Thursday, June 25, 2009

Financial crisis in Armenia | EV research center’s assessment

The global financial crisis has affected 70% of Armenians, states the Economy and Values Research Center, which recently conducted a study of the impact of the financial crisis in Armenia. The study included a survey of 1000 households in all the regions of Armenia and a survey of 60 large- and medium-sized businesses.

The financial crisis has had an impact across Armenia. The report indicates an 11-25% decrease in income throughout the country. The largest decrease in income is observed in Yerevan, where 40% of the respondents report that their income has dropped by 26-50%.

The crisis has also impacted consumer preferences. Thus, 80% of households will start purchasing cheaper goods. Additionally, 30% of households plan to cut or postpone their spending on communications, durable goods and vacation.

The impact of the crisis on the business sector is significant. According to the study 90% of the businesses surveyed reported that they have been affected by the crisis, and only 5% think that it will not influence them. Moreover, businesses are pessimistic in their predictions, with 80% of the surveyed businesses thinking that the situation will deteriorate further in 2009.

Strategies to overcome the crisis likely mirror those of businesses in other countries. The majority of the businesses surveyed plan to cut administrative expenses and postpone investments. Forty percent, particularly small- and medium-sized businesses, plan to downsize.

The results of the study are available here (in Armenian only).

Tuesday, June 09, 2009

Environmental Change and State Security | Setting Priorities Right

On June 5, the Center for Social Sciences (CSS) at Tbilisi State University hosted yet another insightful lecture, this time delivered by Professor Stephen Jones from Mount Holyoke College.
As the title of the lecture “Environmental Change and Acute Conflict in Georgia” indicates, the discussion evolved around the relationship between the environment and state security. Professor Jones argued that environmental changes, if not addressed timely and properly may trigger ethnic tension. He emphasized that the risk is especially higher in Georgia, where 40-50% of the population lives on the margin, and even a small environmental change in the absence of appropriate infrastructure can lead to major losses in the country.

While the Georgian government recognizes the environmental aspect of human security by signing on to international conventions and treaties on environmental protection, it chooses a rather “hands off” approach when it comes to the implementation. Military spending remains the main priority for the government pushing other issues vital for the state security off the list. Among the issues that are of great importance to Georgian state security but are rather neglected by the government Professor Jones highlighted:

• Demographic decline and the loss of educated young workers;
• Underfunded healthcare;
• Economic hardship;
• Unsolved issues connected with ethnic minorities; 
• Democratic deficit – strong president, weak legislative power and opposition.
As an illustration of his argument Professor Jones brought two examples where environmental changes in Georgia have led to lethal results. In 1998 and the following years, thousands of eco-migrants from Adjara and Svaneti were resettled in Tsalka, a multiethnic district in Kvemo Kartli region. The process of resettlement was rather chaotic and it resulted in ethnical clashes between the Greek and Armenian communities of Tsalka and the new settlers.

Another ethnic conflict sprang after the land privatization in Gardabani and Marneuli, two districts mostly populated with ethnic Azerbaijanis. Ethic Azerbaijanis claimed that the land distribution was done in a non-transparent manner and land was leased to private firms form the capital. Moreover, when the land was leased to the local population, the preference was given to the ethnic Georgians.

Stephen Jones is the foreign Academic Supervisor of CSS International Master’s program Transformation in the South Caucasus, which is currently recruiting students from Armenia, Azerbaijan and Georgia for 2009-10 academic year. Visit CSS web-site for more information on the admissions procedure or the upcoming events.