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The Logics Of The New Developments

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  • The Logics Of The New Developments

    THE LOGICS OF THE NEW DEVELOPMENTS
    By Mher Ohanian

    Yerkir.am
    June 09, 2006

    New rapid developments are under way in the world market, and
    they significantly affect the economies of transitional countries,
    including Armenia.

    And this is especially true for basic sectors of economy, such as
    mine industry, electronics and high technologies. The competition
    between the euro and dollar as well as roaring prices for oil and
    gold also have their indirect impact on the Armenian financial market.

    External factors

    It is a fact that the Armenian economy can develop only as an open
    system that is integrated in the world economy. A self-isolation
    could prove devastating.

    It is evident that the situation in the world market for Armenia to
    develop its basic sectors is currently very favorable. First of all,
    it applies to the unprecedented hike of the prices for color metals:
    copper, molybdenum, nickel and aluminum. For example, the price for
    copper in the world market has grown three times in the past 3-4
    years, reaching $8,000/ ton. If used efficiently, this factor could
    ensure serious income for the sector and could help modernize the
    color metal industry of the country.

    Armenia is among the number of transitional countries that managed to
    ensure a double-digit growth in the past six years, while, according
    to experts, countries in transition usually are hit by two waves
    of economic decline: the first one begins in the beginning of the
    transitional period and though lasts for a short period but leaves
    devastating consequences.

    Armenia's 'transformational decline' was one of the worst among the
    CIS countries, when between 1990-1993, Armenia lost sixty percent
    of its economy and more than 1 million jobs. After a cease-fire in
    the Karabakh war was reached in 1995, the Armenian economy showed
    progress in terms of its macroeconomic figures.
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