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"LIFE SAVER" OF THE ARMENIAN ECONOMY
Vestnik Kavkaza
Oct 18 2012
Russia
Susanna Petrosian in Yerevan. Exclusively for VK
The volume of non-bank transfers to individuals in Armenia in the
first eight months of this year exceeded one billion dollars.
According to the Central Bank of Armenia, when compared to the first 8
months of last year, the volume of transfers has increased by 10%. All
transfers in 2011 totaled 1.28 billion dollars. Russia is the leading
donor country (83%) and accounts for over 870 million dollars. The
second-largest donor country is the United States with 5.3%. Ukraine
(1.3%) is the third largest donor.
However, the influx of money into the country is not limited to bank
transfers. Armenian guest workers, mostly working in Russia, often
visit their families in Armenia and, of course, bring them the money
they earn. Therefore bank transfers can be considered the level of the
inflow of money to Armenia. The increase in the inflow of money affects
prices in Armenia. A direct link between money coming into Armenia from
abroad in cash and the current socio-economic situation is obvious.
At the moment there are no official data on what part of the Armenian
population actually exists on money transfers from abroad. According to
some research carried out by economists, about 40% of the country's
population rely on transfers, while a large part of these people
are relatively wealthy people, who are not part of the 30% of the
population in Armenia who are poor.
Private transfers, which started to arrive in Armenia in 1990, play
an important role in the social life of the population, given the
large share of unemployment, as well as inefficient or low-paid jobs.
According to Doctor of Economic Science and head of the research
center "Alternative", Tatul Manaseryan, bank transfers are one of
the most serious problems of the Armenian economy. It is a phenomenon
that allows consumer demand to be kept at a high level: "We have no
right to put all our hopes on the resources of the Diaspora. The
psychology of the Diaspora is changing as well. In the new world,
everybody thinks and cares first about himself and this phenomenon
has a tendency to limits on the global scale. "
Great responsibility in this issue lies with the government of
Armenia, which in order to reduce inflation is conducting a policy of
revaluation of the dram, leading to a reduction of the trade surplus
and stimulating imports at the cost of exports. "It is good when the
Diaspora helps Armenia, but it should not become the only way of
people's existence. This help has already become a punishment for
the country. The country is addicted to private transfers, which,
due to an incompetent policy, contribute to the appreciation of the
dram and, as a consequence, to a reduction of exports. The share of
private transfers in the GDP is about 9%, and this figure is probably
the only one in which Armenia is the leader among other states. In
regard to this index, only Lebanon and Bosnia, the economic situation
in which, as we know, is very sad, are ahead of us," the ex-prime
minister of Armenia, Hrant Bagratyan said.
Furthermore, according to some studies, the growth of private transfers
will eventually lead to an outflow of capital from the country.
The problem is that due to government inaction, the potential of
transfers has not been fully exploited. Such a large influx of money
from abroad could solve many problems in the country, but on the
contrary it is harming it. However, there is yet another problem. The
lion's share of private transfers to Armenia from abroad originates
from Russia. That means that transfers are increasing the dependence
of Armenia on a single country, which cannot be regarded as a positive
phenomenon.
Vestnik Kavkaza
Oct 18 2012
Russia
Susanna Petrosian in Yerevan. Exclusively for VK
The volume of non-bank transfers to individuals in Armenia in the
first eight months of this year exceeded one billion dollars.
According to the Central Bank of Armenia, when compared to the first 8
months of last year, the volume of transfers has increased by 10%. All
transfers in 2011 totaled 1.28 billion dollars. Russia is the leading
donor country (83%) and accounts for over 870 million dollars. The
second-largest donor country is the United States with 5.3%. Ukraine
(1.3%) is the third largest donor.
However, the influx of money into the country is not limited to bank
transfers. Armenian guest workers, mostly working in Russia, often
visit their families in Armenia and, of course, bring them the money
they earn. Therefore bank transfers can be considered the level of the
inflow of money to Armenia. The increase in the inflow of money affects
prices in Armenia. A direct link between money coming into Armenia from
abroad in cash and the current socio-economic situation is obvious.
At the moment there are no official data on what part of the Armenian
population actually exists on money transfers from abroad. According to
some research carried out by economists, about 40% of the country's
population rely on transfers, while a large part of these people
are relatively wealthy people, who are not part of the 30% of the
population in Armenia who are poor.
Private transfers, which started to arrive in Armenia in 1990, play
an important role in the social life of the population, given the
large share of unemployment, as well as inefficient or low-paid jobs.
According to Doctor of Economic Science and head of the research
center "Alternative", Tatul Manaseryan, bank transfers are one of
the most serious problems of the Armenian economy. It is a phenomenon
that allows consumer demand to be kept at a high level: "We have no
right to put all our hopes on the resources of the Diaspora. The
psychology of the Diaspora is changing as well. In the new world,
everybody thinks and cares first about himself and this phenomenon
has a tendency to limits on the global scale. "
Great responsibility in this issue lies with the government of
Armenia, which in order to reduce inflation is conducting a policy of
revaluation of the dram, leading to a reduction of the trade surplus
and stimulating imports at the cost of exports. "It is good when the
Diaspora helps Armenia, but it should not become the only way of
people's existence. This help has already become a punishment for
the country. The country is addicted to private transfers, which,
due to an incompetent policy, contribute to the appreciation of the
dram and, as a consequence, to a reduction of exports. The share of
private transfers in the GDP is about 9%, and this figure is probably
the only one in which Armenia is the leader among other states. In
regard to this index, only Lebanon and Bosnia, the economic situation
in which, as we know, is very sad, are ahead of us," the ex-prime
minister of Armenia, Hrant Bagratyan said.
Furthermore, according to some studies, the growth of private transfers
will eventually lead to an outflow of capital from the country.
The problem is that due to government inaction, the potential of
transfers has not been fully exploited. Such a large influx of money
from abroad could solve many problems in the country, but on the
contrary it is harming it. However, there is yet another problem. The
lion's share of private transfers to Armenia from abroad originates
from Russia. That means that transfers are increasing the dependence
of Armenia on a single country, which cannot be regarded as a positive
phenomenon.