Income Gap Greater in Armenia Than CIS States

YEREVAN (Noyan Tapan)–Armenia has one of the highest level of income inequality among countries in transition. This income gap is higher in Armenia than in Russia–Tajikistan–Georgia–Kyrgzstan and Moldova. This data was gathered by the World Bank which monitored the transition period in Eastern European countries and countries that were part of the former USSR.

Commenting on the results of the research–WB Armenia representative Owaise Saadat said that the GDP level which dropped sharply with the beginning of the transition period–the tendency to reach a level of stable economic growth is not constant. Armenia registered a 9.6 percent growth in 2001–however–it was not high enough to surpass the level growth registered in 1990. Moreover–the growth was not enough to achieve a equal distribution of incomes received–which may complicate the situation in the future. The following are the individual percentages of various economic agents that contributed the most to Armenia’s GDP in 2001: agriculture – 29.8 percent; industry – 26.1 percent; construction – 9.1 percent; and services – 35 percent.

According to Saadat–industrial capacity must be increased since it is connected with using human resources and creating jobs. "Some people say that WB is the enemy of industry–However–they are mistaken because our policy is aimed at the development of industrial companies," Saadat said.

Saadat also said that it is the governmen’s responsibility to stimulate the growth of new and struggling business–as well as to revamp older business. By helping to stimulate the growth of such business–the government will thus be creating greater opportunities for employment for Armenia’s citizens.

The research shows that expenditures by Armenian companies increased 70 percent because of the blockade of the roads (imposed by Azerbaijan–Turkey and Abkhazia) connecting Armenia with Europe and Central Asia

The World Bank submitted the results from the research to the president and the parliament for their consideration. The WB proposed the creation of new structures for the successful implementation of reforms: an agency for reconstruction of companies and other agencies responsible for stimulating investmen’s and a higher rate of exports. "We are ready to help the government in the same manner we are helping the Armenian Development Agency," said Saadat.


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