These data are from the World Bank “as of 2012, about 18 % of the workforce in Armenia was unemployed. Die to high unemployment level and low involvement of the labor force, the employment level of population is lower in Armenia than in most European countries. It is equal to 53 %, and is significantly lower than the European average of 60%. “These data were published this year, in the World Bank (WB) “Republic of Armenia: Accumulation, Competition and Connectivity” report. True, WB has not yet conducted 2013 survey, however, the changes in the labor market, unemployment, and the labor force can hardly be considered improved.
As per World Bank analysis, the unemployment rate in Armenia is still quite high despite the fact that the unemployment rate rose slightly in 2011-12. And, those who have at least work, few of them can be proud or satisfied with their salaries. This is proved by the World Bank study. “Many having employment, including those having higher and vocational education, work in low-paid, low-productivity sectors,” says the World Bank report. Note that, since July of next year, it is expected to increase the salaries of state employees in a variety of fields. And those, who contrary to the World Bank report can really be satisfied with their salary of next year, under expected inflation, would be the President of Armenia and the ministers. In 2014, their wages will grow too much.
Prior to the global economic crisis, the authorities of Armenia, with and without any reasons, were pointing out the growth in construction industry, which, of course, is undeniable for that period, but there is a remarkable passage in the same report. “Despite the construction boom, unemployment rate remained high by 2008, while die to the global economic crisis it continued to grow even more.” In addition, the report includes a very important factor of why unemployment is growing in Armenia, and it’s not just the lack of jobs, but the sense of mistrust of people.” Based on the survey data, in addition to the calculated percent unemployment, there is another way of measuring “excess” unemployment percentage, which represents the people who can work but are not actively seeking job because they are frustrated and have no hope of finding a job. It follows that unemployment affects about 30 % of working-age people.”
According to the World Bank report, unemployment is high among young people. “Education does not provide employment,” says the report. The level of underemployment is also high in Armenia, in other words, there are people who would like to work longer hours during the day, but are deprived of the opportunity. According to the report, in 2011, the underemployment rate was 17%, in this regard, Armenia is included among the countries with a very high underemployment rate with the South Caucasus countries.
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To provide employment for the population, small enterprises also play an important role, which, however, according to the report, are either few in Armenia, or are gradually getting closed due to unfavorable business environment. WB analysis indicated that there are a small, dynamic businesses and create jobs. And, although we take the best places in the world by the index of flexibility of doing business, however, the World Bank study shows a different picture. Thus, the report says, “Very few people in Armenia trying to do business, and a very few are successful. As per 2012 research “Life in Transition”, only 12 % of the population has ever tried to do business, only 6 % of them has achieved success. The low level of entrepreneurship and lack of small dynamic companies are also evidence of unfavorable business environment.” Moreover, as noted in the report, insufficient knowledge of workers is also an obstacle to doing business, especially, modern and innovative enterprises are affected.
Potential labor does not cherish great hopes with state institutions offering jobs. Pursuant to the WB analysis, less than 10 % of unemployed apply to the state employment services. The report indicated that job seekers more refer to their friends and relatives rather than state institutions.
The World Bank has estimated that the GDP in Armenia will increase by 8% if the employment rate is brought to 53 % from 60%, and to maintain the level of involvement of the workforce by 2015, 120 thousand new jobs will be needed, and 350 thousand jobs to achieve the EU 15%. To open new jobs, as indicated in the report, investments are needed, and for investments, equal competitive and favorable business environment is needed. However, in this regard, according to the report, Armenia is in the worst position.
“According to the Global Competitiveness Index, from the perspective of antimonopoly policy and intensity of internal competition, Armenia is in the last place in the list of European and Central Asian countries. Such low rate reflects the lack of dynamism in the economy of Armenia, which, in its turn, is caused by high unemployment and low revenues of populations,” says the World Bank analysis.
Nelly BABAYAN
Dear Nelly, can you please mention, which World Bank report are you citing? And which year?