by Julia Hakobyan
The traumatic beginning of the 1990s and the quick transition from Socialism to a free market shook Armenia's economic foundation with a mighty jolt. Waves of unease and uncertainty are still felt as this decade has reached its midpoint.
Society's "spinal cord"—the middle class—felt the shock most severely, with financial fallout that was compounded by war and blockade. Teachers became street vendors; engineers turned taxi drivers. Life savings that had been laid up in Russian Rubles turned to crumbs, hardly reflecting the years of hard work as fortunes vanished in the form of the unpredictable Armenian Dram.
Within months, the segment of society that had hoped most for "independence" practically disappeared, while the republic's political and economic elite transformed themselves into self-reproducing pockets of power, enjoying considerable success that was restricted to a network of privileged relatives and friends.
These years later, after international aid, increasing investments and reduction of unemployment, officials boast of 8-12 percent economic growth. In Armenia, like most other societies, the core of economic progress is believed to be the middle class.
Has, then, Armenia's middle class revived? Surely. Who are they? That answer is not so surely determined.
Today a definition of "middle class" depends on the prejudices, preferences or simply on the assumptions of this or that social expert. It is a task that raises more questions than answers.
Should it be defined by the same criteria as Soviet times, when classes were connected to professions? Clearly not, because, for example, the income of a professor is not determined so much by his/her work, as by the institution of employment.
Should it be defined by the same factors as in North America and Europe—by annual income? How are such standards relevant in a place where the difference between "official" salary and actual income are often vast?
A clear means of measurement is especially difficult to determine here, where the financial difference between classes may have less to do with jobs than with family support from abroad.
Maybe the Armenian middle class is simply those who live between the "haves" and the "have-nots".
Some experts say there is no middle-class in Armenia. Some say it makes up seven percent of the population. Others say it is 20 percent. Likewise, opinions differ widely on attaching a dollar figure to the definition. Some say $200 per month per family member; some say $1,000.
President Robert Kocharian, whose re-election platform was founded on economic growth, has repeatedly spoken of the necessity to promote middle class expansion. Still, however, there is no single State-supported research on the issue, and the Armenian National Statistics Service, the main resource of the country's social-economic indicators, does not offer statistics on the middle class.
Diana Martirosova, head of the Households Surveys Division of the National Statistic Service explains: "All our social surveys are directed toward revealing the poor population because poverty reduction is the priority of our country. Our statistics say that 43 percent in Armenia are poor. The remaining 57 percent of the population is out of our eyeshot."
Official figures suggest that the minimal consumer basket should make 36,000 drams (about $80) a month. A day's ration should contain at least 2,100 calories.
The cheapest product in Armenia is believed to be potato, with prices ranging from 60-200 dram per kilo (from 15 to 60 cents) depending on quality and season. The same prices are for one loaf of bread. One liter of milk is 200 dram, oil is 600, and one kilo of rice is 300 dram. The most expensive products are meat, from $2-5 per kilo; cheese, average $2; chicken, $2 per kilo. The cheapest fruits in summer are apples, pears, and watermelons and range from 20 cents to a dollar per kilo.
Pensioner Lyudmila Avagian says she can afford to buy all these products. But her "income" is only a $20 per month pension. She gets some $200 a month from her son, who lives in Russia.
Avagian believes herself to be middle class.
"Due to my son I lead a normal life here. The money he sends is enough for all my needs. Daily I spend no more that 1000 dram ($2) for food or monthly some $60. I pay from $5-20 for the communal expenses, such as gas, water and electricity. The rest I spend for treatment in polyclinics, buy clothes or something for the home."
The 66-year-old former math teacher of Yerevan Secondary School Number 83 has a two-room apartment and says she also shares money with her sister and even can put away for a rainy day.
"If I'm not the middle class representative, then who?" asks the pensioner.
The answer, according to the Armenian Sociological Association, is someone whose income is four times as much as Avagian's. The pensioner's status, the Association maintains, is not stable or secure. If for some reason money stopped coming from abroad, Avagian would quickly join the "have nots".
Gevorg Poghosian, president of the Association says a person like Avagian represents the biggest social layer in Armenia—the basic class.
However the expert says that a middle class in Armenia has undoubtedly formed. Theoretically taking into account the country's human and economic potential, the middle class could make up at least 50 percent.
But migration and an estimated 60 percent shadow economy has sapped the middle class into 10-12 percent.
"That part of the population who were supposed to sustain a middle class in Armenia, around one million economically active, educated, mostly men from 20-40 years old left the country," says Poghosian, who is also director of the Institute of Philosophy, Sociology and Law of the Armenian National Academy of Science. "Now they are in Russia or United States forming those middle classes. It made society bodiless."
