THE LOGICS OF THE NEW DEVELOPMENTS
By Mher Ohanian
Yerkir.am
June 09, 2006
New rapid developments are under way in the world market, and
they significantly affect the economies of transitional countries,
including Armenia.
And this is especially true for basic sectors of economy, such as
mine industry, electronics and high technologies. The competition
between the euro and dollar as well as roaring prices for oil and
gold also have their indirect impact on the Armenian financial market.
External factors
It is a fact that the Armenian economy can develop only as an open
system that is integrated in the world economy. A self-isolation
could prove devastating.
It is evident that the situation in the world market for Armenia to
develop its basic sectors is currently very favorable. First of all,
it applies to the unprecedented hike of the prices for color metals:
copper, molybdenum, nickel and aluminum. For example, the price for
copper in the world market has grown three times in the past 3-4
years, reaching $8,000/ ton. If used efficiently, this factor could
ensure serious income for the sector and could help modernize the
color metal industry of the country.
Armenia is among the number of transitional countries that managed to
ensure a double-digit growth in the past six years, while, according
to experts, countries in transition usually are hit by two waves
of economic decline: the first one begins in the beginning of the
transitional period and though lasts for a short period but leaves
devastating consequences.
Armenia’s ‘transformational decline’ was one of the worst among the
CIS countries, when between 1990-1993, Armenia lost sixty percent
of its economy and more than 1 million jobs. After a cease-fire in
the Karabakh war was reached in 1995, the Armenian economy showed
progress in terms of its macroeconomic figures.