External transfers down, Armenia vis-a-vis crisis

/By AzerNews/

By Laman Sadigova

External private transfers -- the most important and in some cases the only source of income for most families in Armenia -- have dropped significantly, posing a threat to the families.

Over the first nine months of 2015, transfers into the country decreased 32.2 percent, in the annual calculation, to nearly $426 million. Further, the total income of the public through transfers declined by one-third, and this terrifying financial decline throughout the country promises new economic disasters for this nation with a population of 2.7 million people.

Businesses are closing, feeding the increasing outflow of people from the country. In many cases, migration seems the only way to survive the harsh Armenian realities.

The shocks that the ruble is suffering comes from the promised fatal end of the Armenian dream. The volume of direct investment from Russia amounted to $88 million last year, but could hardly overcome a bar of $7 million this year. Earlier, many Armenian families lost their sources of income after Russia declined to accept many laborers arriving from Armenia.

But even with such a large decline, Russia's share in the total volume of transfers still remains impressive – at more than 76 percent. However, chances that the situation will stabilize, at least at this level, are full of skepticism. Double strengthening the dollar in Armenia also negatively affects transfers. Those migrants who transferred their money in Russian rubles are not the lucky ones – as the ruble fell sharply in Armenia.

Further, the influx of money has also decreased in other countries.

Reducing the solvency of the population due to reduced inflows of transfers has already led to negative consequences for the weak Armenian economy. For example, the volume of retail trade decreased by almost 40 billion drums ($75 million), or 4 percent, from January to September.

One-third of the Armenian population lives below the poverty line and does not have the ability to pay increased taxes. Unemployment, monopoly, corruption, and migration are joined by problems such as the increasing prices of basic utilities from year to year, in particular, gas and electricity prices, which makes the already difficult situation hopeless.

Everything happening in Armenia indicates that the economic crisis is worsening and has many other sides.

Moreover, the current state of things in Armenia has appropriate reasons. In recent decades, the government intentionally destroyed private initiatives and economic competition within the middle class, creating a plundering monopoly system that now serves the government’s interests. It is obvious that the state of Armenia's economy and its vulnerability are primarily the result of the reign of the current criminal regime in the country.