The World Bank today presented results of a study entitled “Future Armenia-A Systematic Country Evaluation” describing the economic model of Armenia as having exhausted itself and in need of change.

Citing a low growth rate, double-digit unemployment, and one-third of the population living under the poverty line, World Bank experts told a Yerevan audience that the new model would target fundamental relations of growth-poverty and would resolve system-wide problems linked to a shrinking and aging labor base and climate change.

“If no change is made to the current economic strategy, then Armenia will only be able to ensure a modest per capita growth that will not greatly impact poverty. Moreover, Armenia faces two fundamental systematic challenges-an aging and shrinking population and climate change-both of which will further decrease the country’s growth potential if the economic policy isn’t changed,” reads the World Bank report.

The World Bank proposes:

• Rebalancing growth by a transition to greater exportable goods and services. To fashion a business sector that is dynamic, competitive and creates jobs.
• Increase individual productivity and remove obstacles to getting work
• Ensure flexibility of the economic model

World Bank experts noted that Armenian exports aren’t all that competitive due to limited variety and low quality.

While growth of agricultural exports has been noteworthy, the increase has mainly been based on tobacco and alcohol products.

The experts said that while Armenia’s current economic model has led to a drop in poverty, it’s mostly been in the Yerevan.

They also reported that instead of a growing middle class, more people are becoming economically vulnerable.