Armenia, the second largest populous breakaway of the former Soviet Union is seriously confronted with lowered salary and job losses of their nationals working abroad after the economic crisis gripped their major employer countries. Economy Minister Nerses Yeritsyan said a large number of expatriates were returning home due to job losses, and the exact figures were still not ascertained yet.
The increasing returnee numbers will cause extra pressure on the country’s exchequer as social rehabilitation expenditure rises. Armenia largely depend on remittances that amount up to $2.5bn, and almost 80 percent of it comes from Russia is down 25 percent.
Though Armenia has a well regulated banking system that virtually has had no exposure to risky foreign currency loans, the diminishing remittances is making it more vulnerable now. According to the National Statistics Service of Armenia, the GDP is down to 6.1 percent in the first quarter of this year from last year’s 7 percent growth. Similarly, the construction sector too has registered a negative growth of 21.9 percent leaving the booming housing sector with many incomplete buildings across Armenia.
Aristomene Varou-dakis, Armenia country manager for the World Bank while reviewing the situation said with low public-debt levels at about 15 percent of GDP, Armenia had enough scope to garner funds through available financial sources. As an immediate response IMF and the World Bank will be providing $540mn and $550mn respectively, and another $500mn is expected from its ally Russia.
Russian companies control or operate much of Armenia’s infrastructure, including railways, gas pipelines, a nuclear power plant and mobile telecoms. Most of its energy is produced with imported fuel, including gas and nuclear fuel from Russia.
According to the Ministry of Diaspora, they are conducting four conferences to leverage the intellect and draw investments through the Armenian Diaspora across the world. The Ministry of Diaspora was established in last October to encourage Armenians abroad to work for the progress and development of their homeland. The ministry has successfully concluded such a conference with the Armenian architects last month.