Azerbaijan, Baku, 15 October / Trend /
Ellada Khankishiyeva, Director of Trend Analytic Centre
Consequences of the world financial crisis will be considerable more for economy of Armenia than the country might expect. Armenia will face with the prospect of sharp reduction of private transfers by the Armenian diasporas in case the current tendencies of the world market are maintained.
It is not secret that Armenian economy relies on huge investments by the Armenian Diaspora. Thanks to the Armenian Diasporas in Russia and the United States, where transfers come from basically and the country is well represented, Armenia restored production and its purchasing capacity during the first years of its independence. Thus, the two third of Armenians live abroad and they will more actively invest in Armenia, when their financial state is improved.
In 2007 Armenia got more than $1.3bln (more than 13% of GDP) through private transfers. Fifteen banks have been broken in the United States since the beginning of 2008 because of crisis at the financial market. Thus, the risk group has included foreign investments of the Armenian Diasporas at these banks, as well.
Private transfers are a key element of the Armenian social policy, because hundred thousands of Armenian citizens live not by means of state social programs, but regular money transfers of their relatives and friends living abroad.
According to data of the Central Bank of Armenia, non-commercial funds in the amount of $1.035.3mln were transferred to individual accounts through banking system of Armenia from January to August 2008. This figure is by 33.9% or $261.9mln more than the figure of the same period in 2007. A total of $152.6mln was transferred abroad from Armenia as compared to $173.9mln from January to August in 2007 (down by 12.3%).
The biggest influx belongs to Russia and the United States. Some 90.8% of all incomes of the country came from Russia and the United States as compared to 95.9% of the same period in 2007. Share of these countries reduced by 5.1% in transfers to Armenia as a result of the financial crisis in the US and Russian markets.
The population of Armenian Diaspora all over the world is about 2.5 times more than the original citizens of Armenia. Thus, if about 3mln ethnic Armenians live in Armenia, then more than 7.5mln (as per maximum estimations, up to 10mln people) reside abroad. The largest Armenian community resides in Russia.
According to official data, 600,000 Armenians reside in Russia, while unofficial data urged this figure exceeds 1mln, or sometimes over 2.5mln people. About 600,000 Armenians reside in the United States, up to 300,000 in France and 250,000 in Iran.
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