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17ARMENIA
Astghik Mirzakhanyan has a PhD in Economics, and is a specialist with extensive professional experience of working with ministries, and inter-governmental and international organizations in the areas of Social Policy and Statistics, Poverty Assessment and Monitoring, Household Surveys and Socioeconomic Studies and Analysis. Astghik currently works as the Head of the Social Affairs Department of the Government of the Republic of Armenia, dealing with social protection and social security, human development and public social services issues.
WOMEN AND SUSTAINABLE RURAL DEVELOPMENT
There are more women than men within the Armenian population and in 2015, women represented 52.2 percent of the total population.1 However, Armenia ranked in the bottom five countries in the world in the Health and Survival subindex (2014)2 because of its low female-to-male sex ratio at birth score (100/114). This has prompted intense debate among experts about the issue of selective abortion in the country.3 The distribution of women by age is as follows: women below working age (0-15 years) account for 46.6 percent of this sub group of the population; working-age women (16-62 years) for 52.5 percent; and women above working age (63+ years) for 59.8 percent (2015).4 Conclusion: while women are an important resource in Armenia's economic development, they are also the main beneficiaries of the social protection system (in particular, the pension system).
The Armenian population is predominantly urban: 73.5 percent of all residents live in urban areas and 36.5 percent in rural areas (2015). In urban areas, women account for 53.3 percent of the population. Both working-age urban women and urban women above working age outnumber men in these groups, accounting for 54.6 percent and 59.2 percent respectively. In rural areas, women account for 50.3 percent of the population. Furthermore, there are more working-age women and women above working age in rural areas than men: 50.2 percent and 60.2 percent respectively. Conclusion: there are relatively fewer female workers and relatively more women of retirement age in rural areas when compared with urban areas.
In recent years, one of the main changes in Armenian demography has been the rapid decline of fertility in rural areas. Traditionally, rural fertility rates were high when compared with urban areas. In the period 2011 to 2015, rural fertility rates fell to below those of urban areas.5
Experts say that these trends are mainly related to unfavourable social conditions in rural areas, rather than a result of the economic situation. All indicators of material poverty are lower among rural households than urban households, especially when compared with households in small towns: for example, in 2014, 2 percent of the rural population was extremely poor, while in urban areas it was 2.4 percent and in small towns 2.9 percent. The same situation is observed in relation to the very poor (10.4 percent, 11.2 percent and 13.6 percent respectively); and poor (29.9 percent, 30.0 percent and 35.1 percent).6 The lower levels of rural poverty are a significant feature of the social situation in Armenia. In most other countries across the world, the rural population is poorer than the population in urban areas.
1 National Statistical Service of the Republic of Armenia, 2015a.
2 World Economic Forum, 2014.
3 Guilmoto, 2013.
4 National Statistical Service of the Republic of Armenia, 2015b.
5 The last time this situation was observed in Armenia was in the post-war period (1945-47). In 2011, fertility rates (number of births per 1 000 population) in rural and urban areas of Armenia were 14.2 and 14.4 respectively; in 2012 - 13.8 and 14.2; in 2013 - 13.6 and 14.0; and in 2014 - 13.8 and 14.6. Source: National Statistical Service of the Republic of Armenia, 2015b.
6 Trends in the poverty ratio for urban/rural areas have not changed since 1996. Source: National Statistical Service of RA and the World Bank, 2015.
