MOST ARMENIANS ‘NOT DEPENDENT ON REMITTANCES’
By Shakeh Avoyan

Radio Liberty, Czech Republic
Aug. 10, 2006

The Central Bank of Armenia (CBA) cited on Wednesday the findings of
new research to substantiate its assertion that most Armenians do not
live off external cash remittances and are therefore not suffering
from the dollar’s continuing dramatic depreciation.

Karine Karapetian, head of the bank’s statistics department, said a
household survey commissioned by the CBA has found that only 37 percent
of Armenian families regularly receive and rely on hard currency sent
by their members working abroad. She said most of those families are
part of the middle case, contrary to the widely held belief that the
beneficiaries of remittances are mainly low-income people.

However, this claim seems to be in conflict with the survey’s finding
that the incoming financial assistance is enough to meet only the
basic consumption needs of 76 percent of its recipients. Only one
percent of them can afford to save some of that cash.

CBA Chairman Tigran Sarkisian and other officials have consistently
insisted that poor households have been largely unaffected by a more
than 40 percent plunge in the dollar’s value against the Armenian
dram that has been registered since January 2004. They say a strong
dram has meant low inflation, which is far more important for the poor.

Government critics claim, however, that the Armenian authorities have
been "artificially" bolstering the dram to siphon off a large part
of the hard currency flowing into Armenia and benefit a small circle
of government-connected importers. The CBA has repeatedly dismissed
the claims, blaming the dram’s appreciation on recent years’ sizable
increase in the volume of the remittances.

According to Karapetian, they totaled at least $940 million last
year and are projected to rise by 17 percent this year. The dram has
already gained 13 percent in value against the dollar since January,
reaching a new high this week.