Tag Archives: poverty in Armenia

Notes on emigration from Armenia

190436_4073Emigration is the single-most detrimental threat to the Armenian nation today, even more so than governmental corruption. The National Statistics Service insists that the population of Armenia is still 3.2 million, a figure it has maintained since 2001. Meanwhile, behinds closed doors rumors are heard that there are barely 2 million people actually living in the country today. A new census is slated to be taken this year.

Emigration is increasing for the following reasons.

Lack of jobs and persistent mass poverty. The government needs to attract more investment in the IT sector. The overtures to give tax breaks to companies are still not aggressive enough. The IT sector needs to increase four-fold. Technology centers need to be established across the country, from Kapan to Alaverdi, and new talent must be continually cultivated. In the meantime, as part of a mass rural development plan entire villages are being uprooted and transplanted to remote regions of Russia, where people are offered free housing and employment.

According to the National Statistics Service, the total number of poor increased from 27.6 percent in 2008 to 35.8 percent in 2010, despite the tens of millions being pumped into the country in foreign aid packages, investments, loans and remittances. During the same period there was about a 10 percent increase in poverty in rural Armenia. The 2010 poverty line was set at a monthly income of 33,517 dram, or about $90, per adult.

Problems related to sustaining small business. Rents are going up, and smaller businesses find it hard to compete, especially with the chain supermarkets that are branching out across the city. Higher rent and prices for imported goods means less profit when customer loyalty dwindles. The lower middle class — the core of Armenian society — has less and less to spend.

Bad attitudes and pervasive apathy. I still hear lame statements like “The country’s not a country” and “Is Armenia even a country for you to come here?” A defeatist dissatisfaction with everything and blind indifference to the state of affairs are suppressing the vital strengthening of society. The only segment of the population that has the genuine right to express a feeling of hopelessness is the poor/very poor of society. Many of these people have no choice but to leave for Russia or elsewhere to find work.

Leaving is fashionable. The youth dream of leaving the country and moving to more exotic places like the US, Canada and Europe. Even if someone has a hard time making a go of things where they end up, emotionally, financially or whatever, the stigma that it is “shameful” to go back inhibits their desire to return. So you have one group that is ecstatic about living elsewhere in the world — anywhere but Armenia — and another that regrets leaving in the first place but won’t return to the homeland.

The majority of Armenian citizens have a lot to be thankful for. Although they may be blind to it, they presently have a relatively stable government and economy. The government insists that the economy will grow by 4.2% this year and that it will meet its target in collecting about $2.3 billion in tax revenues. Armenia is considered by the Heritage Foundation to have a “moderately free” economy — ranked 39th in the world ahead of Norway, France, Turkey and Azerbaijan — and is now implementing a revised, amicable registration process for doing business. It benefits from the support of the European community, the Americas, China, Japan and of course its big brother, Russia. Petty crime is not common in many parts of the capital and arguably less so in the regions. There is little to fear by walking the streets of the city center late at night, and that’s something that certainly can’t be said of very many cities in the world. And despite the beating of war drums by its oil-happy neighbor to the east, there isn’t a clear sign of a possible resumption in hostilities. No one in the international community, Armenia or Artsakh seems to take the rhetoric seriously. Moreover, Armenians have had the privilege of living in a democracy for twenty years, enjoying the freedoms of casting a ballot, thought, expression, and enterprise, all of which are taken for granted.

Emigration has long ago become a national security risk for Armenia, fueled by boundless cynicism and apathy towards nation building. If it continues unchecked, the emigration problem will instigate a severe, harrowing depopulation of the only parcel of land the Armenian nation can legally call its own. And ultimately, that will mean others will move in to take their place. The exodus from Armenia needs to be curbed and that would entail more than just evasive action taken by the Armenian government. It will need the support and encouragement of the Armenian diaspora to ensure Armenia becomes a country where anyone returning there would never dream of leaving again. That has to start happening now.

Photo credit: David Knudsen

Is Armenia’s Economic Crisis Really Over?

I just read an interesting report on RFE/RL about what is being pawned off as the end of an “economic crisis” in Armenia. I guess that depends on who you ask and where in Armenia you live.

Below are excerpts from the article:

Armenia’s worst recession since the early 1990s has come to an end, a senior government official claimed on Monday, citing official statistics that show the Armenian economy growing last month for the first time in over a year.

According to preliminary data released by the National Statistical Service (NSS), Gross Domestic Product (GDP) increased by 2.4 percent year on year in January after shrinking by 14.4 percent in 2009.

The reported growth was twice faster than the one forecast by the Armenian government for 2010. A senior official from the International Monetary Fund (IMF) said last week that the full-year growth rate may well reach 2 percent.

The NSS data show that a 6.5 percent rise in industrial output was the main driving force behind the unfolding recovery. That seems to have primarily resulted from rallying international prices of copper and other non-ferrous metals, Armenia’s main export item. Armenian exports jumped by 57.5 percent to almost $54 million in January.

Armenia’s macroeconomic performance was also positively affected by a 3 percent growth in agriculture reported by the NSS. By contrast, the construction sector, which has born the brunt of the recession, contracted by about 11 percent during the same period.

