Armenia: The Challenges of Growth

by John Hughes

by Julia Hakobyan If, as in other societies, real estate prices are an indicator, Armenia has entered a Golden Age in home buying. Or in home selling, rather, as the years of double-digit Gross Domestic Product have paralleled a dramatic rise in the cost of home-buying. Over the past decade, real estate prices—starting from a low point of the post-Soviet collapse—have increased tenfold, reaching amounts comparable to some European countries.

by Suren Musayelyan When the Armenian currency, the dram, first began to show signs of appreciation in late 2003, few could have predicted the dramatic impact that exchange rates would continue to have on the daily business of buying and selling in the country. The dollar traded as high as 585 in 2003. By mid-October of this year it had hit 328—a drop of more than 40 percent and by late October it hit 320, dropping 10 drams (3.3 percent) in one three-day period. Central Bank of Armenia says that the dram's rise has not peaked.

by John Hughes In contrast to societies in which companies spend millions on public-relation ploys to attract media attention, business practice in Armenia remains an insular, guarded realm, in which corporate heads discourage attention rather than solicit it. Efforts to profile businesses for this series of articles were a reminder that even successful businessmen would rather turn off the spotlight than be found in it.

by Richard Giragosian Visitors to the Armenian capital Yerevan come away impressed with the city's outward signs of economic growth and activity. Further from the surface of facades and evidence of consumption, however, there is a deeply held belief that the display of economic growth and the phenomenal construction boom in Yerevan are built on corruption. In addition to this pervasive perception, there is also a widespread view that much of this development is tied to money laundering.

by Haroutiun Khachatrian For six consecutive years, Armenia has enjoyed double-digit economic growth. Turning the corner in 2001, the Gross Domestic Product (GDP) has stayed above 10 percent, even reaching 14 percent in 2003 and 2005.

by Haroutiun Khachatrian Competition is the basis of the free market economy, which is why state regulations exist for the protection of fair business practice. In countries such as Armenia, still finding their way in their evolving commercial structure, the need to ensure fair competition is especially critical. In Armenia's case, a country of only three million and about 30 percent poor, there is little to fight over, further underscoring the absolute necessity for an even playing field for all.

by Juilia Hakobyan A glance across Yerevan's panorama shows a city in the throes of construction, with cranes and dust and noise, and expectation mixed with apprehension. Barely a street in the center of the capital is unmarked by blue tarpaulin stretched over unfinished projects, or great craters chiseled into the ground for still more building work to begin.

by Richard Giragosian At home and especially abroad, Armenians have long been renowned as "good businessmen." Putting aside the veracity of that reputation, it is worth investigating Armenians' place within the larger business environment. More specifically, beyond the years of double-digit economic growth, does Armenian business really have what it takes to overcome its neighbors and to engage in the global marketplace?

by Julia Hakobyan Remember those early 1990s-era photos of empty shop shelves and depressed faces waiting in bread lines? That was then. Ever thought you'd be able to buy toothpaste for your dog in a food store in Armenia? This is now. Among the many signs indicating that Armenia has turned the dark corner on economic transition are, literally, the bright, colorful signs drawing customers into the dozens of modern grocery stores that are so noticeable they have become landmarks.