One explanation for this phenomenon can be found in the land reform of 1992. After the declaration of independence, collective and state farms and small household plots were privatized.7 In turn, this produced three other consequences. The first is the structure of GDP in Armenia: agriculture (including forestry and fisheries) represents 18.5 percent of GDP (2014), which is higher than industry (16.2 percent) and construction (9.2 percent). Moreover, more than one-third of industrial products are produced by the food sector (36.4 percent), which is characterized by a high number of agricultural cooperatives, farms and small businesses located in rural areas.8 The second factor is the relatively high level of economic activity within the rural population, which is almost 10 percentage points higher than that of the urban population, 69.2 percent and 59.6 percent respectively. The gap is the highest in the age groups 65-69 years - 35.4 percentage points; and 70-75 years - 43.5 percentage points. The third factor which has a positive effect on the level of rural poverty is tax relief provided to agricultural workers: those employed in agriculture are fully exempt from income tax, and the sale of agricultural products is exempt from VAT. This explains the high employment rate in agriculture: 34.8 percent of all employed persons in Armenia work in agriculture (which is the largest sector of employment after the services sector). Moreover, statistical data shows that employment in agriculture is a more attractive option for women than men: 40 percent of all employed women and 30 percent of all employed men in Armenia work in agriculture. At the same time, women make up 55.7 percent of all those employed in agriculture (2014).9
While the Armenian government recognizes the importance of the agricultural sector for the country in general, it places particular emphasis on the sector's role in the livelihoods of communities bordering with neighbouring countries. Consequently, as of 01 January 2015, the Law "On Tax Exemption for Activities Carried out in Rural Border Communities', adopted by the National Assembly in 2014, states that residents of 30 rural communities and one urban community, as well as entrepreneurs who have business in these communities, are exempt from the turnover tax, income tax and from payment of state duties for licenses. More than 50 000 mostly rural residents of these communities (or every 20th rural resident of the country) have become beneficiaries of this policy.
The Ministry of Labor and Social Affairs developed a special programme of social protection for vulnerable rural population groups, which was launched in early 2014.10 This programme targets residents in two types of rural areas: a) villages which have been affected by natural disasters (for example, hail, floods, mudslides, drought and loss of livestock due to epidemics); and b) mountain villages and border villages. The beneficiaries of the programme must be land users, and they can be both owners and tenants of land. The main condition for participation in the programme is registration in the local employment service as a job seeker. If other family members (aged 16-63 years) want to participate in the programme, they must also be registered as job seekers. If a family requires employees for rural work, it must sign a labour agreement with them, in accordance with the format developed by the Ministry. The duration of each mini-programme for families is set at 180 calendar days. The payment is: a) 4 000 AMD per day for the main land user and the same amount for each member of the family; b) 3 000 AMD per day for an employee; and c)
5 000 AMD per hour for an employee who is using farm machinery (for example, a tractor or combine harvester). All of the amounts listed include taxes and social payments. The cost of one mini-programme cannot exceed 350 000 AMD. According to information provided by the Ministry,
6 285 people participated in the programme in 2015 and 37.1 percent of these participants were women. The total programme budget amounted to almost 840 million AMD.
While the aforementioned programme is designed for vulnerable groups of the rural population, the programme discussed below is aimed at one of the most competitive groups in the Armenian female population - both urban and rural. The title of the programme is: "Development of Female Entrepreneurship in Armenia'! The first phase of the programme was delivered between 2013 and 2015. It is implemented by the Small and Medium Entrepreneurship Development National Center (SME DNC) of the Ministry of Economy. The programme is financed by the Asian Development Bank (ADB); and the main partners are the German company PEM Consult and the Universal Credit Company of Armenia. The total amount of credit resources is 20 million dollars and beneficiaries must meet the following conditions:
7 The process of land privatization in Armenia is described in detail in Lermann & Mirzakhanian, 2001.
8 National Statistical Service of the Republic of Armenia, 2015c.
9 National Statistical Service of the Republic of Armenia, 2015d.
10 The Decision of the RA Government, N534, 17 April 2014.
O The business must be "female',' which is defined by the following criteria:
• 60 percent of senior management must be represented by women, or;
• more than 50 percent of property must be owned by women, or;
• more than 50 percent of staff must be represented by women.
