The demographic situation in Armenia has reached crisis levels. Following the 2009 global economic downturn, migration out of Armenia increased significantly. While in the early years of independence, most citizens of the Republic of Armenia were leaving primarily because of economic hardship, today the motivation for leaving is due to a loss of hope and belief in the future of the country. The absence of the rule of law, the deepening corruption, obstacles to economic parity and lack of competition in the marketplace, the existence of monopolies and oligopolies are some of the reasons cited by those who have left or who are preparing to leave. A younger, better-educated, technologically advanced and highly mobile generation is the new social class of migrants.
The Kololian Foundation of Canada commissioned research that would take an academic and disciplined approach to search for the root causes of the population decline and determine possible solutions for its reversal. Drawing on statistical data, research sources, media reports, focus groups, surveys and case studies, researchers assembled an analysis that highlighted common patterns and proposed a set of policy recommendations for the Armenian government and other stakeholders.
The Executive Summary of the paper, “The Depopulation Crisis in Armenia” is presented below. Links to the full paper, in English and Armenian, are also available below. We invite thoughtful discussion and policy suggestions.
Executive Summary
Emigration from Armenia has reached unprecedented levels. According to a recent Gallup report, 40 percent of adults want to leave the country—the highest rate of would-be emigrants among the 12 former Soviet Union countries covered. This trend poses major threats to Armenia’s well-being. ‘Brain drain’ saps the country of intellectual resources that could be used to produce and export knowledge-based products and foster economic growth. As well, the recent phenomenon of family emigration, together with a low national birthrate and aging population, endangers Armenia’s demographic prospects.
This report analyzes Armenia’s demographic situation, with the aim of identifying reasons behind current trends and possibilities for their reversal. Drawing on statistical data, other research sources, media reports, focus groups and surveys, researchers in Yerevan assembled various analyses to show common patterns. They also undertook case studies of successful strategies for repopulating remote areas and attracting diaspora immigrants. Together, these sources have produced a set of policy recommendations through which the Armenian government and other stakeholders could take action to reverse population decline.
Contributors to this project include six researchers from the Russian-Armenian (Slavonic) University; three researchers from the Research and Business Center of the Faculty of Economics at Yerevan State University; three independent researchers from Armenia; and one researcher from the Hrayr Maroukhian Foundation.
Subjective reasons for emigration
Despite enjoying periods of strong economic growth following the collapse of the USSR in 1991, Armenia lacks good governance and properly functioning markets. Its 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.
Given these factors, it is not surprising that according to 2010 data from the National Statistical Service of Armenia, the leading motivations for Armenians’ decision to emigrate are economic. Finding or improving one’s income, are the most common reasons cited, followed by family reunification and various other factors.
Surveys undertaken for this report shed further light on reasons for emigration.
• One survey of relatively young and well-educated Armenians found that in addition to economic factors, the desire to emigrate is driven by concerns with professional growth and development, and by the desire to live in a society with high standards of rights, democracy and governance.
• A second 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).
Systemic factors driving emigration
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 Armenian’s citizens to invest in a future for themselves and their families inside the country.
Problems in the economy and business environment include:
• Business centralization and monopolies: Business throughout the country is run by a small number of business groups who are also directly involved in state administration, with each group controlling a specific sector and region. This system of monopolies makes small competitors vulnerable (and often non-viable), fosters unemployment, and produces marked inequalities in wealth. Investment and growth cannot thrive in these unfair market conditions.
• Business-related procedures: Many procedures in areas such as tax reporting, regulations, import/export, finance, property protection, and contract enforcement are inefficient and unfair.
• Independence of the judiciary is a major concern. The Judiciary must be totally independent of the government and powerful economic interests. An independent judiciary is required to preserve the civil rights of citizens and to give foreign investors assurance that they will be treated fairly in commercial disputes.
• Lack of effective economic institutions: Existing institutions, such as the State Commission for Protection of Economic Competition, are ineffective at regulating the economy and supporting free competition; small businesses lack influence; and civil society and the media are unable to exercise oversight and participatory governance.
• Educational system: Higher education institutions are not adapted to market demands for trained specialists, and do not provide adequate professional development opportunities for graduates in technical fields.
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.
– Institutions, such as coalitions of lawyers’ and human rights organizations, non-for-profit organization and media, must be created and strengthened to improve the rule of law, secure property rights, advance equal economic opportunities and public services, and foster transparent and participatory decision-making.
– Better economic institutions are required, such as, for example, an institute of economic ombudsman and/or coalition of organization for protection of economic competition and property rights, to provide equal access to markets and free competition, prevent manipulation of markets, stimulate innovation and growth, and protect investors from risks.
– Transparent media and a stronger civil society will help to develop institutions faster and to hold the government accountable for improving incomes, access to health care, education, public services, with economic and social opportunities.
