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The challenge of long-term growth
Yerkir.am
July 21, 2006
By Mher Ohanian
The current developments in the world economy indicate that hi-tech
economies based on knowledge are the key components of the geopolitical
status of the leading countries.
For countries with changes systems, such as Armenia, this should also
be a model, otherwise, Armenia could become non-competitive and rely
only on delivering qualified human resources to developed countries.
Experts of large donors, and first of all those of the World Bank,
continue to search ways to help the country. Several new researches
have been done that deal with the economic growth based on knowledge
and novelty. Armenia, landlocked and with low income but with educated
population, has no other alternative than to rely on knowledge-based
economy.
WB experts said in their report that "the quality and vitality
of Armenia's economic recovering remain a concern," as it is not
clear what the sources for midterm and long-term growth would be. In
the decades to come, Armenia could use its competitive advantages -
educated labor force and Diaspora - but it requires formation of such
institutional environment that would encourage a creation, spreading
and activity of the current knowledge.
The paradox of economic growth
The WB experts have rightly noted that in the past decades the
Armenian economy has been growing due to fields with limited employment
opportunities, such as agriculture, energy sector and construction.
Meanwhile, the industry that has the greatest potential has retreated.
Especially the fields that require skills and the science-consuming
fields have lost ground, while the growth has been registered in fields
like jewelry processing, food processing, construction and metallurgy.
The export structure also comes to prove the economy weakness. Exports
of raw materials, precious metals and gems as well as processed food
remain the main items on the export list of the country. One of the
main paradoxes of the economic growth is that the incomes of the
population grow non-proportionally. The corruption level also remains
too high.
The paradox of the economic growth comes to a question: could the
economic growth of the recent years ensure a long-term development
or would it retard and then speaking of new cycles of economic would
be useless?
Yerkir.am
July 21, 2006
By Mher Ohanian
The current developments in the world economy indicate that hi-tech
economies based on knowledge are the key components of the geopolitical
status of the leading countries.
For countries with changes systems, such as Armenia, this should also
be a model, otherwise, Armenia could become non-competitive and rely
only on delivering qualified human resources to developed countries.
Experts of large donors, and first of all those of the World Bank,
continue to search ways to help the country. Several new researches
have been done that deal with the economic growth based on knowledge
and novelty. Armenia, landlocked and with low income but with educated
population, has no other alternative than to rely on knowledge-based
economy.
WB experts said in their report that "the quality and vitality
of Armenia's economic recovering remain a concern," as it is not
clear what the sources for midterm and long-term growth would be. In
the decades to come, Armenia could use its competitive advantages -
educated labor force and Diaspora - but it requires formation of such
institutional environment that would encourage a creation, spreading
and activity of the current knowledge.
The paradox of economic growth
The WB experts have rightly noted that in the past decades the
Armenian economy has been growing due to fields with limited employment
opportunities, such as agriculture, energy sector and construction.
Meanwhile, the industry that has the greatest potential has retreated.
Especially the fields that require skills and the science-consuming
fields have lost ground, while the growth has been registered in fields
like jewelry processing, food processing, construction and metallurgy.
The export structure also comes to prove the economy weakness. Exports
of raw materials, precious metals and gems as well as processed food
remain the main items on the export list of the country. One of the
main paradoxes of the economic growth is that the incomes of the
population grow non-proportionally. The corruption level also remains
too high.
The paradox of the economic growth comes to a question: could the
economic growth of the recent years ensure a long-term development
or would it retard and then speaking of new cycles of economic would
be useless?