Trade and Economic Development Minister Nerses Yeritsian portrayed the latest macroeconomic data as a clear indication that the economic crisis in the country is over. “And I want to assure you that we have come of out that crisis well,” he told journalists.

In Yeritsian words, the recovery is facilitated by what he described as substantial capital investments that have been made in public infrastructures in the last two years. “They could not have failed to have an impact on the diversification of the economy and this growth figure,” he said.

Yeritsian also insisted that financial assistance provided by the government to the crisis-hit construction industry has not been a waste of money. “The government measures against the construction decline have been limited,” he said. “The government has never even tried to fully make up for the construction decline.”

Finance Minister Tigran Davtian likewise asserted in late December that Armenia is emerging from the recession with minimal losses. Davtian downplayed the sharp GDP drop which has increased unemployment and poverty in the country.

According to World Bank estimates, the number of Armenians living below the official poverty line rose by 90,000 to make up 28.4 percent of the population in the first half of 2009.

If you ask me, Armenia did not go through a temporary crisis that lasted for about a year and only recently rebounded. Maybe Yerevan perhaps (I don’t believe this) but not the entire country. On the contrary, the economic situation of Armenia has been in crisis mode since it declared independence in 1991.

And it’s really surreal to keep reading that construction was in a decline in 2009 while high-rise apartment buildings are being erected across Arabkir and in central Yerevan. Sure, the construction of certain buildings is slow-going. Some of them have been going up for as long as five years, with construction ceasing for several months then starting again until the developer’s cash runs out. What has that to do with the “crisis?”

Do I need to mention all the new shiny supermarkets, exclusive boutiques and expensive restaurants that have been popping up everywhere in central Yerevan?

Let’s see how Laura Tadevosyan is coping with things in Aragatsotn at the end of the “economic crisis,” as reported by Hetq:

When [w]e visited the abandoned hut, Laura came out to greet us. The elderly woman was covered in soot and her cheeks were swollen from the cold. The clothes she wore were old and tattered. She spoke in a straightforward and lucid manner with us and said that the family had always encountered hardships and that they had now adjusted to their new situation.

The family owned a one room apartment in the town of Kapan, Syunik Marz. They used the money to rent and lived in different places until they wound up here, at the garbage dump.

“My son-in-law is from Masis and he wanted us close by. We sold the apartment and came to Yerevan with the hope of buying a place here to live. He got arrested for a robbery. We moved around for a while and then found ourselves here. We first lived in Ashtarak, but an acquaintance brought us here,” said Mrs.Tadevosyan. “When money falls into your hands, you get flustered and don’t know how to spend it all. It was my daughter and her husband that managed the house money. We spent it all and wound up on the street.”

She and the kids live in a metal “tnak” (hut) that is falling apart and the roof is missing in spots. When we stepped inside, the place was engulfed in smoke. Soot and grime was everywhere. Even the bed sheets were blackened by the soot. They had been burning garbage from the dump, plastic bottles, pieces of wood and shoes, to stay warm.

The hut consists of two small rooms with two metal beds and a few chairs.

“We live in a pretty awful state. I’m ashamed to even show you how we live,” Laura said. For the past two years the family has used candle to light the house.

Mrs. Tadevosyan said they have no relatives in Armenia. They’ve all moved to Russia. Her son also lives in Russia and she says he sends money when he can.

Washing glass bottles is their only source of income. Laura said that there’s a soda plant in Ashtarak. They get the bottles from the plant and wash them for 2 drams a bottle. Workers from the plant then come and collect the bottles.

“I don’t wind up washing many bottles when it’s cold like this. At best, I can wash 1,500 a day. When the kids are home they help me out and I can wash more. The girl is just a child but she’s in water the whole day washing bottles for money. What else can I do?” Laura asks.

Exactly.

Five Lost, Ignored Souls

I just read a disturbing Hetq report about five people living in an underground shelter for eight years in Ashtarak who supposedly went unnoticed by local residents and the authorities.

Here’s some excerpts:

Based on information reported by Aida Papoyan, a resident of the town of Ashtarak, and teachers of the town’s #1 Special Dormitory, staff at the Aragatzotn Regional Authority’s Children’s Rights Division uncovered the fact that Hakob Harutyunyan, along with two women and their two children, were living in an underground hut that belonged to Mr. Harutyunyan. The two women and children are not related to Mr. Harutyunyan.

One of the women who have taken refuge in the underground shelter is named Armineh and the other, Anjela. Staff members of the Regional Authority (RA) visited the site.

What I want to know is–what the hell was going on there? This guy, Harutyunyan, had two houses in the past. He sold his two-story house to buy a smaller home, then sold that to live instead in a “hut” that he dug, on his very own land! Hetq claimed that “He later sold this as well and then started to dig a hole in the corner of his land. He encircled the hole with stones and has been living in it for the past eight years.” What is that all about?  Didn’t the people who bought his house find that odd? How could they have been oblivious to that, and moreover, how could they have accepted the situation for eight years? How did this happen?

