Poverty in Armenia Remains High

Poverty stricken families trying to survive. Photo courtesy of Photolure.

According to the report published by the National Statistical Service, “Social Snapshot and Poverty in Armenia” poverty in Armenia has not yet returned to pre-crisis levels. The report is based on the results of a 2013 Integrated Living Conditions Survey of Households.

The report looks at living conditions and social situation in Armenia in 2013. It provides an account of the current social and economic developments in the country, describes poverty trends nationally and by different socioeconomic, demographic and geographical classifications.

As of year-end 2013, 32 percent of Armenia’s population was considered poor. Comparatively, in 2008, prior to the global financial downturn, poverty in Armenia stood at 27.6 percent. The report, released on November 12, underscores that compared to 2012, poverty decreased only by 0.4 percent in 2013.

At the height of the crisis in 2009, Armenia’s economy contracted by 14.1 percent, one of the worst percentages globally. That same year, Armenia’s poverty rate grew to 35.8 percent of the population. While Armenia was able to register economic growth in the years 2010-2013, the rates of poverty increased by 4.4 percent.

The report states that 13.3 percent of Armenians are considered ‘very poor’ while in 2008 that figure was 12.6 percent; and 2.7 percent of the population was deemed to be in extreme poverty in 2013, while that figure was 1.6 percent in 2008.

Financial reporter Haik Gevorgyan finds this trend disturbing. “According to the report, the population’s income is comprised of salaries, benefits and pensions, remittances from relatives living abroad, etc. Expenditures from the state budget for 2010-2013 registered strong increases, salaries have grown, so too have remittances, however poverty has decreased only minimally.Following the crisis, the wealthier segment of society has gotten wealthier and the poor segment has only received a very minimal portion of that increase,” Gevorgyan says and adds that this trend is conditioned by the monopolization of the economy.

“The country’s structure of governance, which has deep roots in Armenia, could not have produced a different result. The economy is becoming more ‘oligarchic,’ business is becoming more concentrated in the hands of a few, and the income from those businesses is also being concentrated,” says Gevorgyan and underscores that if the principles of democracy, liberal market policies, rule of law and equality before the law were applied, then even the poor segment of Armenian society could have hoped to improve their situation.

The report states that the key factor behind the increase in the poverty rate for 2008-2013 was the deep recession Armenia’s economy suffered in 2009. The economy in 2010 had a modest growth at 2.2 percent as compared with the previous year, followed by further growth at 4.7 percent in 2011, 7.2 percent in 2012, and 3.5 percent in 2013. The 2013 results show that the average monthly real consumption of the entire population increased by 4.4% as compared to 2008, however Gevorgyan argues that only the wealthy benefited from that increase and nutrition consumption of the poor and extremely poor decreased.

Over 2008-2013, poverty rates in urban communities increased at a slightly higher pace than in rural communities (4.6 percentage points against 4.2 percentage points). Yerevan had the lowest poverty rate in the country (25.5 percent), which was 1.5 times lower if compared with other urban communities. In 2013, poverty in Yerevan as compared to 2008 increased by 5.4 percentage points, whereas in other urban communities such increase totaled 3.5 percentage points. In terms of urban/rural distinction of welfare, majority of the poor (63.8 percent) were urban residents.