Vital cash remittances sent home by scores of Armenians working in Russia and other countries increased by over 23 percent in the first ten months of this year, according to official statistics released on Wednesday.
Data from the Central Bank of Armenia (CBA) shows that local commercial banks processed almost $1.24 billion in non-commercial cash transfers from abroad, up from just over $1 billion in the same period of last year.
The total amount of incoming wire transfers, which includes funding for business transactions, reached $1.56 billion. It stood at $1.27 billion in January-October 2010.
More than 80 percent of these cash inflows came from Russia, which is home to hundreds of thousands of Armenian migrant workers. The United States, which also has a sizable Armenian immigrant population, accounted for roughly 5 percent of the total.
The remittances have long been a major source of income for a considerable part of Armenia’s population. A rapid rise in their volume in the early 2000s contributed to a double-digit growth of the Armenian economy, which came to an end with the outbreak of the global recession in late 2008.
Economic growth in the country resumed in 2010, helped an almost 14 percent rise in remittances. According to the CBA, they totaled $1.3 billion, equivalent to over 13 percent of Gross Domestic Product. The sharper rise in 2011 remittances is one of the reasons why growth is on course to exceed 4 percent this year.
Armenia’s heavy dependence on the cash transfers also makes it vulnerable to a renewed economic crisis around the world and in Russia in particular. Moody’s Investors Service, a credit ratings agency, emphasized this fact as it lowered its outlook for the Armenian economy late last month. It warned that an economic slowdown in Russia resulting from a drop in global commodity prices could seriously cut the Armenian remittances.
Residents of rural areas of the country, where unemployment rates have been above the nationwide average, are particularly reliant on financial support from their family members working abroad. Frunz Ohanian, an elderly farmer in Geghanist village in southern Ararat province, and his wife Satenik are one such family. They have for years lived off money wired by their older son who migrated to Russia a decade ago.
“Last month he sent a lot of money so we can meet our basic needs,” Frunz Ohanian told RFE/RL’s Armenian service (Azatutyun.am) on Wednesday.
Ohanian said he still hopes that his son, daughter-in-law and four granddaughters will eventually return home. “If the situation improves, if there are jobs, of course they will come back,” he said. “I don’t doubt it.”