Getnaxorsh

It is extremely cold in Ashtarak in the winter–you have to contend not only with the snow but also with the alpine winds blowing from Mt. Aragats. To keep warm in that hell-hole they had to have been burning something in some sort of stove, which means there must have been ventilation there to allow billowing smoke to exit the shelter. In other words, where there’s smoke, there’s fire, and thus there’s no reason to believe that nearby residents were clueless about the families with Harutyunyan as the “head” living there.  How could they have possibly survived for so long?

The Hetq report read that in living literally underground Harutyunyan “bowed under the pressures of daily life,” whatever that’s supposed to mean. Furthermore, after his mother died, who was also living in the hut, he left her there to rot with them for three days before relatives came by to take her body and make funeral arrangements. Then the relatives presumably walked away from Harutyunyan, knowing quite well what state he and the others were in. You can’t dismiss the fact that those people were cold and heartless, and they should be held responsible for being accomplices to ignoring this horrendous situation.

Just from the few points the article made about Harutyunyan, it is obvious at least to me that he’s suffering from some kind of mental illness. Nevertheless, Ashtarak’s social services department should have been on top of the situation and provided him as well as the other children and women living there with both social and psychological treatment.

Armenia is a small country with around 3 million people–probably significantly less although this is not officially discussed. Because society is so compact, civil society and the Armenian governmental authorities must make sure that every single one of its citizens–identification papers to prove as such or not–must be able to live decently in proper living conditions, with dignity and with some sort of monetary stipend if they cannot find employment for whatever reason. It is not realistic at all that some people can fall through the cracks and not be accounted for. There’s no excuse for allowing anyone to live miserably in this country, no matter what circumstances led such unfortunate people to their fate.

In every rural Armenian community, no matter how large or small, everyone knows one another. They know all about each other, what they’ve been up to, and where they are now. That’s the way it is in Armenia, you don’t fall off the face of the earth under people’s noses. In other words, whereas in Soviet times neighbors were brotherly towards one another and took care of each other under the protective canopy of socialism (Armenians and Azeris were living  side by side in harmony for instance in villages throughout the Ararat plains), now you have people living in fear of speaking out against horrors their neighbors face. Maybe they’re scared that they will be oppressed by the authorities for not bringing the matter to their attention sooner, or maybe they simply don’t care. I think in this situation you can’t really say unless you dig deep and persuade people to talk. And in this case, the first person who needs to be doing quite a bit of explaining is Harutyunyan.

What Recession?

Several official figures have been published recently suggesting that Armenia is in a downward economic spiral as a result of the global recession. In the first two months of the year, the economy receded 3.7 percent according to official statistics, and the dram devalued about 20 percent from 305 to 370 against the dollar in a single day. Armenian exports have been cut by 40 percent, not that there are many to begin with—they are mostly copper and ore exports. Some companies IT-related or otherwise have already shut down or have scaled back, but in the case of Lycos Europe, I know from a friend who used to work there that many of its employees, mostly software programmers, have already found work. In some companies, including the one where I work, employees were asked to take a pay cut, around 5 percent or less depending on the firm’s financial situation.

While the slowdown is supposedly continuing, Armenia is receiving a $540 million loan from the IMF, approved in April. And another $500 million is expected from Russia, as announced last month. The World Bank has pledged to provide $50 million in loans which will be redistributed to small and medium-sized banks via the banking sector. Between the World Bank and the IMF, $320 million in loans have been handed down since the beginning of 2009. A metallurgical company based in Syunik has already received a $10 million loan to help keep it afloat. Given these facts and figures things don’t seem that bleak.

During this economic “slowdown” Armenians continue to go about their business in Yerevan. Shops are thriving, the markets and minibuses are packed and the automobiles seem to keep increasing. Some stores and restaurants do close, but the spaces are rented to other businesses, sometimes in a matter of days or a few weeks, as was the case even before the recession. I only know of one person who is looking for work, but it’s just a matter of time before he finds something I think. Meanwhile, the situation in many rural areas, from what I have seem myself and what I have been reading on Hetq Online, isn’t changing much with poverty persisting unabated. Village life has never really improved despite Armenia’s economic boom, so for Armenia’s poor there is no noticeable difference in the quality of life.

Armenia’s GDP of has already contracted 6 percent because of the downturn in the construction sector. In April the National Statistical Service claimed that in the first quarter of 2009, construction had decreased 22 percent, yet when I look out the window or walk down the street in the Gomidas district I see that buildings continue to be erected. The government is distributing $54 million in loans to construction companies. But do they really need the money?

Armenians working abroad, especially in Russia, are losing jobs, but it won’t be long before they find something else to do somewhere, perhaps in another country, maybe even in Armenia.

So what’s going on here? Which segment of Armenia society is feeling crunched by the recession? And will it ever be made obvious? And where will all those hundreds of millions of dollars in loans go exactly? That hasn’t been made clear. I can’t see anything changing in spending habits. Armenian society has been polarized for well over a decade. People who have are spending, and people who are barely surviving on pensions or meager wages are not, but it’s been that way for years. So aside from official published statistics, there doesn’t seem to be any noticeable evidence of a recession in Armenia.