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INTERNATIONAL
ECONOMICS
TATEVIK VARDANYAN
Lecturer of the Chair of International Economic Relations of Armenian State University of Economics © https://orcid.org/0000-0001-6488-2717
COMPREHENSIVE ANALYSIS OF THE MIGRATION SITUATION IN ARMENIA
The main characteristics of the modern world economy are the liberalization of economic processes, the increasing flows of capital, technology and people. In this case, the study of movement of people, problems and challenges of migration is more than relevant. In the modern world, the scale and inclusion of migration has led to the fact that questions about regulating and managing migration flows are regularly risen from various platforms, which have become a challenge for both the origin and destination countries. Migration issues in Armenia have always been relevant. The analysis of the migration situation gives an opportunity to reveal the deep reasons hindering the development of the economy in our country. The author assessed the migration situation in recent years, taking into account the demographic context of the problem.
Keyword: International migration, migration balance, border crossings, demographic situation
JEL: F22, J11
DOI: 10.52174/1829-0280_2021_6_150
Introduction. The 21st century can be described as a period of mobility, and one of its most important manifestations today is labor migration, which has been and remains an integral part of human development history. The spread of the COVID-19 pandemic in early 2020, the 44-day war unleashed by Azerbaijan (with the support of Turkey) against Artsakh and Armenia on September 27 (The Third
Artsakh War)1, the statement on November 11, the results of the early parliamentary elections, the infiltration of the Azerbaijani armed forces into the sovereign territory of the Republic of Armenia and the ongoing border tensions have created a new reality in the migration processes of Armenia. The scope of these processes and the possible development tendencies have become serious depopulation challenges for Armenia. If before the war the motives of the majority of migrants were a response to comprehensive socio-economic problems, now the migration processes in Armenia have received a more acute tone of security. On the other hand, the brain drain threatens Armenia's prospects of having an innovative, knowledge-based economy. The purpose of the research is to present the migration panorama of the country, analyzing the migration tendencies in pre-war and post-war Armenia.
Literature review. There is no common approach in the economic literature, according to which it will be possible to comprehensively introduce the term "migration". In general, it is quite difficult to define the concepts of "migration" and "migrant". D. Massey assesses that international migration is defined by unrelated theories, there is no comprehensive approach to it2. A number of economists cite "push" and "pull" factors as the main motivation for migration for people. In the case of push factors, the situation inside the country forces people to leave the homeland, and the pulling factors are presented in a more positive aspect3.
Neo Classical Theory of International Migration Explains the Impact of Labor Migration on Economic Development4. International migration is defined as a regional disproportion between labor supply and demand. L. Kurekova criticized this theory, noting that it does not take into account the imperfection of the market, and makes migration primitive5. This theory is based on wage differences between countries. Even if social, political, cultural and many other reasons for migration are ruled out, the theory does not take into account the fact that in real life migrants are not always fully informed about real wages and working conditions in the host country6.
The main tenets of The New Classical Theory have been denied by the New Economics of Labor Migration. The main novelty of this theory was that migration
1 The first Artsakh war in the 1990s, the second Artsakh war in April 2016, and the third Artsakh war in September-November 2020.
2 Wickramasinghe, A.A.I.N., Wimalaratana, W. (2016). International Migration and Migration Theories, A Journal for the Social Sciences, Vol.1. No.5, Sri Lanka, p. 14.
3 Gerber, J. (2014). International Economics, sixth edition, San Diego State University, by Pearson Education, Inc., p. 85.
Moon, B. (1995). Paradigms in Migration Research: Exploring 'Moorings' as a Schema, //Progress in Human Geography, V. 19, No4, p. 507.
4 Arango, J. (2000). Explaining migration: a critical view. International social science journal, 52(165), pp. 283-296
5 Kurekova, L. (2011). Theories of Migration: Conceptual Review and Empirical Testing in the Context of the EU East-West Flows, European University Institute, Badia Fiesolana, p. 5.
6 Skeldon, R. (2010). Managing Migration for Development: is Circular Migration the Answer? The Whitehead Journal of Diplomacy & International Relations, 11 (1), pp. 21-33.
shifted from the micro level to the meso level, where the main subjects are families, households and other associations.
