Forbes: Armenia is the world’s second worst economy

On Tuesday, the prestigious Forbes magazine published a list of the world’s ten worst economies in which Armenia occupies the second place next to Madagascar.

Forbes has selected the worst ten economies from among 117 countries according to three-year average statistics for gross domestic product growth and inflation (including the International Monetary Fund’s 2012 estimates), plus GDP per capita and the current account balance, a measure of whether the country is importing more than it exports.

Compared with the list for 2010, significant changes have taken place this year. While the previous release included mostly African nations, this year the list also includes Ukraine (4th position), Kyrgyzstan (7th) and Iran (10th). The authors of the research consider not only the economic crisis, but also mismanagement, corruption as causes of the decline of economies.

“Onetime losers like Ghana and Zimbabwe got their economic acts together and moved off the list while some countries, including Armenia and Jamaica, marched into the lower ranks primarily because of the global financial crisis. Others, like Madagascar and Nicaragua, earned their positions almost entirely due to the ineptitude of their rulers. It should come as no surprise that eight of the 10 worst economies also were in the bottom quartile of countries in Transparency International’s Global Corruption Perceptions Index, with Guinea, Kyrgyzstan and Venezuela scoring close to the bottom,” says the report.

“Beyond income, (corruption) extends to economic development,” it quotes Transparency International’s Robin Hodess, group director for research and knowledge, as saying. “All of the indices that reflect human development suffer. Where government doesn’t work, economies don’t grow.”

According to Forbes, Armenia mainly suffered because of the financial crisis: “Armenia’s economy shrank by 15% in 2009 as an expatriate-financed construction boom fizzled along with the world economy. With a mediocre growth forecast for the next few years, this landlocked former Soviet republic, dependent upon Russia and Iran for virtually all of its energy supplies, is struggling to keep up with the rest of the world. Per-capita GDP of $3,000 is less than a third of neighboring Turkey, and inflation is running at 7%. On top of that, Russia cut back on supplies of diamonds, hurting Armenia’s once-thriving diamond-processing industry.”

Armenia’s well-known economist, head of the “Alternative” Research Center Tatul Manaseryan tends to trust the kind of assessment made by Forbes.

“Usually, the Forbes surveys are well grounded and our researches also show that Armenia’s economy, to put it mildly, is not in a good condition. In this sense, I can share this opinion. But I am confident that possibilities of redressing the situation are not exhausted,” Manaseryan told ArmeniaNow.