King Banaian

The elections forthcoming this month provide Armenia with a remarkable opportunity to renew the economic transition that began six years ago. In some ways Armenia has proved itself resilient: its decline in living standards was one of the sharpest in transition (from 1990 levels output fell by almost two-thirds by 1994) and the depreciation of the savings of its citizens one of the largest. While it has displayed high growth rates since then, these come from a very low base....

King Banaian Less than a year ago, Armenia’s stabilization was being lauded from all sides as a great triumph. GDP expanded for two years straight; inflation fell to a western standard of 5.7% in 1996, and real incomes were beginning to grow again. Its growth rate was faster than any other CIS country, and that inflation figure for 1996 beat even the well-cheered performance of the Baltic states. The international arbiters of macroeconomic excellence, the International Monetary Fund, however, sounded a worried note while releasing the second tranche of Armenia’s $47 million-a-year ESAF loan:...