Azernews.Az

By Jamila Babayeva

Socio-economic situation in Armenia has declined over the past few years and the country has faced serious problems, such as increasing external debt, unemployment, migration and poverty.

Reports released by the Natonal Statistics Service, as well as international organisations, well mirror the miserable reality.

One third of the country's population currently lives in poverty and the forecasts are still pessimistic, since for the next 12 years the half of poor people in Armenia are expected to remain in poverty.

Based on the country's Strategic program for perspective development 2012-2025, the Armenian government predicts that the poverty rate in the country will drop to 13.6 percent by 2025 from 32.4 percent in 2012.

UN Resident Coordinator and UNDP Resident Representative, Bradley Busetto, believes that unemployment and poverty are Armenia's current challenges.

According to the World Bank's last report, the unemployment rate in Armenia is "far above the regional average" and 18 percent of the workforce is unemployed at present.

Unemployment and poverty are the major drive for increasing migration in the country. Many Armenian citizens leave the country in order to find a better life abroad. Only in the past three years, 250,000 people have left Armenia, Russian media outlets reported.

"Migration is now one of the most important and widely discussed issues in the country's political and social circles. Armenia may be left without Armenians before 2040," the report said.

Poor investment environment and lack of natural resources makes the country less attractive for foreign investments, leaving no chance for miserable economy to survive and create new jobs for local people. According to the National Statistics Service, the inflow of foreign investments to Armenia's economy dropped by almost 40 percent in the first three quarters of 2013, compared to the same period of time previous year.

Unsettled Nagorno-Karabakh conflict hampers development

The situation is far complicated due to the Armenian authorities' unconstructive position on the long-standing Nagorno-Karabakh conflict. Current social-economic situation cannot restore without the resolution of Nagorno-Karabakh conflict, which Armenia broke out with the neighboring Azerbaijan in 1988. Armenia's aggressive policy left the country out of all major regional economic projects, including the Baku-Tbilisi-Ceyhan oil pipeline and the Baku-Tbilisi-Kars railway.

As a response to Yerevan's aggressive policy, Turkey also closed its borders with Armenia, demanding it to withdraw its troops from occupied lands of Azerbaijan. The blockade of the country continues to slowdown economic growth in Armenia.

Armenian armed forces have occupied 20 percent of Azerbaijan since 1992, including the Nagorno-Karabakh region and seven surrounding districts.

Armenia constantly violates a ceasefire agreement signed with Azerbaijan in 1994 and refuses to implement the U.N. Security Council's four resolutions on the liberation of the Nagorno-Karabakh and the surrounding regions.

Many Armenian experts believe settlement of the Nagorno-Karabakh conflict is crucial for the country's economic development. They think that Armenia needs to develop a serious economic development project to resolve its problems.

In this case radical reforms could be the best remedy to improve poor socio-economic situation. However, the first step in this way should be the constructive position on the resolution of Nagorno-Karabakh conflict. Armenia should abandon its aggressive policy against the neighboring countries to benefit the multi-million regional economic projects. Otherwise, social collapse in Armenia is inevitable.