M.J. Piore presented the Dual Labor Market Theory, which differed from the micro level models7. This theory removes international migration from the decision-making model of individuals and defines it as the result of the labor demand of industrialized societies. The shortcoming of the theory is that it tries to substantiate international migration only by the presence of pulling factors, while the coverage of migration is much broader and deeper.
Another theory, Migration System Theory, considers migration at the macro level8. At the micro level, friends' and family networks are discussed, and the macro level focuses on the economy, priorities, political systems, state migration policy, cultural and social systems. This theory defines the interconnectedness of migration and development. According to Hicks-Lindal, if there is a purely economic advantage in terms of increasing income, then the workforce will be inclined to move from one place of residence to another, more profitable place9. This definition completely covers the economic essence of migration, however, the existence of a purely economic advantage is not always sufficient to prevent migration.
Population migration also includes labor migration, but their goals are different. International labor migration is the movement of work-aged people to different countries in search of work, realizing their livelihoods and improving conditions10.
An interesting approach to the motivations of international labor migration is presented by Doctor of Economics, Professor H.Bagratyan in his "Mega economics and Global Economic Problems" book. In particular, at the beginning of the 21st century, 90% of the world's population has become literate, the economies of some countries will not be able to absorb this level of literacy. This led especially to the migration of young people to countries with a negative balance of labor resources 11.
To sum it up, there are many views, theories and approaches to international migration. However, they serve as a theoretical guide to assessing the impact of international labor migration on both individual countries and the global economy.
Research methodology. The theoretical, informational and methodological basis for the article are the works of Armenian and foreign economists, classical and modern economic theories of international migration, international conventions regulating the sphere of international migration, decisions, reports and strategic programs of Armenian state bodies, as well as reports of state and private
7 Piore, M. J. (1979). Birds of Passage. Migrant Labour and Industrial Societies. Cambridge University Press.
8 Kritz, M. M., Lim, L. L., Zlotnik, H. (1992). International migration systems: a global approach. Oxford: Clarendon Press; New York: Oxford University Press, 354 p.
9 Hiqs-Lindal, Kim S.J. (2010), Human Capital Flight: Impact of Migration on Income and Growth, International Monetary Fund Staff Papers, vol. 42(3).
10 Markosyan, A., Nazaryan, G., Hakhverdyan, D. (2012). International Economic Relations, Teaching Manual in two Parts, Part II, Yerevan, p. 151 (In Armenian).
11 Bagratyan, H.A. (2013). Mega-economics and global economic problems, Teaching and methodological manual, Yerevan, RUA Publication, 252 p. (In Russian).
organizations. The sources of information collection were the Statistical Committee of the Republic of Armenia, publications of international organizations such as the UN Economic and Social Council Statistical data etc.
In this paper, the author used quantitative research methodology. Alongside with quantitative methods, the author did statistical analysis to answer the research questions. Also, for a comprehensive understanding of the issue, statistical summarization, comparison, time series analysis methods, etc were used. There are two methods used by economic theory: the hypothetical-deductive method used principally by neoclassical economists, and the historical-deductive method adopted by classical and Keynesian economists. Both are legitimate, but, since economics is a substantive, not a methodological science, whose object is the economic system, the later method is more adequate. The hypothetical-deductive permits that the economist, starting from some basic assumptions - principally the maximizing agent, deduces a consistent and mathematical theory, but at the cost of realism and relevance. So in this reserach, the author also used the main idea of the hypothetical-deductive method.
Findings, analysis. In general, labor migration is a rather serious challenge for Armenia, where in the 30 years after independence there is mainly a negative balance. The population of Armenia shows a unique and interesting migration behavior. Many theorists and researchers have tried to explain and understand the main motivations behind this behavior. The analysis of the reasons for the migration behavior of the population of Armenia requires a rather systemic approach and, in general, it can be classified into two major groups: economic and non-economic motives. Until 2020, the migration panorama of the Republic of Armenia was completely different, mainly socio-economic view.