In reality, Armenia has four classes, the socialist says: upper, middle, basic, bottom. The biggest layer, he says, is the "basic" class—representing some 65 percent—and formed by such diversity as pensioners, housewives, teachers, intellectuals, small businessmen and others.
The middle class, he says, is formed by entrepreneurs, high-quality specialists and lower-level government officials. It also includes young people who were educated abroad and returned to find high-paid jobs from international organizations operating in Yerevan.
The upper class—about five to seven percent—is formed by people who enjoy power and whose positions lead to opportunities. It is made up of the political and economic elite, monopolists controlling the export of beverage, food and cigarettes, owners of the country's large corporations.
The "social bottom" class according to Poghosian has threateningly increased in Armenia and is currently higher than the middle class.
"The paradox is that even the constant economic growth—last year it was eight percent—will not drastically reduce poverty," Poghosian says. "Now, 75 percent of the national income is economically absorbed by the upper class; the income distribution is inadequate."
The official figures say that during eight years from 1996 to 2004 poverty declined by 11 percent from 54 to 43 percent.
Astghik Mirzakhanian, Project Coordinator of the United Nations Development Program (UNDP) says insufficient research on Armenia's middle class development makes it impossible to learn to which group of the society now these 11 percent who managed to get off the "poor" list belong.
The National Human Development Survey of UNDP of 2003, conducted through 6,000 households, shows that according to several indications 4.6 percent of respondents lived in extreme poverty, 36.9 percent were poor, 34.2 below middle, 19.2 were identified as middle class and 5.2 as "above middle" which includes "rich" and "very rich."
"I am afraid that for now in Armenia the reliable social researches or national surveys have failed," Mirzakhanian says. "People do not write income declarations. Those who have profit hide it not to pay taxes, those who can maintain, say they are starving so that they get the social benefits. People who get $100 say during surveys they get $200, not to feel uncomfortable."
For example, one Yerevan man—a former engineer —is now a baker. He makes his cakes at home, then takes them on foot to shops. He keeps his family of three in this manner. But in the list of social security he appears as "poor", because he is technically unemployed.
"The Armenian indicators for middle class cannot be compared with other countries," Mirzakhanian says. "In the United States there is no need to reveal the status of a lecturer at a university. But in Armenia, being a teacher or a professor says nothing. He can be either middle class, or rich or poor."
Mirzakhanian says that the middle class was easy to define during Soviet times, when its existence was the major instrument of propaganda of the Soviet machine. People enjoyed the secured social status, education and medical care was free, they had relatively comfortable homes, cars, and they could afford to take vacations.
"Poverty was a taboo. All people should have been equal. Literary people did not have a right to be poor. They did not have a right to be jobless. They did not have a right to be non-educated," Mirzakhanian says. "Now all these have turned upside down, because the Soviet criteria of middle class has been devaluated. People can be rich but not educated, or have a high degree, but hardly survive."
Last summer the Armenian Center for National and International Studies (ACNIS) conducted a survey: "Public Opinion on Economic Growth in Armenia." The center polled 1,127 citizens in Yerevan and all provinces and asked them to indicate their social status.
Sixty percent identified themselves as middle class; 27.8 as poor; 5.5 as extremely poor; 2.7 well-off; 0.6 as rich; 0.5 percent did not answer.
"The surveys and researches show that people in Armenia do not know themselves which is their social status," says Stepan Safarian, Senior Analyst of Legal and Political Affairs, and Research Coordinator of ACNIS. "We got different figures by their answers and information of living standards."
When respondents were asked to describe the standards of living which their income provided for their families the ACNIS got the following picture: Forty seven percent live in extreme poverty, 31 percent are poor, 15.3 are middle class, 4.3 are above middle and 0.2 are rich.
According to Safarian the income of an Armenian family of four should be not less than $1200-1500 to allow them to live comfortably.
Safarian hopes that the state will work out ways to properly identify, then promote growth of the middle class. Because, like other analysts, he is confident that though a definition has not been agreed upon, one thing is clear: The current population who fit even the wide definitions of "middle class" is not enough upon which to build the country's future.
Capital Investment:
Three Yerevan families merging middle-class comfort with traditional Armenian values
Levon Araratian is a native Yerevantsi and for 70 years has watched the changes in his city from the fourth floor of his three room apartment on Mashtots Avenue in the city center (Kendron district).
He inherited his apartment from his father, Alexander Araratian, a prominent Armenian scientist, who was a co-founder of genetic science research in the republic and published more than 150 works.