O The business must be small or medium, which is defined by the following criteria:
• a micro business with fewer than 10 employees and less than 100 million AMD annual turnover;
• a small business with fewer than 50 employees and less than 500 million AMD annual turnover;
• an average business with fewer than 250 employees and less than 1 500 million AMD annual turnover.11 O Loans are provided by selected commercial banks, in which the financial resources of ADB are allocated; O The annual interest rate is 10 percent for starting businesses and up to 14 percent for existing businesses; O The duration of the loan period is up to five years;
O The SME DNC provides loan guarantees, which are annually reserved in the state budget of the RA in a separate line item, "Provision of guarantees by the Small and Medium Entrepreneurship Development National Center (SME DNC) for obtaining commercial loans";
O The amount of the state guarantee for a loan does not exceed 7 million AMD12 for starting entrepreneurs and 15 million AMD for existing businesses.
The Ministry of Economy estimates that in 2015 there were 5 363 women beneficiaries of the aforementioned programme; 164 of these beneficiaries were female starting entrepreneurs in the 10 provinces (marzer) of Armenia. In total, 23 programmes were implemented in 2015, including four programmes in Yerevan, three of which were intended for Syrian refugees. Fifty-nine female entrepreneurs received preferential loans amounting to 260 million AMD from commercial banks under SME DNC guarantee letters. By 01 December 2015, commercial banks had issued almost 600 credits under state guarantees representing a total amount of 1.85 billion AMD.
In 2010, with the support of Oxfam International, the programme for rural families was launched to support agricultural cooperatives with the preferential involvement of female labour. This programme has been implemented in the two provinces of Tavush and Vayots Dzor (where the rural population is 57.7 percent and 64.9 percent respectively of the total provincial populations). In the period between 2010 and 2015, 25 cooperatives were established, including eight with 100 percent female participation (including directors). Overall, the total number of cooperative members reached 300 and 54 percent of these were female.
Although Armenia has a wealth of female resources, the country does not currently fully utilize this potential. Moreover, as women aged between 18 and 30 years become more economically active, birth rates fall sharply, especially in relation to third and subsequent children, which in turn affects the demographic situation in the country. One of the main problems faced by the country is the "loss" of the village as the main "provider of human resources". A number of measures introduced by the government of Armenia have slightly improved the birth rate13, but the problem of population decline is still relevant.
A second serious challenge is the very low participation of women in local self-government. In Armenia, there are currently 866 rural governments with 6 006 communal employees, and 48.6 percent of these employees are women. Despite the high numbers of women employed in local authorities, very few of them hold management positions or are represented in elected posts.
Today, only 17 women (2 percent) head rural communities, and only 515 women (9.9 percent) are elected to rural councils.14 In terms of the political empowerment of women, Armenia occupies the 123rd position among 142 countries, which also has a negative impact on the country's position in the Global Gender Index (103).15
11 The Ministry of Economy estimates that in 2014, 98 percent of all registered enterprises fit that definition. "Female" SMEs amounted to 8 871 or 11-12 percent of all small businesses. The SME sector in Armenia employs 290 000 people and its contribution to GDP is estimated to be approximately 44 percent.
12 Before 2015, it was 5 million AMD and since 2016, it has been 7 million AMD.
13 In order to improve the birth rate, the following key measures were taken by the government. Firstly, in 2011, state childbirth certificates were introduced. These were provided to all pregnant women and gave them the right to give birth in any chosen medical institution, including private establishments, free of charge. Secondly, in 2012, children under seven years were included in the state programme of free inpatient treatment, regardless of their social status and type of disease. Thirdly, in 2014, the state parent capital programme was launched. If families received 50 000 AMD for the births of their first and second children, they will now receive 500 000 AMD (in cash) for the birth of the third child, in addition to an extra 500 000 AMD transferred to a bank account as parent capital. For the fourth and subsequent children, parent capital is 1 million AMD. As of January 2016, non-working mothers also receive maternity leave of 140 days (70 days of prenatal and 70 days of postnatal leave). The amount is based on the minimum wage, set annually by the RA National Assembly (this is currently 55 000 AMD).