20 oa
=Yc'iith e= Papulation without Youth
Chart 1. Number of de jure population of the Republic of Armenia (excluding young people, thousand people), Number of young people (15-29 years old, thousand people), 1991-202012
12 Statistical Committee of RA, "Demographic Collection of Armenia" 2005-2018, "Social-Economic Situation in Armenia", 2000-2004, "Demographic Collection of Armenia, 2020"
The analysis of the demographic situation in Armenia shows that there is a serious crisis in this area in the country. In this case, there is a need to use "frontal attack" tools of the state policy against the demographic ""epidemic". The professor of Massachusetts Institute of Technology, Daron Acemoglu, considers the presence of the Armenian Diaspora a factor for the population of Armenia to leave the country easier. Also, he mentions that especially the migration of the youth is a terrible danger for Armenia13.
In order to substantiate the demographic problems in Armenia through migration processes, Chart 1 considers the number of de jure population of the RA without the youth, and the number of young people aged 15-29. It can be implied from Chart 1 that young people are the main target for migration processes. Annual growth of the total population (excluding young people) was
I.1% in 2011-2020. The average annual growth rate of the number of young people was -4.3%. In 2011-2020, the annual growth of the total population (excluding the youth) averaged 1.1%, and the average annual growth rate of the number of youths is -4.3%. The study of the population by separate age groups shows that in 2020 the population aged 10-14, 30-34, 80 and older increased by
II.3%, 17.7% and 32.6%, respectively, compared to 2011, while the number of young people aged 15-29 decreased by about 35.2%. From this we can conclude that the factor affecting the decrease of the de jure population of Armenia is the mechanical movement of the population or migration. In 2019, compared to 2012, the 15-49 age group (fertility age) made up 75.6% of emigrants (25-49 age group is 48.2%). In 2020, analyzing migration involvement of household members in Armenia by age group it should be mentioned that almost 84% of emigrants were in the 25-49 age group, which affected the aging of the population14.
According to ILCS 2020, 9.6% of households had members involved in internal and external migration over the period 2015-2020. Among households with members involved in external and internal migration flows over the considered period, as of 2020 17.6% were in internal migration between Yerevan and regions of Armenia, 13.5% - between the Republic of Artzakh, and 68.9% were in interstate migration, of which the overwhelming 72.1% majority were involved in migration flows with the Russian Federation. Main reason for migrating from Armenia was need to/ search for work (35.4% of total migrants). Family circumstances made 15.3% of migration flows15.
During the years of Armenia's independence, several large waves of migration were observed. The first wave was conditioned by the collapse of the USSR, First Nagorno-Karabakh War and the blockade in 1991-1994. During this period about 550 thousand people left Armenia. The next wave started in 2008
13 https://www.azatutyun.am/a/26933679.html
14 The Demographic Handbook of Armenia, 2021, Statistical Committee of The Republic of Armenia, p. 127, https://www.armstat.am/file/article/demog 2021 7.pdf
15 Ibid, p. 123.
and can be explained by global financial crisis. Although it is less massive than the previous period, but the number of people leaving Armenia is large, too16.
Chart 2. The migration balance of the population of the Republic of Armenia (thousand people), 1990-2020'7
5000 4000 3000 2000 1000
\ i
40 20
-20 -40 -60 -80
^§§§§§§§§§SSSSSSS5SS
io to N to oi Q
- " ~ " " S
I l Arrived ^MDepartured -Balance
Chart 3. Border crossings in Armenia in 1999-2020, (thousand people)18
The official data of the RA Statistical Committee prove that the migration balance in 1999-2009 shows a mainly positive direction, which can be conditioned by the economic growth indicators in Armenia in those years. Stable economic growth was registered in the Republic of Armenia during the early 2000s, which led to a significant reduction in poverty. Prior to the crisis, sustained economic growth ensured Armenia's transition to a group of middle-income countries. Economic growth has led to a stabilization of employment, an increase in real wages, and an increase in expenditures from the consolidated budget to the social sectors. All this, together with the growing inflows of private remittances, contributed to a significant reduction in poverty. However, in 2008,
16 Mikayelyan, H., External migration in Armenia. trends, directions, number, http://www.noravank.am/arm/articles/detail.php7ELEMENT ID=6836#19 b (In Armenian).
