Armenia, a landlocked country in Eastern Europe, experienced a decrease in poverty after the collapse of the Soviet Union. However, the recession in 2008 had a significant impact on Armenia and the economy is still struggling to recover. Many families in Armenia struggle to obtain employment and afford necessities. In 2021, 26.5% of people in Armenia lived below the national poverty level. The primary reasons for being poor in Armenia are a high unemployment rate, economic transition and political instability within the country. 

Economic Transition

Armenia experienced a difficult transition from a centrally planned economy to a market-based economy after gaining independence from the Soviet Union in 1991. This transition led to a significant decline in industrial production, high inflation and loss of jobs. Armenia continues to face economic challenges, including high levels of poverty and inequality, limited access to finance and a lack of economic diversification.

Additionally, a key driver of Armenia’s economic transition is the development of the technology sector, particularly in the field of information technology. A range of startups such as iCity LLC are focused on technology services and software development to provide businesses with better services and equipment. Another startup, Abigon LLC, specializes in developing infrastructures for telecommunication networks and the design and construction of database centers, which have facilitated the transport of goods and services, enabling people in Armenia to access work, school and recreational activities.   

Unemployment

High unemployment has been a major driver of poverty in Armenia, especially for Armenia’s large families. The reported unemployment rate in Armenia is 12.7% as of January 2023, and many people face challenges in finding work. In addition, the COVID-19 pandemic had a major impact on the Armenian economy, leading to job losses and reduced economic activity.

In response to this issue, the government has implemented a formal program for vocational education, mostly in schools, which aims to prepare students with relevant qualifications to improve their skills to gain employment. So far, vocational education has assisted in the upskilling of qualifications and competencies in a range of industries, including agriculture, tourism and technology.

Political Instability

Armenia has struggled with government corruption which has eroded public trust in political institutions and contributed to social and economic inequality. The lack of democratic elections due to the authorities’ failure to ensure justice and transparency has resulted in a lack of public confidence in the electoral process and slowed Armenia’s progress toward becoming a functioning democracy.

Looking Ahead

Armenia has made noticeable progress in implementing anti-corruption activities such as those being carried out by Armenia’s General Prosecutor’s Office. Governmental support for programs designed to encourage young people to develop and adapt to changing working conditions could deliver positive results. For example, from 2003 to 2007, local and international NGOs, such as the All Armenian Youth Fund, implemented youth programs to increase cultural and professional orientation. Finally, as a British charity operating internationally, CARE works to reduce global poverty and support the development of civil society. Since 1988, CARE has been working primarily on assisting Armenian rural households with incomes below the poverty line. 

– Lilit Natalia Manoukian
Photo: Flickr