14 GIZ, EU & UNDP, 2015.
15 World Economic Forum, 2014.
Furthermore, public opinion suggests that the most urgent problem in Armenia today is the
availability of medical services, especially those using high-tech equipment and modern methods of treatment. As a solution to this problem, the government and other stakeholders have been discussing the introduction of universal compulsory medical insurance. This possibility raises many challenges, including: the introduction of a unified database in the health system; the development and electronic preservation of treatment protocols; the training of personnel; the provision of technical equipment in medical institutions, polyclinics and clinics; and personal data protection.
Another urgent problem for sustainable agricultural development is the rural population's limited access to the state pension system. Rural residents do not pay income tax on self-employment. Of all employed persons in rural areas, 83 percent are self-employed (defined by official statistics as people belonging to the informal sector because of a lack of information about their income). Across the country, the rural population accounts for 68 percent of all people engaged in informal employment. Moreover, the agricultural sector absorbs about 72 percent of all informal jobs, and women make up 55 percent of them. This means that about 250 000 rural women employed in the informal sector (non-taxable) will encounter pension eligibility problems in retirement.
Another significant challenge for rural development is the migration of the male labour force for seasonal work, mainly to Russia and other CIS countries. The Migration Service of Armenia estimates that there are between 100 000 and 120 000 labour migrants annually. Migration is a sensitive topic in the Armenian public sphere and a primary focus for researchers and politicians. Numerous household surveys and omnibus surveys of citizens suggest that the absence of men in many villages is disastrous for the villages' development, both socially (for example, incomplete families, fatherlessness and a sharp reduction in the numbers of socio-cultural events) and economically (for example, weak economic incentives and a lack of workers for the community).
Finally, another critical problem in Armenia is the prevalence of small (even micro) villages which have little potential for survival. Out of 866 rural communities in Armenia, 272 or 31 percent have a permanent population of less than 500 people. Intensive migration of the male population from these villages means that in some places, only 10 to 15 families remain, consisting mainly of women, children and the elderly. One strategic policy designed to resolve this problem is the administrative and territorial consolidation of communities. In 2015, for the first time, 23 rural and 2 urban communities in three provinces were merged into three new major administrative units. The establishment of another 12 enlarged communities is planned. Using a joint budget, the new units will have more abilities to address social issues such as the maintenance of schools and kindergartens, the renovation of rural roads and the promotion of local business.
References
GIZ, EU & UNDP. 2015. Participatory Democracy in Local Self-Government. Yerevan, Armenia.
Guilmoto, C. Z. 2013. Sex Imbalances at Birth in Armenia: Demographic Evidence and Analysis. Yerevan, UNFPA. (available at http://www.unfpa.am/sites/default/files/Sex Imbalance report Eng final-with%20cover-final.pdf).
Lermann, Z. & Mirzakhanian, A. 2001. Private Agriculture in Armenia.
National Statistical Service of the Republic of Armenia. 2015a. Population. The Demographic Handbook of Armenia. (available at http://www.armstat.am/file/article/demog 2015 2.pdf).
National Statistical Service of the Republic of Armenia. 2015b. The Demographic Handbook of Armenia. (available at http://www.armstat.am/file/article/demog 2015 00.pdf).
National Statistical Service of the Republic of Armenia. 2015c. Statistical Yearbook of Armenia. (available at http://www.armstat.am/file/doc/99493648.pdf).
National Statistical Service of the Republic of Armenia. 2015d. Labour Market in the Republic of Armenia, 2010-2014. Yerevan. (available at http://www.armstat.am/file/article/trud 2015 6.pdf).
National Statistical Service of RA and the World Bank. 2015. Social Snapshot and Poverty in Armenia: Statistical Analytical Report. Yerevan. (available at http://www.armstat.am/file/article/1.poverty-2015e 00.pdf).
World Economic Forum. 2014. The Global Gender Gap Report, October 2014. (available at http://www3. weforum.org/docs/GGGR14/GGGR CompleteReport 2014.pdf).
