By Atom Markarian
The amount of cash sent home by Armenians working abroad -- the main source of hard currency for their economically struggling country -- is on track to grow by nearly 20 percent this year, a senior finance official said on Wednesday.
Tigran Sarkisian, chairman of Armenia’s Central Bank, said their estimated total is likely hover between $450 million and $500 million, a figure close to the nation’s state budget and trade deficit in 2002. Russia and other large former Soviet republics continue to account for most of the remittances increasingly handled by local commercial banks, he added.
Ever since the post-Soviet economic collapse plunged Armenia into poverty in the early 1990s the cash transfers have been the principal source of income for tens of thousands of Armenian families whose main bread-winners went abroad in search of employment. Most of them now work, both legally and illegally, in Russia and the United States.
Their money plays a crucial role in mitigating Armenia’s huge trade and current account deficits. The country’s net imports, for instance, were worth twice as much as its exports in the first half of this year, resulting in a trade gap of about $300 million.
Incidentally, Sarkisian was speaking at the official opening of a new Yerevan head office of Areximbank, one of several Armenian banks for which the remittances are a key source of earnings. Areximbank, which is owned by wealthy Russian-based Armenians, has already processed more than $60 million worth of hard currency payments from Russia in 2003.
According to the Central Bank chief, commissions charged for such services have considerably dropped in recent years as a result of growing competition among the local banks specializing in the business. “It is the bank clients that mainly benefit from that competition,” he said.