Armenia is a small, lower middle-income country located in the highlands surrounding the mountains of Ararat. Armenia has only recently gained freedom, as late as 1991, and maintains positive relations with the rest of the world as the economy relies largely on investments and aid from Armenians abroad. The country saw significant poverty reduction in the 2000s, with an economic growth of 12 percent per annum and precisely aimed redistribution programs.

Poverty In Armenia

The economic crisis in 2008 reversed all the improvement that Armenia had experienced. In a matter of just two years, between 2008 and 2010, about a third of the poverty reduction achieved in the preceding decade went down the drain. The government enforced fiscal policies to help and protect the poor but the recovery rate was slow with a GDP per capita growth of 2.3% in 2010 and of 2.9% in 2014. The GNI per capita was measured to be USD 3880, in 2015.

Causes Of Poverty In Armenia

The deep economic recession the world experienced in 2008 hit the country of Armenia and its already staggered growth reduced significantly, thus creating even more difficulties for the economy to overcome. Some key causes of poverty after this incident can be summed up as:

1. Migration Of Workforce

Due lack of jobs, the majority of men left the country to earn a livelihood in Russia. One-fourth of the jobs in Armenia are low paying jobs.

 

2. Unemployment

Unemployment and poverty in Armenia are closely linked. The number of unemployed people in Armenia is close to 30 percent according to previous reports, and the labor force is low. Many of those employed are reported to lie below the poverty line as well.

3. Weak Agricultural System

The agricultural sector in Armenia does not provide enough jobs and affordable food. Many of the farmers lack access to modern farming technologies and knowledge. Also, there is no adequate infrastructure in spite of the government help.

Relation With The World Bank

Armenia’s initial involvement with the World Bank started in January 1992, when it applied for membership in the World Bank group. Armenia’s first major lending projects were received by the World Bank in 1993 and 1994. Armenia received a $12 million loan from the World Bank for an institution-building project with the objectives of facilitating conversion to the market economy. The World Bank developed many projects to help the growth of the country and reduce poverty thereon. One such project is ‘Strengthening Armenia’s Integrated Living Conditions Survey’, which started in September 2017 and is built on the foundation of a  long standing relationship between the Bank and Armenia.

Objectives Of Strengthening Armenia’s Integrated Living Conditions Survey (ILCS)

The development objective of this program is to strengthen welfare monitoring in Armenia through improvements in the quality of household and individual level data collected by the National Statistical Service (NSSRA).

Although the data collected through ILCS 2017 will come too late to have any substantial influence on the Systematic Country Diagnostic 2017, the data collected in the 2017 rounds and subsequent rounds will help monitor progress on the twin goals i.e. poverty and shared prosperity in the new Country Partnership Framework.

World Bank’s Success In Armenia Till Date

Armenia’s regional and national contexts show that the country is at an inflection point. Since 2000, the growth and poverty reduction rates in the country have slowed significantly. The reasons might be the weaker performance of the country’s main trading partners, improper infrastructure, low labor force, and a slowdown in received help and support from other countries. However, the recovery of global commodity prices in the world market, well after the deep recession in 2008, and rising private consumption provide a good opportunity for Armenia’s renewed growth.

“World Bank is one of Armenia’s key partners”, said PM Karen Karapetyan in one of the welcoming ceremonies at a conference. World Bank has financed Armenia in all spheres of the economy and aimed at the socio-economic development and helped to ensure economic growth, development, and well-being. Find more on how Angola manages the recession with its Angola Fiscal Management Development policy Financing. {NOTE TO DEVELOPER: Kindly link “Angola Fiscal Management Development policy Financing “#1: Angola Fiscal Management Development policy Financing”}

The Change

While one-quarter of Armenia’s population still lives in dire states of poverty today, these numbers can be reduced. To have a safe and independent future, the country needs to have a developed, competitive, and innovative economy. All I can say is that the government needs to create more attractive jobs and educate the population in such a way that the labor force is more motivated and competent. Finally, the government has to also work on the country’s infrastructure and agricultural sector to become self-reliant.