17 Statistical Committee of RA, "Demographic Collection of Armenia" 2005-2018, "Social-Economic Situation in Armenia", 2000-2004, "Demographic Collection of Armenia, 2020"
18 The data for 1990-1999 are taken from the General Department of Civil Aviation under the Government of the Republic of Armenia, and the data for 2000-2020 are taken from the official website of the Migration Service http://www.migration.am/statistics
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the global economic crisis hit the Armenian economy. In 2009, there was a 14.1% decline in real GDP, followed by a slow recovery in 2010 (in 2010, GDP growth was 2.2% over the previous year, in 2011 it was 4.7%)19.
However, it should be noted that migration statistics in Armenia are quite problematic. In particular, according to former RA Prime Minister Hrant Bagratyan, 400,000 people from Azerbaijan arrived in Armenia in 1989-1991, but their entry was not registered in the USSR due to the lack of border services. At the same time, 340-400 thousand Armenian citizens left for the United States and Russia which was registered. As a result, it turns out that instead of 1022 thousand people 682 thousand Armenian citizens left the country during that period. The migration process in Armenia was influenced by the war between Ukraine and Russia in 2014 and the subsequent events. According to Russia's position, Crimea and Sevastopol became subjects of the Russian Federation on March 18, 2014, which resulted in economic sanctions against Russia. This is why in 2014, 50% or 114 people seeking asylum in Armenia had Ukrainian citizenship20. Besides, according to the data of the Migration Service of the Ministry of Territorial Administration and Infrastructure of the RA, borders crossings by the country of citizenship show that in 2012 the balance of border crossings of Ukrainian citizens in Armenia was 109 people, in 2014 688 people21.
1999-2017, the number of arrivals in Armenia exceeded the number of departures only in 2004-2006, which is again explained by the activation of the Armenian economy. In 2007 during the pre-crisis period, the annual growth rates of emigration have been more pronounced. As the side effect of the crisis, emigration to the country continued to grow, with the country's population approaching the 3 million people. Apart from economic reasons, the political reasons can also be distinguished during these years: problems related to the establishment of democratic institutions in Armenia, Armenia-Azerbaijan, Armenia-Turkey political contradictions. And the Armenian-Azerbaijani military clashes directly or indirectly affect the movement of the population.
A positive balance of border crossings has been registered since 2018 during the observed period. At the same time, the study of the dynamics of border crossings by citizenship shows that in 2018, compared to the previous year, the number of border crossings of Russian citizens increased by 17% (684014 people), and the number of exits increased by 16.2%. The balance of border crossings of Russian citizens has more than doubled. The analysis of the dynamics of the border crossings of the citizens of Armenia shows that in 2017 the number of border crossings of the citizens of Armenia is -36201 people, and in 2018 -4585 people. All this can be explained by the positive expectations of
19 Poverty in Armenia in 2008-2015, Part 1. Statistical Committee of RA, p. 30 https://www.armstat.am/file/article/poverty 2016a 2.pdf (In Armenian).
20 Statistical Committee of RA, "Demographic Collection of Armenia", 2014, p. 110. https://www.armstat.am/file/article/demog 2015 7.pdf
21 Number of RA border crossings in 2014, Statistical Report, RA Ministry of Territorial Administration and Infrastructure, Migration Service of Armenia http://migration.am/content/pdf/Boundaries 2014.pdf (In Armenian)
people after events of 2018. During 2018-2019, the number of border crossings of Indian citizens entering Armenia has also increased unprecedentedly. Thus, for example, in 2018, compared to the previous year, the number of border crossings of Indian citizens increased by 169.3% (in 2018 - 31,213 people), and in 2019 by 24.1%. The number of Indian citizens who received RA residence status in 2017 compared to 2018 increased by 118.8%22. 98.6% of Indians in 2018 received temporary residence status for study purposes. However, in parallel with their studies, they are also involved in the Armenian labor market, especially in low-skilled jobs, particularly in the construction sector. The increase in the number of Indians who have received residency status in Armenia is conditioned by the prospects of getting cheap, quality medical education in Armenia. It also can be explained by visa policy changes with India in 201723, which have made visa procedures in Armenia much easier for Indian citizens.
