Armenia is divided between Old and New; between old tactics and psychology (and a lot of wistful thinking of the old days), and bold moves to exploit Armenia's greatest strength, the power of the mind to come up with something new.
The challenges that faces the economy, as it is does the country politically and socially, are as much to do with generational differences as they are with wiser use of resources and competing in the world market. The older generation still looks to the glory days of massive Soviet factories, while the young race to the information and service age. The young have adapted remarkably well to the new market economy, often surpassing their parent's abilities to earn income. With very few exceptions, the greatest wealth generated in the country is by those under the age of 30. On the other side, older folks still rely on back-room deals and Soviet thinking to conduct business, which has limited their competitive edge. Investors by and large conclude deals with young entrepreneurs, and the young hold the best potential for developing the economy.
In the last five years, tremendous positive changes have occurred in the country. Electrical power has been restored, transportation sectors have reopened, the energy blockade has been broken by gas and oil supplied by Russia and Turkmenistan, factories have begun to resume limited production, and the private sector is steadily growing, particularly in Yerevan. Macroeconomics and official economic reports aside, the visitor will see evidence of new wealth in the country: new shops, cafes and restaurants are opening at an amazing rate, people are well dressed and fed, and construction cranes are beginning to move again. A real middle class is beginning to grow, and should government promises to overhaul the tax system (which acts as a disincentive to pay, with a crushing 70% combined income and social security tax) be realized, the economy can achieve significant growth. As it is, the country is divided between Old and New; between old tactics and psychology (and a lot of wistful thinking of the old days), and bold moves to exploit Armenia's greatest strength, the power of the mind to come up with something new.
BSEC (Black Sea Economic Cooperation Business Council) Site
Rosbalt News Service: Armenia
BISNIS: Energy Opportunities
Central Bank of Armenia
Branding Armenia's IT Sector - The Irish experience
World Bank Armenia Report
IMF Armenia Report