2013年-世界发展银行全球_Republic_of_Armenia___Accumulation_Competition_and_Connectivity_146页_3mb

Summary of Report No. 76827-AM: "Accumulation, Competition, and Connectivity"

Core Content

This report, prepared by the World Bank for the Republic of Armenia, analyzes the country's economic performance, challenges, and opportunities for sustainable growth. It emphasizes the need for a new growth model that addresses long-term structural issues, including enhancing investment, improving financial intermediation, better utilization of human resources, and strengthening competition and connectivity.

Main Points

1. Macroeconomic Developments and Outlook

• Growth and Deficit: Real GDP growth reached 7.2% in 2012, but the current account deficit remained high at 44% of GDP.
• Post-Crisis Recovery: The economy rebounded from a severe recession in 2009, with modest but accelerating growth since then.
• Employment Challenges: Despite some job creation, overall employment expansion was limited, and unemployment remained high, especially among young people.
• Shift in Growth Drivers: Economic growth before the crisis was driven by construction and domestic services, but this model proved unsustainable. The focus is now shifting to industry and modern services for more sustainable growth.
• Exchange Rate and Exports: A depreciation of the Armenian Dram and increased export volumes have contributed to an improved external balance.

2. Saving, Investment, and Financial Intermediation

• Saving Trends: Domestic saving increased from 5% to 35% of GDP, while public saving contributed about 5%.
• Investment Allocation: Investment was often directed toward non-productive sectors, and the sectoral allocation of investment plays a critical role in economic outcomes.
• Financial System: Banks dominate the financial system, accounting for 92% of assets, while equity and securities markets are underdeveloped.
• FDI Role: Foreign Direct Investment (FDI) has been an important supplement to domestic savings, though it is less volatile than other forms of foreign capital.
• Pension Reforms: The introduction of mandatory individual pension accounts is expected to boost investible resources significantly by 2020.

3. Human Resources

• Labor Force Participation: Armenia's employment-to-population ratio is below the European average (53% vs. 60%), and improving it could raise GDP by 8%.
• Unemployment: Unemployment remained at 18% in 2012, much higher than the regional average of 12%.
• Youth and Gender Disparities: Young people and women were disproportionately affected by the economic crisis.
• Diaspora Engagement: The diaspora is a key untapped resource for employment and investment. Policies to promote diaspora participation are recommended.
• Skills and Productivity: The labor market requires better alignment of skills with demand, particularly in manufacturing and services.

4. Competition

• Competition Policy: A comprehensive competition policy framework is needed to ensure fair market practices and reduce barriers to entry.
• Sectoral Barriers: The presence of state-owned enterprises and price controls in certain sectors has hindered competition.
• Food Sector Case Study: Price differences in food products between Armenia and CIS countries highlight inefficiencies and the need for market liberalization.
• Policy Recommendations: Strengthen enforcement of competition laws, define "economic entities" clearly, and improve merger control policies.

5. Land Connectivity

• Transit Situation: Armenia's landlocked position makes trade logistics a major challenge.
• Trade Partners: The country's main trade partners include the EU, Russia, and CIS countries.
• Costs and Efficiency: Export costs remain high, and there is a need for improved logistics and transportation infrastructure.
• Policy Focus: Enhancing land connectivity is essential for economic integration and reducing trade costs.

6. Air Connectivity

• Institutional Setup: The aviation sector is dominated by a few carriers, with limited connectivity to international destinations.
• Fare and Cost Analysis: Airfares and turnaround charges are significant, affecting competitiveness.
• Liberalization Impact: Liberalizing the air sector could lead to more efficient operations and lower costs.
• Policy Recommendations: Improve the regulatory environment, promote competition, and enhance international air routes.

7. Internet and Communication Technology (ICT)

• IT/ITES Industry: Armenia has a strong IT/ITES sector, but it needs to be further developed.
• Location Readiness Index (LRI): Armenia ranks well in the LRI, indicating potential for growth in the IT sector.
• Labor Market: A ready-to-hire population and lower operational costs support the IT industry.
• Policy Focus: Enhancing the ICT environment and promoting digital infrastructure is key to boosting competitiveness.

Key Information

• Growth Model Shift: The previous growth model based on construction and domestic services is no longer viable. A new model focused on sustainable growth, employment, and international competitiveness is needed.
• Structural Reforms: The report advocates for structural reforms in financial intermediation, labor market, competition, and connectivity to support long-term growth.
• Investment and Saving: Domestic saving has increased significantly, but investment is still concentrated in non-productive sectors. A more balanced allocation of investment is necessary.
• Connectivity Importance: Improved land, air, and ICT connectivity is crucial for Armenia to integrate with global markets and reduce trade costs.
• Challenges: High unemployment, inefficient financial systems, and limited market competition are major challenges for sustainable growth.

Policy Recommendations

• Enhance Financial Intermediation: Develop credit services for MSMEs, improve collateral mechanisms, and expand financial products.
• Promote Diaspora Engagement: Leverage the diaspora for investment and employment opportunities.
• Strengthen Competition Policy: Implement effective competition laws, define economic entities, and monitor merger control.
• Improve Connectivity: Enhance logistics, air routes, and ICT infrastructure to support trade and investment.
• Foster Sustainable Growth: Focus on industry and modern services as the main drivers of future growth.

Conclusion

The report underscores the need for a structural transformation in Armenia's economy, moving from a model of short-term growth to one that is more inclusive, competitive, and sustainable. It calls for coordinated policies across investment, financial intermediation, human resources, and connectivity to ensure long-term economic development and poverty reduction.