New York Armenian Students’ Association
333 Atlantic Avenue
Warwick, RI 02888
(401) 461-6114
newyork_asa@yahoo.com

PRESS RELEASE

May 18, 2005

Contact: New York ASA: newyork_asa@yahoo.com

NY ASA Co-Hosts Lecture Featuring Dr. David A. Grigorian at Columbia’s
School of International and Public Affairs

by Anahid Ugurlayan and Alec Gevorkyan

On May 4, 2005, the New York Armenian Students’ Association, along
with the Columbia University Armenian Club, Armenian Network and
Armenian National Committee of New York, presented a lecture entitled
“Armenia’s Economic Paradigm: Challenges and Prospects for the Future”
by Dr. David A. Grigorian, an economist at the International Monetary
Fund and co-chair of the Armenian International Policy Research Group
(AIPRG), a Washington-based network specializing in Armenia-related
public policy issues. Dr. Grigorian was introduced by Alec Gevorkyan,
chair of the ASA Central Executive Committee. Mr. Gevorkyan also
provided background information on, and explained the work of,
the AIPRG.

Dr. Grigorian commenced with an overview of Armenia’s economic
performance in the early 1990s, following the independence, namely
the collapse of its production and tax base, loss of export and
import links, as well as hyperinflation, compounded by Armenia’s war
with Azerbaijan and the ongoing Azerbaijani and Turkish blockade.
He contrasted this picture with Armenia’s markedly improved
macroeconomic situation in the late 1990s, when it experienced solid
economic growth, single-digit inflation, and declining budgetary
and current account deficits. Dr. Grigorian noted that, in relative
terms, Armenia’s economy is more diversified than other CIS countries,
particularly Azerbaijan whose economy is heavily based on oil exports.

Following the discussion on Armenia’s recent macroeconomic
performance, Dr. Grigorian went on to discuss the key policy
challenges facing Armenia, in particular those pertaining to (1)
sources of growth, (2) sustainability of growth, and (3) distribution
of income. Talking about the first item, the speaker identified two
main sources of current economic growth in Armenia in recent years,
namely foreign-financed public construction projects and exports of
jewelry (in particular, the diamonds) industry. The weak performance
of exports, including those of diamonds, however, that the overall
growth is not export-driven, which calls for effort to enhance
productivity to strengthen competitiveness. Addressing the issue of
sustainability of growth, Dr. Grigorian pointed out the following
concerns: (a) highly concentrated structure of the economy, leading
to large deadweight losses and monopoly profits; (b) existence of
high barriers of entry for potential businesses; (c) weak government
revenue record, and, as a result, low level of spending on public
investment and social projects, and (d) inability of the financial
sector to actively mobilize the savings of the population. Related
to the third policy challenge – income distribution – the speaker
mentioned the issues of persistent steady rural poverty in Armenia
(no improvements since 1996), despite some reduction in poverty in
Yerevan and other urban locations; weak trickle-down effect (i.e.,
low elasticity of Armenia’s poverty to macroeconomic growth); and,
again in this context, the inability/unwillingness of the government
to raise sufficient amount of revenues to finance social programs. It
was mentioned that Armenia, whose tax to GDP ratio was approximately 14
percent in 2004, lagged behind its CIS neighbors, which, on average,
collect over 25 percent of their respective GDPs, compared to over
30 percent of GDP in tax revenues in Baltic countries.

Looking forward, Dr. Grigorian recommended that Armenia should explore
a number of channels which could help mitigate the potential impact
of the above problems on the future growth and reduce the social
disparities. These were identified as follows: (a) human and financial
capital of the (old and new) Diaspora; (b) improvements in the business
environment by strengthening the political will to implement reforms;
(c) closer regional integration (especially with Georgia); and (d)
more in-depth and fruitful public policy discussions.

An engaging question and answer session followed Dr. Grigorian’s
presentation, touching on many of the issues raised earlier,
particularly the costs of delayed reforms, new areas of economic
growth and the potential for a more active Diaspora involvement. A
wine and cheese reception followed.

The Armenian Students’ Association is a nationwide membership
organization that promotes Armenian culture and education by providing
Armenian communities with social, academic, and educational events.
All funds raised by the regional branches contribute to the ASA’s
scholarship fund for Armenian students studying in the United States.

The Armenian Students’ Association would like to thank St. Vartan
Armenian Cathedral of New York, the Armenian General Benevolent
Union, the Armenian Revolutionary Federation Armen Garo Gomideh,
the Columbia University Armenian Club, Armenian Network and Armenian
National Committee of New York and the New York University Armenian
Hokee Club for their unconditional support in planning this event.

For more information about the NY ASA, please visit
For more information about the
Armenian International Policy Research Group, please visit