Reasons and Solutions

Armenia’s spending on health, education, and public investment is among the lowest in the world (as a percentage of GDP). The presence of monopolies or oligopolies as powerful players in imported goods limits growth and production opportunities, leading to higher prices and reduced opportunity for small business. Roughly a third of Armenia’s population lives below the poverty line.

A nation-wide survey found that a third of respondents are considering emigration within the next two years. Many of the currently-employed respondents look to emigrate in search of higher income in jobs that make better use of their professional qualifications. The desire to emigrate is predominantly connected with long-term goals which motivate emigration or permanent residence in other countries (most often Russia, EU countries or the United States).

Individual choices and perceptions driving emigration are rooted in larger systematic features of Armenia’s economic, political and social situation. Examination of those conditions can shed light on the background informing individual choices, and highlight reforms that might lead Armenia’s citizens to invest in a future for themselves and their families inside the country.

Problems in the economy and business environment include:

Problems with the rule of law mostly concern the application of existing law in the judicial and law enforcement systems. The investigative and pre-trial phases of criminal procedures are susceptible to corruption and police abuse, with lawyers having little power to intervene.

Armenia’s governance system is seen to be weak by International observers. Popular participation is limited to elections, and decision making is non-participatory and opaque. Independent organized civil groups are still underdeveloped and ineffective. Parliamentary opposition continues to be fragmented, lacking in structure and organization.

Top-down efforts by the Armenian government to improve national shortcomings can be effective over the long term only through the development of institutions at all levels.

The report analyzes challenges and offers recommendations in the following areas:


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