Institute for War and Peace Reporting | Giving Voice, Driving Change

Armenia: Unemployment Crisis

The authorities' failure to register "hidden unemployment" appears to make a mockery of official jobless figures.
By Peter Magdashian

On paper, Artashes Khachatrian is a well-qualified engineer with a good job, but his factory stopped working long ago. He is one of Armenia's army of hidden unemployed.


Khachatrian, 54, used to work as a senior engineer in Yerevan's machine-tool factory. As the Soviet Union broke up, its products lost their markets and he effectively lost his job. Yet although Khachatrian has not gone to work for seven years, he is not officially jobless because he is still registered as an employee of the factory.


"All this time I have not been able to find work in my specialist field," said Khachatrian, who is married with two children at university. "I wasn't especially hopeful since the factories in Armenia are mainly standing idle. I tried various jobs, but I was unlucky."


On February 15, Armenian officials announced that the country's unemployment level had fallen slightly and now stands at around ten per cent - the lowest in the CIS - but a closer study of the facts reveals that the problem is far worse. If you take into account "hidden unemployment", says the head of the National Statistical Service, Stepan Mnatsakanian, more than a third of the working-age population is out of work.


Only a fraction of the estimated half million unemployed, around 6,000 people, receive unemployment benefit, which is worth a little more than 3,000 drams or just five US dollars. Complicated registration procedures and bureaucracy deter all but the most determined from applying for the benefit.


Joblessness has affected the whole of society. A third of the registered unemployed have secondary or higher education. Around 70 per cent of them are women - many of whom had full-time professional jobs before independence.


Most of the jobless live in towns - but this does not mean that the situation is any better in the countryside. In small towns and villages most people do not have regular employment and get by thanks to buying and selling, working the land and remittances from relatives abroad.


But the biggest blow after independence has been to the factories, which used to serve the entire Soviet Union and now stand idle. Most of them have not formally closed or laid off their workers, yet no one goes to work there or receives a salary.


As a result, several of what used to be amongst Armenia's most popular professions in Soviet times have all but disappeared. Across the country, it is almost impossible to find work as a construction designer, a mechanical engineer or a milling-machine operator.


"Because of mass unemployment in Armenia, the working class has virtually disappeared," said Agaron Adibekian, director of Armenia's Centre for Sociological Research. He said that most factories now employed around a tenth of their former workforce.


At the beginning of 2001, President Robert Kocharian announced that reducing unemployment levels was a priority issue for his government, and promised to create 40,000 new jobs within a year. In January the president officially announced that new openings had been created in metallurgy, mining and tourism. However, many ordinary Armenians said they did not notice the difference.


"None of my relatives have noticed any increase in jobs," said Karina Kalantarian, a 32-year-old violin teacher. "Most of my relatives and friends are still unemployed, although several of them are highly qualified professionals."


Many Armenians are turning to private employment agencies in the desperate search for work, but through them they generally find only lowly jobs.


"I applied to one of these agencies and waited for more than a year for them to offer me a position in my specialist field," said Narina Ohanesian, a 25-year-old computer programmer. "But everything they offered me was unsuitable, because companies which do computer programming don't turn to private agencies for their recruitment. In the end I found a job on my own."


Adibekian said the country needed to devise new methods of counting its unemployed. He pointed out that the current figures take no account of those farmers, traders or teachers who do not work a full day, yet register as jobless people working in the shadow economy.


Peter Magdashian is a regular IWPR contributor from Yerevan.