Brief Insight of Armenian Economy

[alpha]

Interesting insight into Armenian Economy from www.cis7.org Interesting to know that 11% of GDP is made up money transfers. Does that say something about the economy. I do not have a deep knowledge of economies of post Soviet counties, but it is evident to a blind eye that 11% is too high. Does anyone know what’s the number in other counties in the region.

 

Like other countries of the former Soviet Union, Armenia suffered a dramatic decline in output after independence. Real GDP fell by 50 percent between 1991 and 1993, but growth resumed in 1994 and has remained positive since then, averaging almost 6 percent in the past 7 years (1994-01). Despite robust growth, the GDP did not recover completely and stood in 2001 at approximately 80% of the pre-transition level.

 

In 1994-95 the government committed itself to a macroeconomic stabilization program, which resulted in a successful reduction of inflation from 4 digits to 2 digits by 1996. Inflation has remained comparatively low since then. Prudent macroeconomic policies helped to stabilize the local currency, the Armenian Dram. The economy proved to be quite robust during two recent major shocks: the Russian crisis of 1998 that had a significant impact on other CIS countries and the political crisis of 1999 when the parliament speaker and the prime minister were assassinated in parliament.

 

Armenians benefit from significant private and official transfers that averaged about 11% of GDP (1995-2000), about half of them being private remittances from abroad.

 

Being a small economy, prospects for Armenia economic growth depend greatly on its ability to develop export-oriented industries. Recognizing that, Armenian government has been promoting a very liberal trade regime. However, Armenian trade relations continue to be adversely affected by the strained relations and closed borders with neighboring Azerbaijan and Turkey.

[Sasun]

Alpha, I think the private remittances share is significantly more than 11%/2. I would say at least 20% of the official GDP. Most private remittances are not registered.

[edward demian]

I tried to do business with Armenia. Tried to have some metal castings produced and deliverred to the US. The factory that I finally contacted did not have a working Fax number or machine, and did not bother to follow up on my written correspondence. Some woman answerred the phone and she was so untrained, I could not even communiucate with her in Armenian. That was enough for me. <_<

[Sasun]

Edward, have you tried this company ? They are a Canadian joint venture in Armenia, you may have a better luck with them.

[gamavor]

http://www.ossada.am/faq_on_foreign_investments.htm

 

Lots of info on Foreign Investments in Armenia

[edward demian]

I just did. Thanks. E-mailed them and I am wayting for a response.

[edward demian]

I finally received a reply assigning me a person to speak to which will return next week.

[Sasun]

Hope it will work out well