Expert: Actual unemployment in Armenia makes up 30%

ArmInfo. Unemployment in  Armenia keeps growing due to the unfavorable business environment and  socio-economic situation. The outflow of population from the country  is dramatically growing, Nana Heruni Managing Director of Tanger  Recruitment Company, has told ArmInfo's correspondent. 

"The migration has political, economic and psychological reasons. In  addition to our state's favorable policy regarding depopulation of  Armenia, the foreign states, particularly, Russia and the United  States, are conducting a policy aimed at attracting gifted and  enterprising Armenians," Heruni says, adding that the Russian higher  education institutions annually provide Armenian citizens with free  education and hundreds of Armenian students with scholarships. In  2014, the United States issued 2,000 green cards to the citizens of  Armenia, whereas for the citizens of Georgia and Azerbaijan the  number of green cards was twice and four times lower, respectively.      

"Very often people in our country come across problems when launching  their own business due to monopolization of certain economy sectors,  unequal competition, corruption that makes Armenian businessmen  launch production in Georgia, for instance, where the business launch  is encouraged and all favorable conditions are created," Heruni says.  Ordinary citizens leave for other countries (particularly, to Russia)  to find a job and this ruins a lot of Armenian families. The expert  recalls that an average of 30,000 - 50,000 people per annum leave  Armenia. According to the Migration Service of Armenia, the annual  indicator of those leaving abroad is 60,000-70,000 people (up to  100,000 due to seasonal factors). As a rule, half of them do not  return. 

In this context, Heruni recalls the compatriots who left Armenia  20-25 years ago, many of them would like to return to Armenia and  launch a business here. However, the legal and tax field is far from  being favorable. On the contrary, it is being toughened with every  passing year. "The impression is that they are trying to drive out  all the remaining businessmen," she stresses, noting that most of the  Syrian Armenians face big financial and social problems in Armenia  and have to look for better life somewhere else. "Instead of helping  these people to integrate in our social life, the authorities put a  spoke in their wheels. The government overtly supports migration and  considers it to be a positive phenomenon from the viewpoint of  macroeconomics," she notes. Heruni points out that the state  considers the growth in Russian transfers to Armenia (due to the  increase in the number of migrants) to be the most effective way to  reactivate economy. "This is a criminal policy in many senses and can  be disastrous for Armenian people," Heruni says.  

The expert emphasizes that the actual unemployment in Armenia is  about 30% (according to international organizations' data), whereas  the statistics of the republic publishes 18%. "This is a wrong and  ridiculous figure because it is based on the number of citizens who  apply to the State Employment Service. But the number of those who  register at the Service is very small," she says, noting that the  Service is equipped and financed well enough and could have been more  active. "Amid tough competition, experienced people are very often  left jobless. It is necessary to create a state program to motivate  the employers who hire people above a certain age. Caring about aged  people is the prerogative for the public sector rather than the  private one," she stresses.           

The state programs implying involvement of private employment  agencies cannot cause the private sector's interest, she says.  Notwithstanding this, a year ago Tanger managed to successfully  implement a UN- funded project on employment of Syrian Armenians  through the mediation of the State Employment Service. At the same  time, the company is successfully cooperating with other  organizations, particularly, with OFFI (Office Francais de  l'Immigration et de l'Integration), holding training courses for the  repatriates wishing to find a worthy job or launch their business in  Armenia. The company also participated in the program on temporary  repatriation of compatriots with high professional qualification. The  program is funded by the Dutch Ministry of Foreign Affairs via IOM.  Along with this, Tanger is currently working with many higher  education institutions of Armenia, cooperating with their career  centers and graduates. 

Heruni notes that in 2016 the number of job-seekers' applications  dropped by 10.7% as compared to 2015, and the number of employers -  by 33%. Given the complicated situation related to employment, she  notes the Government's intention to ratify the European Convention  No. 181 (Private Employment Agencies Convention, under which private  employment agencies do not charge any fees from the employees fully  or partly - editor's note), which will result in closure or shadow  activities of private employment agencies. "This is a young sector in  Armenia and it should not be broken by legislative acts. One cannot  apply the prosperous European countries' laws to Armenia, because the  labor market in Armenia has its own specificity. But Europe sets its  requirements and the government tries to meet them blindly," she  stresses. "Today we provide not only recruitment services, but also  outsourcing, outstaffing, and other recruitment-related services,  which will allow us to retain our positions on the market even if the  European Convention is ratified, but I cannot say the same about  other private agencies," she says. In this regard, the expert pointed  at the data of the Republican Union of Employers of Armenia, which  says that some 800-1000 microbusinesses closed monthly in 2016. 

As regards the future of the national labor market, the expert points  at the outflow of population to Russia.  "But this year the republic  is holding elections. If people really caring for Armenia's fate come  to power, something may change. Otherwise, the situation will be  changing even for worse" she notes.   

To note, Tanger Recruitment Agency has been operating on the Armenian  market since 2001. It specializes in recruitment of middle and top  level managers, professional personnel in all sectors of economy,  selection of staff for foreign companies in Armenia, and also  provides outsources, outstaffing, outplacement and other services.   

According to the Central Bank of Armenia (CBA), in 2017 unemployment  in Armenia will make up 18.5%, with annual reduction by 0.3-0.4 pct  points to 18- 18.2% and 17.6-18% in 2018-2019, respectively. The  CBA's previous forecast made in November 2016 pointed out 18.3%  unemployment for 2017, and growth from 17.8% to 18.1% for 2016. The  updated (February) forecast is published in the CBA's monetary policy  program for Q1 2017, which says that the low demand for labor force  due to the low economy activity in 2016 will gradually recover in  2018-19 due to the acceleration of the economic growth. This, in  turn, will slowly increase employment.

To note, according to official statistics, unemployment in the  country made up 18.5% in 2015, 17.6% in 2014, 16.2% in 2013. In  Jan-Sept 2016, unemployment grew from 18.2% (in Q1) to 18.4% (in Q2),  and dropped to 18.1% (Q3).