"Yerevan saw better times," Araratian says with regret. "Sometimes we miss the Soviet times. We were secure but not independent. Now we are independent but not secure. I wish we could have both."
Araratian and his wife Violetta have two children. They live together with their son, his wife, and their two children. Araratian's daughter is also married but lives separately with her family.
Son Alexander, 35, is a programmer and works for a U.S.-based information technology company's branch in Yerevan. He says the positive changes in Armenia—especially in Yerevan—are evident but he is still concerned that living standards have been increasing too slowly.
"The first decade of independence turned out to be very dramatic for our country," says Alexander. "And it predetermined the following decade, because people who got power were thinking only about making money. It all still could be fixable but Armenia faced a brain-drain, and this is something that will take decades to replace."
Alexander worked for several months in the United States. He says despite the problems the country faces now he believes that things will become better. That's why he did not stay in the United States.
"Comparing with previous years more people feel confident now in Armenia," Alexander says. "Of course their number is not high, but if people like me or my friends leave too, then what can we expect to have?"
The Araratian family living standards are what Yerevantsis call middle class and their origin and occupation is what in Armenia is called "intellectuals". The total budget of the family including the pensions and Alexander's salary makes some $1,200 per month.
Now, two generations share one home, as is traditionally accepted in Armenia.
But soon Levon and his wife will move to another apartment, a one room flat which their son bought for them several years ago. For the parents it will not be easy to leave the center of the city for an outer district. But they say it will be more proper for the young family to live separately.
The family was fortunate to get the apartment when they did. They bought it for $9,000, considerably less than it would cost today. Now Alexander is making renovations on his parents' apartment and says that after that he will buy a car.
Alexander's mother Violetta is a retired biochemist. She is 61 but says she retired not because of age. The last 10 years she worked at the Armenian National Academy of Science, her salary was only 5000 drams ($11) a month. She spent one third of it on transportation.
"During Soviet times my wage was 120 rubles, and Levon's was 250. That was a pretty good amount for a family of four," Violetta says. "I regret that today most people can do nothing with their salaries. And because of that Armenia is losing its intellectual potential."
Yerevan's center is the best place in the country for those who want to see positive changes. Not far from the Araratian's Mashtots apartment are the country's most expensive boutiques and fanciest restaurants.
But Levon Araratian says the shops and the cafés underline the country's social inequality.
"I cannot feel happy even if I do not have social problems," he says. "Every day I see people who look for food in the garbage. A person can only enjoy his life when he sees a healthy environment around."
Like many of his contemporaries, Araratian believes the city and country's social problems are connected to its leadership. He is among those disillusioned by previous presidential elections—not merely the outcome, but the process, which was marked by mass illegalities.
"A successful government starts with a democratically elected president, which, unfortunately, we haven't had for many years," Araratian says. "If the president is elected during transparent elections, he is full of responsibilities for what he does, because he knows if what he does is not for the sake of his people, his voters will go against him. But if a president is elected through lies, he does not care at all, because he knows that the lies will help him in the future. I hope the next president will be elected democratically."
Araratian's current occupation allows him to value progress in the capital from the a unique point of view. An ecologist by education, the 70-year-old pensioner works in the Center of Ecological Research, and watches the city from the viewpoint of a geo-pathologist—a person who studies the effects of environment on people.
"The unfavorable energy in the city has been increased especially with the new construction which disfigures the city," he says. "The specialists call it 'energy of the forms'. The tendency in Europe is to be close to nature. But the tendency in Armenia is concreting the parks. It is something abnormal. Normal authorities would never go for that. I am for progress, changes, but not at such a price."
While Levon is concerned with the environment and social economic situation in Yerevan and throughout Armenia, his daughter-in-law Rubina is anxious about the future education of her two girls, Maggie and Eve.
Eve is one-year-old while Maggie turned six and is supposed to start school this fall. Her parents, though, have decided to keep her out until she is seven. Part of the reason for keeping Maggie back, is because the parents are having trouble finding a preferred school.
"We wanted to send her to a prestigious school, but after making some inquiries we learned that the level of education in so called elite schools is no better than in others," Rubina says. "Besides in such schools they (directors) ask for a $1000 magharich (bribe) just for entering the school."
Rubina says that in an "elite" school attended by her friend's daughter, parents were asked by one teacher to give the teacher a $700 washing machine as a present for Women's Day.
Rubina, a designer by education, does not work currently. She says she loves her profession but after working for several years for just $60 per month she preferred to stay home with her children.
Unlike her husband, Rubina says she would not mind living abroad—at least for a few years. She would prefer, though, to open a fashion design business in Yerevan.
