «Technical Assistance in Structural Reform Project-2». By the last agreement the consultation services, excluding the renovation of hospitals, is also provided for.

The task of of the targeted use of credit and budgetary assets provided for the health care system is directly linked with conformity with the constitutional requirements, and that system requires to be improved substantionally.

In accordance with the hearings, evaluating the law enforcement practice and being governed by the Article 100 (par. 2), the Article 102 (Sections 1 and 2) of the Constitution of RA, the Article 5 (par. 2), the Articles 67 and 68 of the Law on the Constitutional Court of RA, the Constitutional Court of the Republic of Armenia DETERMINED:

G. Harutiunian
President of the Constitutional Court