2001年-世界发展银行全球_Armenia___Growth_Challenges_and_Government_Policies_Volume_2_Main_Report_212页_13mb

Armenia: Growth Challenges and Government Policies Summary

Core Content

This report, prepared by the World Bank's Poverty Reduction and Economic Management Unit for the Europe and Central Asia Region, analyzes the growth challenges and government policies in Armenia, focusing on the period from 1994 to 2000. It outlines the main structural weaknesses in the Armenian economy, the role of the public sector in enterprise restructuring, and the necessary policy reforms to promote sustainable economic growth and development.

Main Characteristics of Recent Growth Performance

Macroeconomic Overview

• Armenia's economy grew at an average rate of about 5% since 1994.
• The growth was primarily driven by a recovery from a severe contraction in the early 1990s.
• Despite macroeconomic stability and reasonable structural reforms, the growth has not translated into significant poverty reduction or improvements in living standards.

Growth Trends

• Real GDP growth remained positive after a 50% decline in GDP between 1991 and 1993.
• Inflation dropped sharply from over 1800% in 1993 to 6% by the end of 1996, and was under control in 1998-2000.
• The private sector's share in GDP increased from 11.7% in 1990 to 74.5% in 1998.
• The government initiated privatization, with over 80% of small enterprises and 65% of medium and large enterprises privatized by the end of 1997.

Export and Investment Performance

• Exports increased from $230 million in 1992 to $441 million in 2000.
• FDI per capita was low, at $1.1 in 1996 and $5.4 in 2000.
• Investment performance was limited, with a fiscal deficit that remained manageable but not sufficient to drive long-term growth.

Employment Trends

• Employment generation was weak despite growth.
• The unemployment rate remained high, especially among the youth and the elderly.
• The non-employment rates were still significant, indicating a lack of job creation.

Main Constraints for Investments and Growth

Business Environment and Institutional Barriers

• The business environment in Armenia was poor, with high administrative and legal barriers.
• Weak private sector capabilities prevented Armenian firms from integrating into the global economy.
• The government's efforts to improve the business environment were hampered by institutional weaknesses and corporate governance issues.

Financial Constraints

• Private credit was limited and costly.
• The financial constraints on enterprises were significant, with many firms unable to access sufficient financing.
• The average interest rates for loans were high, further limiting investment.

Regional Conflicts and Blockades

• The blockade of Armenian borders and regional conflicts (e.g., Nagorno-Karabakh, Georgia) had a negative impact on economic performance.
• These conflicts created a high degree of uncertainty and hindered trade and investment.

Fiscal and Quasi-Fiscal Subsidies

• Subsidies were significant, with quasi-fiscal subsidies reaching 6% of GDP in 1996.
• The government's fiscal constraints were not binding due to external financing and budget support.

Way Forward: Strategy to Improve the Business Environment

Policy Recommendations

• The report emphasizes the need for deregulation and improvement of the business environment.
• It suggests that administrative barriers should be removed to promote investment.
• A deregulation agenda is proposed, which includes reforms in trade, finance, and legal frameworks.

Role of Restructuring Agencies

• The establishment of specialized restructuring institutions (e.g., Restructuring Agencies) is recommended to facilitate enterprise restructuring and new private entry.
• These institutions would initially target a limited group of managers and investors but would eventually expand their reach.

Strategic Agenda

• The strategic agenda includes accelerating enterprise restructuring, improving the business environment, and promoting private sector development.
• Donors are encouraged to support these efforts through financial and technical assistance.

Sectoral Policies to Facilitate Growth

Energy Sector

• The energy sector is a major contributor to the economy but faces significant challenges.
• Energy imports and energy consumption per unit of GDP are high, indicating inefficiencies.
• The nuclear generation is a key source of energy, but the sector requires further reforms.

Agriculture Sector

• The agriculture sector has shown some recovery but remains underdeveloped.
• Land ownership and cropping areas have changed significantly since the early 1990s.
• Agricultural productivity and price changes have been inconsistent.

Transport and Telecommunications

• The transport sector has been affected by regional conflicts and blockades.
• The telecommunications sector is underdeveloped, with limited infrastructure and high costs.

Housing and Utilities

• The housing and utilities sector requires significant policy distortions and institutional weaknesses to be addressed.
• Housing prices and utilities costs have been rising, affecting affordability.

Conclusion and Lessons from Growth Theory

• The report concludes that medium-term growth rates are unlikely to exceed 3.5-4% without significant improvements in investment performance and structural reforms.
• It highlights the importance of human capital and entrepreneurial capabilities in driving growth.
• The stagnation trap is a key challenge, and the report suggests entry points for breaking it, including enterprise restructuring and new private entry.

Key Information

• Currency: Armenian Dram (AMD)

• Exchange Rate (June 30, 2001): 1 USD = 554 AMD

• Fiscal Year: January 1 to December 31

• Main Challenges:

  • Weak export and investment performance
  • Limited new entry and employment generation
  • High administrative and legal barriers
  • Financial constraints for the private sector
  • Regional conflicts and blockades
  • Institutional weaknesses and corporate governance issues

• Policy Recommendations:

  • Deregulation and improvement of the business environment
  • Establishment of restructuring agencies
  • Promotion of private sector development
  • Sectoral reforms in energy, agriculture, transport, telecommunications, and housing

• Strategic Agenda:

  • Accelerating enterprise restructuring
  • Facilitating new private entry
  • Enhancing public sector involvement in restructuring
  • Improving the legal and institutional framework

• Donor Role:

  • Donors can support restructuring through financial and technical assistance
  • Matching grant schemes and advisory services are suggested as tools for enterprise learning and development

• Growth Prospects:

  • Based on growth theory, Armenia's growth is likely to remain low without significant reforms
  • The report emphasizes the need for long-term strategic planning and institutional design to break the stagnation trap and promote sustainable growth.