Armenian Remittances Soar In 2011
A Eurasianet partner post from RFE/RL
YEREVAN -- Cash remittances sent home by thousands of Armenians working in Russia and other countries increased by more than 23 percent in the first 10 months of this year compared to 2010, RFE/RL's Armenian Service reports.
Central Bank of Armenia (CBA) data shows that local commercial banks processed almost $1.24 billion in noncommercial cash transfers from abroad, up from just over $1 billion in the same period last year.
The total amount of incoming wire transfers, which includes funding for business transactions, reached $1.56 billion. It was $1.27 billion from January to October 2010.
More than 80 percent of the cash inflows came from Russia, which is home to hundreds of thousands of Armenian migrant workers. The United States, which also has a sizable Armenian immigrant population, accounted for roughly 5 percent of the total.
The remittances have long been a major source of income for a large part of Armenia's population. A rapid rise in their volume in the early 2000s contributed to double-digit growth in the country's economy, which came to an end with the outbreak of the global recession in late 2008.
Economic growth in the country resumed in 2010, helped by an almost 14 percent rise in remittances.
According to the CBA, the remittances totaled $1.3 billion, equivalent to over 13 percent of gross domestic product. The sharper rise in 2011 remittances is one of the reasons why economic growth is on course to exceed 4 percent this year.
Armenia's heavy dependence on the cash transfers also makes it vulnerable to a renewed economic crisis around the world and in Russia, in particular.
Moody’s Investors Service, a credit ratings agency, emphasized this dependence as it lowered its outlook for the Armenian economy late last month. It warned that an economic slowdown in Russia resulting from a drop in global commodity prices could seriously cut into Armenian remittances.
Residents of rural areas of the country, where unemployment rates have been above the nationwide average, are particularly reliant on financial support from their family members working abroad.
Frunz Ohanian, an elderly farmer in the village of Geghanist in the southern Ararat Province, and his wife Satenik, are one such family. They have for years lived off money wired by their older son, who migrated to Russia a decade ago.
"Last month he sent a lot of money so we can meet our basic needs," Frunz Ohanian told RFE/RL on Wednesday (December 7).
Ohanian said he still hopes that his son, daughter-in-law, and four granddaughters will eventually return home. "If the situation improves, if there are jobs, of course they will come back," he said. "I don't doubt it."
Sign up for Eurasianet's free weekly newsletter.