On Monday the Executive Board of the International Monetary Fund (IMF) agreed to disperse $158 million in an emergency loan to Armenia to help offset the economic downturn. Just a few months ago the IMF had issued a $540 million loan shortly after the dram deflated 70 drams against the dollar virtually overnight.
According to official statistics, Armenia’s Gross Domestic Product fell by as much as 15.7 percent since the beginning of the year, hovering at around $2.4 billion.
What I want to know is–who is exactly feeling the heat of the recession in Armenia? The Deno Gold Mining Company just let go between 200-300 workers, citing expiration of contracts as the reason, even though many employees admitted that their contracts were open-ended. This has happened strangely enough while the demand for gold has increased significantly in recent months–just yesterday the price of gold in the US market was $924.10 per ounce, which obviously means it’s is high demand. Why scale back operations now?
It’s true that some construction projects have come to a halt in Yerevan’s center, but the construction of many sites have been stop-and-go for years. Work on an eight-story building just a block down from where I live on Hanrabedutyan Street has been going on for nearly four years for instance–it resumes for a month and stops for two months for some bizarre reason. But has the economic downturn affected its ongoing construction in the last few months? Who can say.
Meanwhile, citizens are still living the high life. The cafe season is in full swing, people are out and about, and there are more cars on the road than ever before. A store goes out of business one day, and the following week a new tenant moves in. So I don’t understand who is feeling the crisis per se.
At the company where I work some people who were employed as software programmers were recently laid off, but they managed to find work elsewhere in their field. Meanwhile, several middle-aged citizens are working on gardening projects in green spaces and small plots of land across the city, something that wasn’t the case a year ago, and there are more women sweeping the streets, so there’s work. Some of the loan money, an insignificant amount, seems to be trickling down that way.
But where is the rest of the money going to? Is it possible that government officials are pocketing it somehow? There seems to be an increasing divide between the haves and the have-nots in favor of the former during this “recession,” with no end in site. I don’t get it. This is the paradox of the Armenian economy.
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