The sharp deterioration of the socio-economic and migration situation in Armenia was registered at the beginning of 2020, when the COVID-19 coronavirus pandemic spread all over the world, including Armenia. The key issue of emigration in Armenia is seasonal migration, which has made the situation of migrants more difficult, as most of the restrictions were introduced in the world in early March and June, when the main flows of emigration always happen. In fact, at the moment it is extremely difficult to assess the impact that the COVID-19 coronavirus will have on migration processes in Armenia, as everything is still ongoing. COVID-19 has come to prove that migration trends can change, they can be reversed, but human mobility is inevitable in any situation, even the most horrible. They say that migration will never be the same again. At the same time, in addition to the challenges of COVID-19, The Third Artsakh War and the subsequent November 11 statement happened24, which led to a depressive atmosphere among the population in the country. As a result, the overall migration profile of Armenia has considerably changed. The problems of refugees forcibly displaced by Azerbaijan from the occupied territories of Artsakh should become the cornerstone of Armenia's migration policy at the moment. The social assistance programs for the displaced, their full integration into society and, most importantly, job security are issues of key importance for the Government of the Republic of Armenia. On the other hand, it is necessary to have a balanced "supportive" policy for those migrants who are currently in Armenia due to various restrictions and are unable to have an income.
Situational analysis of migration flows from Armenia was also carried out on the basis of statistical data of the UN Economic and Social Council. The analysis shows that both the gender composition of international migrants and the choice of destination countries have undergone significant changes during 1990-2020. The number of permanent residents of Armenia has been decreasing in 19902020, and the number of international migrants leaving Armenia has been
22 http://www.migration.am/statistics
23 Decision of the Government of the Republic of Armenia N 103-N of February 9, 2017 "On Making Amendments to the Decision N 329-N of the Government of the Republic of Armenia of April 4, 2008" (In Armenian).
24 https://www.primeminister.am/hy/press-release/item/2020/11/10/Announcement/
increasing. The average share of men among international migrants averaged 52.6%. Moreover, the share of women among international migrants leaving Armenia decreased by 5 percentage points in 2020 (46.4%) compared to 51.4% in 199025. Migration processes observed in Armenia also affected the population aging rate, which was 91% in 2019 instead of 32.4% in 199026.
Conclusions. In conclusion, the analysis of the trends of statistical indicators reveals that direct signals are sent to the state bodies developing migration policy for the development of more flexible and practical mechanisms in Armenia. The issue is on the agenda, especially for young people of reproductive age. In this era of information technology development, young people with professional knowledge and skills will not tolerate the long transition from university to the labor market or the lack of decent work because of the chronic imbalance in the supply and demand of the Armenian labor market.
The COVID-19 coronavirus crisis of 2020 also hit the Armenian economy, when the state of emergency was declared in the country on March 16, 2020. The health crisis has become a serious challenge for any country in the world, as well as for Armenia, where both the volume of trade and the inflow of remittances, the source of which is labor migration, have been significantly reduced.
At the moment, when the COVID-19 pandemic is combined with the horrible consequences of The Third Artsakh War, as well as the post-war situation on the borders of Armenia, it is almost impossible to assess how the further migration processes will develop, what volumes they may include. But it is necessary to prepare all the state infrastructures for the worst-case scenarios.
References
1. Decision of the Government of the Republic of Armenia N 103-N of February 9, 2017 "On Making Amendments to the Decision N 329-N of the Government of the Republic of Armenia of April 4, 2008" (In Armenian).
2. Decision of the Government of the Republic of Armenia N 1435-N of February 9, 2017 "On Making Amendments to the Decision N 329-N of the Government of the Republic of Armenia of April 4, 2008" (In Armenian).
