Bread-winning people out of remittances

27/11/2010 Babken TUNYAN

Yesterday one of the online sources released quite interesting news. It turns out that every 5th American suffers from mental and psychological malfunctioning and according to the scientists the main reason of that is the financial crisis, economic instability and its consequences. The survey was conducted by the order of the US government. In Armenia as we know the government has never conducted such a survey. If the financial issues can cause certain misbalance among people then such a survey would be useful for us.

However Armenians are a strong nation. They get depressed not that easily and under any circumstance they manage their finances without even realizing how. This sounds like the famous anecdote. “I was walking alone in the desert and then behind the hill the lion jumped out. I ran and climbed the tree…” “Wait a second,” interrupts the friend, “there cannot be a tree in the desert.” “Brother, when the time comes you don’t pay attention whether there is a tree or not, u just climb it.” Our situation is similar to this joke. While Americans or Europeans appear in depression because of sudden financial turbulence the Armenians start to “climb the tree.” And this often looks like a miracle for the ones, who conduct surveys. Armenians enter into the phase of economic mode and start to struggle. By the way, the official statistics also comes to prove this. Thus the official statistics have released three days ago a report on Grocery Safety and Poverty for January-September 2010, where we can see quite interesting facts. This table shows that during the crisis year one household (family) each family has reduced its expenses by 4000 AMD monthly by spending 104.398 AMD per month. Of course these are only official data but in order to make a general picture of the actual situation we may rely on these data. We see that the family has reduced its expenses by 2200 AMD at the expense of the meat products. They also consumed little non-purchasable food (e.g. cheese and milk sent from the relatives from the village). The non-grocery items also entered the saving mode. So did the public food (for example, eating in a restaurant or visiting a café). Instead the expenses of purchasing cigarettes and alcohol have slightly increased and services (such as phone bill and internet). We can immediately assume that the man of the family because of the lack of money has started to drink and smoke a little more. And perhaps in front of the computer he was looking for a job online. Apart from the joke everything is much more serious and sadder. The level of consumption expenditures has reduced by 4500 AMD. But if we take into account the 6.5% inflation then it turns out that last year an average Armenian family has much more reduced its consumption. Nevertheless, despite the difficulties, no one went mad and the New Year tables were still looking fancy as in the previous pre-crisis years. This year we will also have some lack of pork leg and salads on the tables despite the fact that the economy has grown by 2% (it means that we are virtually in the crisis period) and inflation exceeds 9%. Then what is the secret? Where do Armenian get their money? From what sources do the funds come? In its report the NSS also tried to answer this question. Thus, in 2009 the average income of each member of a family amounted to 28.038 AMD a month. And 54.7% (almost 15.328 AMD) of this amount is accumulated due to hired service. According to the statisticians the next important source of income is the pensions and subsidies – 20% (5615 AMD). The remittances amounted to 9.5% of the total income and occupation is 5.5%. Let us mention that the occupation/employment incomes have drastically reduced compared to 2008 by reaching 1534 from the previous 2385 AMD. 5.9% of incomes were provided due to the sale of agricultural products and animals and the incomes originated from property (rental, leasing, sale and interest rates) amounted to only 0.1%. There is also the “other incomes” line in the table. In 2003 at the expense of other incomes 4.3% of total incomes were accumulated. The interesting thing is that compared to 2008 the so-called other incomes grew almost twice. In our country hardly anyone can believe that a family can live with only 108.000 AMD a month. And only the ones, who form this other income, can answer the question how this other income is derived. And the response usually is, “I needed it very much, so I was able to get it. I couldn’t leave my family hungry.” So this is so similar to our joke, when the lion attacks you don’t pay attention whether there is a tree or not, you just climb.