Los Angeles, CA – The Armenian National Committee of America – Western Region issued a statement today hailing the most recent economic developments in the Republic of Armenia. The statement was made to highlight the recent announcement by the Wall Street Journal/Heritage Foundation’s “Index of Economic Freedom” and the Interfax report issued this week regarding Armenia’s industrial output growth being top in the Commonwealth of Independent States (CIS).
In the recently released annual ‘Index of Economic Freedom’ by the Wall Street Journal/Heritage Foundation raised Armenia up one spot in its rankings. The index is supposed to measure how strong the market institutions in a given economy are. Almost all of the countries of the world are ranked. Besides numerical rankings, each country is designated ‘free’ ‘mostly free’, ‘partly free’, ‘not free’, or ‘repressed’. Armenia placed well last year ranking 45th worldwide, ahead of countries such as Greece and Brazil. This year Armenia continued its push toward the free market and its ranking was consequently raised to 44th (‘mostly free’).
There were two categories where Armenia showed marked improvement, monetary policy and fiscal burden of government. On the monetary side, Armenia has persisted in its drive to tame inflation. In 2001, the inflation rate was steady at a low 3.1%. On the fiscal side, Armenia cut government expenditures to 23% of GDP, down from 25.9% in 2000. Armenia also posted low tax rates, with the highest income tax bracket paying 20% and the average taxpayer paying a low 10%.
According to the Interfax Information Group, a leading provider of political, business and financial news from Europe and Asia with special emphasis on emerging markets, of all the CIS member nations, the Armenian processing industries expanded at the highest rate, 15.1%, in January-October 2002, compared to the same period last year.
During the successful ANCA-WR led efforts earlier this year to establish a California Regional Trade Office in the Republic of Armenia, the ANCA-WR and its numerous local chapters continuously stressed the tremendous market potential of Republic and were successful in conveying the potential of the region to California State Legislators ensuring an unprecedented victory. The California Regional Trade Office was signed into law by Governor Gray Davis in September of 2002 and will serve as a model for other California trade missions abroad.
“The continual stream of positive economic news from Armenia is very encouraging and simply reinforces what organizations like the Armenian National Committee have been saying,” commented Leon Kirakosian, board member of the Foundation for Economic Development (FED) an agency focusing on improving trade relations between California and the former Soviet Republics.
“We are very excited about what the future holds for Armenia and the other former Soviet Republics and we feel that California made the right decision by basing their trade presence in the region in Armenia,” Kirakossian added.
As Armenia’s economy continues to improve and move towards the free market, neighboring regions and countries also stand to benefit from Armenia’s progress.
“Armenia’s Caucasian neighbors have consistently ranked low on the index. Georgia placed 113th this year while Azerbaijan came in at 104th. Turkey, which is also currently experiencing a recession, placed 119th. All three countries are considered ‘mostly unfree’ economies bordering on ‘repressed’,” commented Joeseph Simonian, an economist who has researched on the emerging markets in the former Soviet Union at Columbia University.
The Wall Street Journal Freedom Index report noted that unlike Armenia, there is not even the drive towards reform in these countries. The report lauded Armenia’s efforts and projected a bright economic future for Armenia if the pace of the reforms continued.
The Armenian National Committee of America (ANCA) is the largest and most influential Armenian American grassroots political organization. Working in coordination with a network of offices, chapters, and supporters throughout the United States and affiliated organizations around the world, the ANCA actively advances the concerns of the Armenian American community on a broad range of issues.