Every day when Alexander and Levon are back from work the family gathers for dinner. Some days they exchange positive news, other days the news is far from perfect. But the family hopes that one day all the bad news will be turned into memories and people will only be seen going into those fine shops on their street, and none will need to dig in their garbage barrels.
Raising dreams
After graduating from a university law department, Heghine will become a parliamentarian. The first law she will write will be about gender equality. She believes that women can achieve success in Armenia if given proper opportunity.
This, at least is what a 15-year-old Yerevan girl is dreaming about.
"The chances of women and men are not equal. It is obvious when we look at the political and public figures. They are all men," says Heghine, believing that women in politics can only make things better.
Dreaming of being an MP is an unlikely notion for a pretty Yerevan "aghchik". More typically, Heghine is also fond of dancing and Latino music.
But Heghine is also an honors student at Yerevan Secondary School No 78. She learns legal terms such as "children's rights" and "democracy" during "Rights and Law" classes. And Heghine says she is smart enough to use her knowledge at home.
"Before 13, during my birthdays we always invited many relatives. I love my relatives but was not happy that I cannot be with my friends," the teenager says. "I explained to my parents that all I wish for my birthday is a party. My parents understood me and from then on I organize the parties like I want."
Heghine's parents smile while listening to the ambitions of their daughter, but say she always goes for her dream. They say they do their best to secure Heghine's and her sister Lusine's comfortable future. Luckily they have opportunities for that.
Heghine's father, Artur, is a successful businessman who for several years has had a computer business in Yerevan. The family recently renovated their three room apartment and bought a car. Last winter the family for the first time went abroad together—to Egypt, to celebrate New Year.
Artur says he is satisfied with his business, though he jokes that if he had worked this hard in Europe or elsewhere he would become a millionaire. The Matevosians have relatives in Germany and the United States but say they never were thinking of leaving Armenia.
"When our relatives come from abroad and tell us how they live we realize that here we would never live as well as them," says Artur, 40. "But we also understand that if we leave Armenia we will lose something very important. We are a family with a great number of relatives and strong family ties and losing it would be very painful for us.
"I am not sure that I would manage to educate my children according to Armenian traditions if we moved abroad. And this is another reason why we want to stay here. We want them to be Armenians."
His wife Anush, 34, worked for several years as a computer operator in the family's Internet club. But then she decided to stay at home to devote more time to the children.
"When I left the job, the first few months were depressing for me," says Anush. "I always worked and am not used to staying at home. But now I think it was the right decision, because I see that my efforts are not in vain and my girls compensate me with being the best students."
In addition to the school program, the girls take additional lessons in history, English and Armenian languages. Each month her parents pay $100 for tutors.
"When I finish all my lessons I am so tired that I cannot watch TV," says Heghine. "But my parents say that one can reach success in Armenia either by having a lot of money, or by being very clever."
Like Heghine, her young sister Lusine is an A-student at the same school. She is 12, and wants to become a singer and her music teachers say she has talent.
"My parents bought a karaoke for me and I enjoy recording and listening. But I cannot do it often because my mom always makes me study my lessons," Lusine says. "Even during vacations I spend most of the day reading. My mom says if we graduate next year with the best marks, we will go for vacation to Germany."
Anush describes her day at home as between "cooking and cleaning." Each day she goes shopping and spends some $20. In summer Anush makes preserves for winter. Now she makes mostly jam and compotes. She can afford to buy the other goods and is now satisfied with the quality produced in Armenia and with the variety available in Yerevan's upscale markets.
"Before I was also canning tomatoes for winter time, but now I am satisfied with the quality of locally produced preserves and buy the ready cans. It is not expensive and the quality is high."
While so many Armenians rely on help from abroad, the Matevosians' relatives have a means of aid in Yerevan. Artur and Anush help their extended families buy clothes and food and take care of their children.
"We cannot be indifferent toward their problems," Anush says. "Today we have means, so we will help. Tomorrow if we don't have means they will help us. This is how Armenians survived during centuries"
Anush says they are planning to have another baby.
"We never had a preference between girls and boys, like in many Armenian families. We were happy with both our girls. But now since we have two daughters we want to have a boy."
The desire to add another member to the family is a reflection of Anush and Artur's confidence in their future.
"A great number of my friends found jobs recently," Anush says. "I think the economic conditions, though still hard, are not as desperate as before.
"I believe that my children will live happily in Armenia. If I did not think so I would never stay here for another day."
The professional woman-turned-housewife is a philosopher, when it comes to political views:
"Kocharian has many reasons to be criticized," she says, "for the low pensions, for high taxes, for street trade, for bad medical service . . . But I think one person cannot be in charge of all problems.
