Market Not Supported By Strong Institutions

YEREVAN (Armenpress)–A study entitled–"Armenia: obstacles for growth and government policy" conducted by the World Bank office of Armenia’s director Owaise Saadat–revealed that about 60 percent of the Gross National Product is produced not by the government agencies–founded during the Soviet era–but by Armenia’s private sector.

In 2001–29.8 percent of the GNP was agricultural products–26.1 percent was industrial products–9.1 percent was related to construction–and 35 percent accounted for services rendered in Armenia.

According to the study–in 1996-99 Armenia’s poverty rate reached 55 percent. One-third of Armenia’s labor force is unemployed–and 20 percent of the populations emigrated from the country.

Despite the present achievemen’s–the economic growth was not coupled by structural reforms in the enterprises or mass private business activities.

Mass privatization has not resulted in the improvement of enterprises in the CIS countries yet. Despite the noticeable progress in the structural reforms–the main institutions supporting the market environment in Armenia are as strong as they were hoped to be by now.

Saadat said that 1,000 employees–in the diamond processing industry–produced 30 percent of the exported industrial product in 1999–and made $70 million.

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