3. Mikayelyan, H., External migration in Armenia. trends, directions, number,
http://www.noravank.am/arm/articles/detail.php7ELEMENT ID=6836 #19 b (In Armenian).
4. Poverty in Armenia in 2008-2015, Part 1. Statistical Committee of RA, p. 30 https://www.armstat.am/file/article/poverty 2016a 2.pdf (In Armenian).
25 UN Economic and Social Council Statistical data, http://www.un.org/en/development/desa/population/migration/data/estimates2/estimates17.shtml
26 Statistical Committee of RA, "Demographic Collection of Armenia", 2020, p. 47, https://www.armstat.am/file/article/demog 2020 2.pdf
5. Markosyan, A., Nazaryan, G., Hakhverdyan, D. (2012). International Economic Relations, Teaching Manual in two Parts, Part II, Yerevan, 640 p. (In Armenian).
6. Bagratyan, H.A. (2013). Mega-economics and global economic problems, Teaching and methodological manual, Yerevan, RUA Publication, 252 p. (In Russian).
7. Arango, J. (2000). Explaining migration: a critical view. International social science journal, 52(165), pp. 283-296
8. Gerber, J. (2014). International Economics, sixth edition, San Diego State University, by Pearson Education, Inc., 504 pages.
9. Hiqs-Lindal, Kim, S.J. (2010). Human Capital Flight: Impact of Migration on Income and Growth, International Monetary Fund Staff Papers, vol. 42(3).
10. Kritz, M. M., Lim, L. L., Zlotnik, H. (1992). International migration systems: a global approach. Oxford: Clarendon Press; New York: Oxford University Press, 354 p.
11. Kurekova, L. (2011). Theories of Migration: Conceptual Review and Empirical Testing in the Context of the EU East-West Flows, European University Institute, Badia Fiesolana, 25 pages.
12. Moon, B. (1995). Paradigms in Migration Research: Exploring 'Moorings' as a Schema, //Progress in Human Geography, V. 19, No4, pp. 504-524.
13. Piore, M. J. (1979). Birds of Passage. Migrant Labour and Industrial Societies. Cambridge University Press.
14. Skeldon, R. (2010). Managing Migration for Development: is Circular Migration the Answer? The Whitehead Journal of Diplomacy & International Relations, 11(1), pp. 21-33.
15. Statistical Committee of RA, "Demographic Collection of Armenia" 2005-2018, "Social-Economic Situation in Armenia", 2000-2004, "Demographic Collection of Armenia, 2020"
16. Statistical Committee of RA, "Demographic Collection of Armenia", 2014, p. 110 https://www.armstat.am/file/article/demog 2015 7.pdf
17. The Demographic Handbook of Armenia, 2021, Statistical Committee of The Republic of Armenia, p. 127, https://www.armstat.am/file/article/demog 2021 7.pdf
18. Wickramasinghe, A.A.I.N., Wimalaratana, W(2016). International Migration and Migration Theories, A Journal for the Social Sciences, Vol.1 No.5, Sri Lanka, 13-32 pages.
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РО!: 10.52174/1829-0280_2021_6_150 ТАТЕВИК ВАРДАНЯН
Преподаватель кафедры международных экономических отношений Армянского государственного экономического университета
Комплексный анализ миграционной ситуации в Армении.- Основными характеристиками современной мировой экономики являются либерализация экономических процессов, увеличение потоков капитала, технологий и людей. В данном контексте изучение передвижения людей, проблем и вызовов миграции более чем актуально. В современном мире масштабы миграции привели к тому, что вопросы о регулировании и управлении миграционными потоками регулярно озвучиваются с различных платформ, что стало проблемой как для стран происхождения, так и для стран назначения.
Проблемы миграции в Армении всегда были актуальны. Анализ миграционной ситуации дает возможность выявить глубинные причины, сдерживающие развитие экономики в нашей стране. Автором статьи проведена оценка миграционной ситуации в последние годы с учетом демографического контекста проблемы.
Ключевые слова: международная миграция, миграционный баланс, пограничные переходы, демографическая ситуация 1Е1_: Б22, 111
РО!: 10.52174/1829-0280_2021_6_150
