"ECONOMIC CRISIS" CONFERENCE – POVERTY LEVELS TO RISE IN ARMENIA

hetq.am/en/society/7653/
2009/04/14 | 13:58

Society economy

A conference entitled "Social Impact of the Global Economic Crisis on
Armenia" kicked-off today in Yerevan. The objective of the conference
is to discuss consequences of the global economic and financial crisis
and find measures to mitigate its impact on vulnerable groups. The
conference brought together around 120 participants to debate the
issue and to come up with possible avenues to mitigate the impact.

Organized by the Ministry of Labor and Social Issues, the United
Nations (UN), World Bank (WB) and International Monetary Fund (IMF)
offices in Armenia the conference brings together some 120 participants
from Armenia and abroad.

Representatives from international organizations warned that the
global economic and financial crisis could have a serious impact on
the Armenian economy and affect the country’s ability to achieve the
Millennium Development Goals (MDGs) by 2015. UN, WB and IMF officials
stated that while the effects on the Armenian economy are already being
felt, the population is now starting to feel the social impact as well.

The exposure and impact of the crisis varies across countries and
sectors, but it is becoming clear that what started as an economic
crisis is now turning into a human development crisis. During the first
two months of 2009 the unemployment rate in Armenia has increased,
while the Gross Domestic Product (GDP) has decreased by 3.7 percent
compared to the same period in 2008. Moreover, non-commercial private
transfers dropped by about 35 percent in February 2009 compared with
a year earlier.

According to the World Bank report on "Implications of the Global
Economic Crisis for Poverty in Armenia," the current crisis could
push 172,000 more people below the poverty line in 2009-10, increasing
the total number of poor to an estimated 906,000 people, out of which
297,000 people will be "in extreme poverty". A large part of Armenia’s
gains in reducing poverty over the last years would be erased.

"In many developing countries, the consequences of the crisis could be
a possible reversal of the gains in human development and progress
towards the achievement of the MDGs, especially in the areas of
healthcare, including reduction of child mortality, improvement
of maternity health, and education," said Ms. Consuelo Vidal, UN
Resident Coordinator.

Acknowledging the government’s commitment to maintain the current
level of funding for the social sector, including salaries, pensions,
family and other benefits, UN Agencies will support the government’s
efforts in devising solutions that will draw together all stakeholders,
including international organizations, private sector and the civil
society. In addition, the UN in Armenia is in the process of tailoring
its current programmes to address the needs of those most affected
by the crisis.

"We need to be fast and flexible and seek cost-effective solutions to
emerging problems, particularly, focusing on bringing international
experience and knowledge to help in developing recovery mechanisms,"
Ms. Vidal emphasized.

"Economic growth in Armenia has led to substantial poverty reduction,
but these achievements are now at risk. The global economic crisis
will have potentially serious implications for poverty and this
calls for significant responses by the Government of Armenia and its
development partners," said Aristomene Varoudakis, World Bank Armenia
Country Manager.