Safin Mikhail MPD211 Faculty of Social Sciences Higher School of Economics Hometask for “Development Studies. Introduction”: “Georgia & Armenia. Development comparison.” Moscow 2021 STRUCTURE: INTRODUCTION ..................................................................................................... 3 COMPARATIVE ANALYSIS OF GEORGIA AND ARMENIA .......................... 4 PROSPECTS FOR ARMENIA ................................................................................ 6 CONCLUSION ........................................................................................................ 7 REFERENCES .......................................................................................................... 8 2 INTRODUCTION Georgia and Armenia are neighboring countries in the South Caucasus Region. These countries have a lot in common in terms of culture and history. Nevertheless, according to the Human Development Report published in 2020, Georgia overtakes Armenia in terms of the human development index with a value of 0.812, while Armenia has only 0.7761. In this paper, we will try to understand the reasons for this discrepancy and try to develop an optimal development strategy for Armenia. But we do not pretend to be 100% accurate in our research. Georgia Armenia Pic. №1. Armenia & Georgia on the map 1 “Human Development Reports.” | Human Development Reports, http://hdr.undp.org/en/2020-report. 3 COMPARATIVE ANALYSIS OF GEORGIA AND ARMENIA 2 Georgia Armenia Population Access to Sea HDI Gross National Income 3 728 573 Yes 0.812 14429$ 2 964 100 No 0.776 13894$ GDP per capita 4.702$ 4,620$2 Economy overview Georgia's main economic activities include cultivation of agricultural products such as grapes, citrus fruits, and hazelnuts; mining of manganese, copper, and gold; and producing alcoholic and nonalcoholic beverages, metals, machinery, and chemicals in small-scale industries. The country imports nearly all of its needed supplies of natural gas and oil products. It has sizeable hydropower capacity that now provides most of its electricity needs. Armenia has a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics, in exchange for raw materials and energy. Armenia has since switched to small-scale agriculture and away from the large agro industrial complexes of the Soviet era. Armenia has only two open trade borders - Iran and Georgia - because its borders with Azerbaijan and Turkey have been closed since 1991 and 1993, respectively, as a result of Armenia's ongoing conflict with Azerbaijan over the separatist Nagorno-Karabakh region “Human Development Reports.” | Human Development Reports, http://hdr.undp.org/en/2020-report. 4 Data uknown Pic. №2-3 Georgia/Armenia Human Development Index comparison3 Post-soviet crisis. Regional wars 3 2008 crisis. 5 day Georgian-Russian war Human Development Data Center/http://hdr.undp.org/en/data 5 Pic. № 4. Armenia/Georgia GDP comparison4 Mikhail Saakashvili comes to power in Georgia Armenian “revolution” Pic. № 5 Corruption Perceptions Index Georgia/Armenia5 As we can see from the above data, Georgia and Armenia do not differ much from each other. The difference in HDI is small, due to a slightly higher income level and longer study time in Georgia. We can also observe a gradual improvement in life in both countries with a decrease in corruption. PROSPECTS FOR ARMENIA In 2019, part of the Prime Minister's office began developing the Armenia2050 program. This program includes several topics6: 4 World Economic Outlook database: April 2021/https://www.imf.org/-/media/Files/Publications/WEO/WEODatabase/2021/WEOApr2021all.ashx 5 World Economic Outlook database: April 2021/https://www.imf.org/-/media/Files/Publications/WEO/WEODatabase/2021/WEOApr2021all.ashx 6 “PM: ‘We Perceive the Development and Implementation of Armenia's Transformation Strategy as an AllNational Movement Based on Our National Values and Goals.’” Հայաստանի Հանրապետության 6 Demographics Labor market Poverty Macro-economics Salary Health care Education and science Growth of 2.1% per year. 3.37 million in 2024, 3.77 in 2029, 4.62 in 2039 and 5.53 million in 2049. Immigration of 40,000+ people per year. 5 million for 25 years. Natural growth of 1.25% per year. Create 1.5 million jobs and solve the problem of unemployment for 2.5 million people 24% in 2019, 17% in 2024, 11% in 2029, less than 3% in 2039 and 2049. Poverty reduction by 30,000 people per year. Increase GDP by 15 time Increase the salary by 7 times. A healthy lifestyle is a national habit, to bring life expectancy to 90 years. Make education a way of life, increase funding for science and education by 20 times This program sounds too utopian. However, with proper control, with a reduction in corruption (as we saw in Pic. № 5), Armenia has a good chance to increase its HDI. CONCLUSION Georgia and Armenia have a lot in common in terms of history, culture and economy. We hope that development in these countries will continue. Վարչապետ, https://www.primeminister.am/en/press-release/item/2020/09/21/Nikol-Pashinyan-meetingSept-21/. 7 REFERENCES: “Human Development Reports.” | Human Development Reports, http://hdr.undp.org/en/2020-report. World Economic Outlook database: April 2021/https://www.imf.org/-/media/Files/Publications/WEO/WEODatabase/2021/WEOApr2021all.ashx “PM: ‘We Perceive the Development and Implementation of Armenia's Transformation Strategy as an All-National Movement Based on Our National Values and Goals.’” Հայաստանի Հանրապետության Վարչապետ, https://www.primeminister.am/en/press-release/item/2020/09/21/Nikol-Pashinyan-meeting-Sept-21/. 8