Learning from the Israeli experience
Because part of the solution to Armenia’s demographic problems must consist in attracting and retaining diaspora migrants, lessons can be taken from Israel’s success at this enterprise. Even prior to gaining independence in 1948, Israel began repatriation planning to populate a new country. Large financial inflows from the global Jewish diaspora enabled the development of infrastructure and agricultural projects; and settlers were given housing and citizenship upon arrival. A well-planned strategic approach, sound policies, and good governance led to Israel’s success. Today, Israel’s Ministry of Absorption manages the arrival and absorption of immigrants from around the world, starting with their decision to migrate through the entire subsequent process.
Israel and Armenia share significant features: locations in a conflict zone, small territories with few resources, and a large globally dispersed diaspora. However, unlike Israel, where the diaspora actively cooperates with the government and invests in the economy, the Armenian diaspora currently refrains from investing in Armenia (due to the business environment and issues connected with rule of law).
Armenia should follow Israel’s model in key areas:
• Undertaking business and governance reforms, and attracting diaspora investment, in order to move toward an innovation-driven economy aimed at importing new ideas, technologies, and investments. For this to happen, enshrining the Rule of Law is critical. Without such Rule of Law, the political risk of investing in Armenia will remain high;
• Investing in infrastructure and ensuring that funds donated or invested by the diaspora are properly spent;
• Coordinating Diasporan grant making bodies, (All Armenia Fund; AGBU; etc.) to financial support repatriation programs; and
• Actively encouraging diaspora repatriation through the Ministry of Diaspora.
Success Stories/Repopulation in Kashatagh and Shahumyan
Modest successes at repopulation in two regions of Nagorno-Karabakh provide some insights into repopulating. Since the late 1990’s, the Shahumyan and Kashatagh regions of the Nagorno-Karabagh Republic have seen population growth following their depopulation during the conflict of 1991-94. Though details of organized administrative efforts at repopulation are difficult to secure due to political sensitivities, a variety of methods have been used at different stages. These include the provision of privileges, attractive employment, material support, and support for entrepreneurship.
Most of those who moved to the regions did so to escape difficult social conditions and housing shortages in the Republic of Armenia. Their decision to move was also influenced by information about the region they had received from family and friends already settled there. While considerable numbers of migrants to these regions have subsequently left, it appears that those emigration rates have now stabilized.
Key lessons learned from the past two decades’ experience in Shahumyan and Kashtagh include:
• the need for a repopulation strategy and action plan;
• the need to ensure proper socio-economic conditions to attract target migrant groups before bringing in migrants;
• sound consideration of the merits of promoting natural growth (higher birth rate) and the development of existing communities.
Combined with better administration, housing and property rights, and active outreach to make repopulation attractive to various target groups, these measures could produce more successful repopulation efforts in these regions and elsewhere in Armenia.
Repatriation from the Middle East
Some members of Armenian diasporas caught up in recent conflicts in Middle East countries were surveyed to find out what factors led them to repatriate to Armenia and what factors would lead them to stay. Though the vast majority had visited prior to immigrating, most experienced significant difficulties in relocation (notably a lack of a coordinated welcome and integration program). A real example for Armenia to follow is that of Israel’s emphasis on its Ministry of Absorption.
Recommendations
Based on its analysis of current conditions and potentials in Armenia, the report gives recommendations for action by Armenia’s government. The following are some highlights of these recommendations:
• Employment and the educational system
o Jobs could be created by promoting investment in Armenia’s economy—which in turn requires reforms to make the business environment more friendly to small firms
o The educational system must be reformed to produce skilled workers suited to labour market demands. New programs are needed offering training in trades and technical fields.
• Business environment
o Small and medium businesses must be provided with a better operating environment through reforms in business procedures, tax reporting, customs, and the implementation of previous reform measures.
• Economic and Judicial reform
o The current ineffectiveness of commercial law to address business disputes should be addressed through new mechanisms such as mediators or financial ombudsmen capable of protecting the rights of businesses and investors.
• Rule of law and the legal system
o The legal system needs to be reformed to ensure that all businesses, large or small, are treated equally under the law. All individuals must receive fair treatment under the law, with no impunity for wrongdoing by police or persons of influence.
• Government accountability
o Government institutions must become more transparent and more consultative in decision-making. The pace of current government reforms must be accelerated to produce visible results improving citizens’ lives.
• Diaspora relations
o The Armenian government must be more receptive to seeking cooperation with the diaspora, using the Ministry of Diaspora to conduct active forums with diaspora representatives. The Government must also demonstrate protection of property rights and investment so as to attract diaspora investment.
• Repatriation strategy and immigrant settlement
o The Ministry of Diaspora needs to develop a clear strategy and action plan for repatriation and resettlement, along with appropriate policies and programs to attract immigrants and ensure successful settlement.
Website:
http://www.depop.am/
Full Report_English: http://www.depop.am/wp-content/uploads/2013/11/THE-DEPOPULATION-CRISIS-OF-ARMENIA_THE-KOLOLIAN-FOUNDATION_EN_Oct2013.pdf
Full Report_Armenian:
http://www.depop.am/wp-content/uploads/2013/10/THE-DEPOPULATION-CRISIS-OF-ARMENIA_THE-KOLOLIAN-FOUNDATION_ARM_Oct2013.pdf