"Yes, I too want a better president than Kocharian, but what are the guarantees that the next president will not be worse?"
Counting on Credit
Betta and Artyom married when they both turned 30, an age considered far past "prime" according to Armenian criteria.
But after having a baby and living as a family for three years, now the Yerevan couple say they never regretted the late marriage.
The Armenian tradition of early marriages, though still prevalent, is less common in Yerevan where more and more young adults prefer to start families only after education and career are secured.
"Artyom and I never dreamed of early marriage. We both wanted first to become individuals, good professionals; in other words find our right places in this world," says Elisabeth Movsisyan, or Betta, as most of her friends call her.
"Many people believe that the sooner you marry, the better, because you will have a baby. But how can a 20-year-old couple educate a child if they are in fact still children themselves."
Artyom echoes his wife's opinion.
"Our parents got married when they were much younger than us and managed to create strong families. But those times are far behind. During Soviet times it was incomparably easier to get an education, find a job and then to provide education for your children," says Artyom Avetisyan.
Now when they raise their two-year-old son, they say they have enough abilities and tolerance for that. Before, Artyom lived with his parents. But after he and Betta married, his parents moved to another apartment, which they'd bought 10 years earlier. Betta, an economist, and Artyom, an accountant both work in Yerevan banks. But their work does not make their baby Arthur feel lonely. And for that they thank their parents.
"Our parents were always of great help for us. We are just lucky with our parents. And we want to be like them for our son," Betta says.
When Betta decided to continue work after maternity leave, they hired a nanny—a growing trend among young Yerevan families. But after several failed attempts at finding a good nanny, Armenian traditional reality collided with 21st century idealism . . .
"Artyom's and my parents told us: 'That's enough harassing our grandson. Now we will take care of him.' We worked out a well-organized schedule together on when and who is in charge of the baby," says Betta, smiling.
At 8:15 a.m. Artyom's parents come to his home to take care of Arthur. They leave at 7 p.m. when Betta and Artyom are back home. Twice a week they take the child to Betta's parents' home.
But soon Arthur will spend more time with people of his age, as his parents will take him to kindergarten. Betta says that they decided to enroll in one of the city's elite kindergartens. In the morning the bus takes children from their homes and delivers them at the time the parents ask—either home, or to the parents' offices. The fee for one month is $150, an amount which is considered to be very high for pre-school education, since the fee in other kindergartens ranges from $5-20.
But Betta and Artyom say they are ready to go to that expense. Together they earn around $900 and say they can afford a good pre-school education.
Their spending power is also sustained by loans they have taken—a relatively new phenomenon, but becoming common among Yerevan's young middle class. Last year at least one bank began offering vacation loans, of up to $2,000. Betta and Artyom took loans to buy a television, a home theater, a computer, and refrigerator. They say they will make living on credit part of their routine budget planning.
The couple says that if one month they spend, for example, $500 on a refrigerator, their budget would be exhausted, because they also help their parents financially. When they take loans they can purchase several items at once and pay over several months or years by $100-200 per month.
"We are really happy that the loan system has been developing in Armenia. Many of our friends take loans, from different banks, for different goods. We are thinking of taking a mortgage in a few years," says Artyom. "There are many things we have to think about now—to buy an apartment for our son, to have enough money to provide the best education for him . . ."
But now, since Arthur only curiously looks at his parents when they discuss his future, Betta and Artyom have enough time to enjoy themselves.
Twice a week the couple meets for lunch together and on weekends they go out with Arthur to walk in the city, or if the weather is good they go for a picnic.
Last year one of Artyom's dreams came true, when he visited Africa. A chance was given by the environmental protection group of Earth Watch, a U.S.-based company which organized a trip to Ghana within the framework of the "Wild Life Conservation in West Africa" program.
The family usually spends their vacation in Armenia and goes to Jermuk, or Tsakhkadzor. But they are planning to spend their next vacation in Bulgaria.
Otherwise, all future plans are connected with Armenia.
Theirs is the Yerevan version of "the good life", and their contentment extends to political views.
"I think the last presidential elections, if not transparent, were fair," Betta says. "I mean even if Kocharian falsified the results, it was not a drastic change. I am sure most of the people voted for him anyway. I don't know a single country where all people are totally happy with their president."
Relatively happy with life as it is, the couple believes things will only get better.
"As an economist I believe that in 10 years the life in Armenia will be incomparably better than now," says Betta. "As a mother I am concerned only with my son's future. There is nothing that can make me leave Armenia. Yes, there are some things I am scared of, like earthquake, or the resumption of war in Karabakh, or something else that I am not able to control. As for the rest: Everything depends on us, and we are in the right place and in the right time to prove it."
