Growth, poverty, and developmental programs in Armenia

Abstract

Prior to the independence from the Soviet Union (21 September 1991), Armenia was a regional hub of manufacturing, industry, and construction. Most importantly, poverty was not among the top priorities of the nation a fortiori it was not as acute as nowadays. The overall pattern significantly worsened after the independence. The newly independent country had to bear the burden of 1988 earthquake, the undeclared war of the neighboring Azerbaijani Republic and the loss of erstwhile economic ties and privileges. Those challenges were coupled with the monetary reforms and the need to transform from state-led to a market-driven economy. Under those circumstances, Armenia became among the poorest countries of the world. To effectively tackle the issue, the government was strategizing developmental programs. Hitherto, three developmental programs were strategized: Poverty Reduction Strategic Paper (2003), Sustainable Development Program (2008) and Armenian Development Strategy (2014). As it is illustrated below in the literature review section it is important for the developmental strategies to be “of people, for people, and by people”. In other words, it is strongly important for such programs to be a product of the national (not solely of government) ownership and involve as many stakeholders as possible during the drafting process. In the framework of this thesis, I am firstly going to investigate whether and to what extent the drafting of the developmental programs was participatory. The second part of the thesis is devoted to the issue of classical economic – the interrelationship of growth, poverty, and inequality in Armenia. I strongly believe that findings of my analysis would be helpful of necessary if the need arises to write a new developmental program and not only. I have also illustrated the figure of other countries with the commensurable economy to understand how well we are doing in comparison with the other countries.