ARMENIA SINKING INTO POVERTY
By Naira Melkumyan
Institute for War and Peace Reporting IWPR
April 4, 2011
UK
Nearly 50 per cent of government expenditure goes on welfare payments,
which say officials has prevented poverty from reaching catastrophic
levels.
Rising numbers of Armenians are living in poverty, and even substantial
spending by government has failed to turn the situation around. For
many, the only way out is emigration – though that will leave the
country without many of its best and brightest, who could assist
economic recovery in future.
According to the latest available official statistics, a third of
Armenians lived below the poverty line in 2009. Experts say the
percentage will have increased last year, and will do so again in
2011, especially with inflation running at nine per cent last year
and 12 per cent in February.
“We live from hand to mouth. There’s no work, and my older son has
been forced to go and work in a bakery in the capital [Yerevan] to
feed his family and myself,” Ophik Boyajyan, a 60-year-old resident
of the town of Artik in northwestern Armenia. “He sleeps in the bakery
and comes home only once every few months, because there isn’t enough
money for the journey.”
Shirak region where Boyajyan lives was devastated by an earthquake
in 1988, and has the highest poverty level in the country – 40 per
cent in 2009.
Boyajyan said her household, which includes three small children and
four adults, never has a monthly income of more than 100,000 drams –
under 300 US dollars.
“Our main foodstuffs are flour and sugar. We bake our bread at home
because it’s too expensive to buy it. In winter our costs go up –
we have to buy fuel to heat the house. But there’s never enough fuel
and the children are always falling ill,” she said.
Diana Martirosova of the national statistics agency says the proportion
of the population living in poverty increased to 34 per cent in
2009 from 28 per cent the year before. The official poverty line is
calculated at an income of 30,920 drams a month – around 85 dollars,
while “extreme poverty” is defined as an income of under 17,483 drams.
“The poverty level among children is higher at 38 per cent, while
4.5 per cent of them live in extreme poverty,” Martirosova said.
Leili Moshibi-Jilani, head of the United Nations children’s fund
UNICEF in Armenia, said the global financial collapse of 2008 had a
very serious impact on families.
“It’s clear that children suffered the most from the economic and
financial crisis,” she said.
Arguing that the government’s spending plans for 2011 would not improve
the position of poor children, she said that “this situation could
have long-term consequences for children, and for the development of
the whole country”.
In its current economic strategy, the government pledges to cut the
proportion of the population living in poverty to 17.5 per cent,
but officials admit this is not feasible. As Economy Minister Tigran
Davtyan put it, global economic crisis has “slowed the trend towards
a reduction in poverty”.
The economy ministry says 45 per cent of government expenditure goes
on welfare payments, and officials say this has prevented poverty
from reaching catastrophic levels.
Artak Baghdarasyan, head of the ministry’s policy department, says
that without a welfare-oriented budget and measures to combat economic
crisis, the number of people living in poverty would have been nearly
50 per cent rather than 34 per cent.
Opposition politicians dispute the government’s figures, saying they
understate the true extent of poverty.
“Even the [official] statistics show that more than a third of Armenia
is poor. If you bear in mind that the methodology the government uses
to assess poverty is disputed… then the reality is that more than
half the population is living in poverty,” Ara Nranyan, a member of
parliament from the Dashnakutsyun party, said.
Nranyan said the experience of other countries was that welfare
benefits were not a solution in themselves. Job creation was key,
and benefits must target those unable to work.
Nairuhi Jrbashyan of AVAG Solutions, which researches social and
economic issues, says that around 60 per cent of people classed as
poor and 40 per cent of those in extreme poverty do not even apply
for welfare benefits, for reasons including “distrust of the system,
a sense of injustice, or the shame of claiming benefits”.
Spiralling prices create the risk of more and more people falling below
the poverty line. In February, fruit and vegetables cost 45 per cent
more than they did a year earlier, prompting President Serzh Sargsyan
to instruct officials to look at components like retail mark-ups and
transport costs with a view to curbing prices .
One of the main pressure-valves preventing worse problems is
emigration, mostly to Russia.
According to Jrbashyan, “Emigration has risen 150 per cent from two
years ago. More and more people are leaving Armenia in search of work,
most of them from rural areas.”
With emigration come remittances, the money people send home from
places like Russia. The central bank calculates that money transfers
sent to Armenia by labour migrants last year were 37 per cent higher
than in 2009.
“All my friends are now in Russia – they all got up and went,”
Aram Gharibekyan, a 30-year-old in Yerevan, said. “Periodically,
they send money to their parents, who survive on that.”
Gharibekyan has just returned from Russia, and plans to go back if
he cannot find work in Armenia.
Others, too, are voting with their feet – among them the skilled
professionals who could help the country get back on its feet in
future.
For example, Maria Kulidzhanova, a 28-year-old economist, has decided
to leave for Canada.
“At one time we considered ourselves to be on an average income,
but my husband was forced to leave his job after he wasn’t paid for
six months. He managed to find temporary work, but we don’t see a
future for our children here,” she said. “The longer it goes on,
the worse it gets, so we’ve decided to emigrate.”
Naira Melkumyan is a freelance reporter in Armenia.
From: A. Papazian