Remittances "enslave" Armenia's economy

/By AzerNews/

By Mushvig Mehdiyev

The latest World Bank data once again highlighted the fact that the remittances sent from overseas are the "beating heart" of Armenia's ill economy.

Private money transfers from abroad have shared a crucial part in Armenia's gross domestic product indices both in the past and today.

In a very recent WB report, Armenia found itself among the top ten countries which have been classified as most dependent on remittances in the world.

The overall share of migrant money in Armenia's GDP is calculated at 21 percent, or $2 billion of a total $10 billion.

Remittances, particularly from labor migrants in Russia, is a significant factor taken into account while developing Armenia economic strategy and budget.

This fact has been highlighted well in the WB data as the smallest South Caucasus country shares the seventh spot in the top ten remittance-enslaved list with Haiti.

Commenting on the report, local Haykanak Zhamanak newspaper in Yerevan explained that the reason for huge money transfers into Armenia related to unemployment in the country (17 percent, according to statistical data).

"The huge amount of remittances manifests that the working force of Armenia creates value not in the native land but in foreign destinations," Zhamanak said.

Armenia's regional neighbors Georgia and Azerbaijan got better position in the WB report, as share of remittances in the GDP of Georgia stood at 12 percent and amounted to 2.9 percent in Azerbaijan.

Tajikistan, Kyrgyztan, Nepal, Moldova and Togo are within the top five nations benefiting from migrant money, according to WB.

As dependence on remittances grows it directly affects international predictions on Armenia's economy. Considerably high amount of money inflow from Russia acts as a definitive factor in view of Armenia's economic skills.

This was obviously entered among the driving reasons behind the WB's latest economic growth report for Armenia, where it said the economic developments in Russia unavoidably impacts on Armenia's economy.

On December 30, 2014, Armenia's rulers praised their country in an interview with Spain's El Mundo newspaper, when Prime Minister Hovik Abrahamyan along with several cabinet ministers projected a superb image of Armenia, introducing the country as the best in the region and one of the best around the globe.

This move by rulers of the former Soviet land presumably served to prematurely disguise the multi-sided crisis hitting the country. The recent consecutive forecasts on Armenia by the influential financial organizations - Moody's, World Bank and Fitch Ratings - denied of course the premier's words to the Spanish newspaper.