Armenia is a developing and lower-middle-income country, with a per capita GDP of around 5400.00 US dollars, and has huge development potentials. It has developed in economic, social and other terms that improved the living standard of its citizens more in the present than in the past. It has the potentials for strong growth in several sectors including IT, agriculture and tourism, renewable energy expansion, improvements in human capital, economic diversification and green growth. Armenia — a unitary and multi-party democratic country — has the potential to attract investment and improve the private sector further. Amongst others, Armenia has the potential to provide more facilitative grounds to the people on political, social and other grounds, in addition to economic ones.
But there are economic, political and other development challenges to the Republic of Armenia. Some of the main development challenges include challenges to improving infrastructure, attracting more investment, export diversification and enhancing human capital. Other challenges are challenges in education quality, poverty, high unemployment, regional development disparities and the need for better governance and institutional reform. Though poverty is declining in Armenia, it is still around 23 percent, while the unemployment rate is around 13 percent at present. Geopolitical instability and climate change vulnerability are also notable challenges to development. Regional tensions and the lingering effects of long conflicts with Azerbaijan over Nagorno-Karabakh contributed to development concerns and humanitarian needs in Armenia, which became independent from the Soviet Union in 1991.
There are several other development challenges. Corruption and lack of judicial independence are vital challenges. Corruption is still a notable concern —though it has reduced — in Armenia, which ranked 63rd in 2024 as per the Corruption Perceptions Index score. There are restrictions on freedom of expression and peaceful assembly, government consolidation of power and overreach, torture and cruel treatment and concerns related to arbitrary arrest and detention. Freedom of expression and peaceful assembly are curtailed many times, human rights defenders remain unprotected and journalists and environmental defenders are threatened and harassed, along with politically polarized media. Other concerns include the protection of vulnerable groups including refugees and internally displaced persons and discrimination.
But, pertinently saying, the governments of Armenia have taken legal, policy based and other initiatives that have been helping address various challenges and fostering development. Armenia has been implementing various plans and policies including the Five-Year Government Action Plan (2021-2026) and the Armenia Development Strategy (2014-2025) that have helped make economic development, contributed to improvements in infrastructure, fostered institutional modernization and resulted in improvements in many other aspects. Armenia also implements various programs that provide increased economic opportunities to its citizens and facilitate social protection and has taken different initiatives to address corruption and make institutional reforms, leading to improved outcomes on many grounds including reduced poverty.
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But various limitations in the efforts of the Yerevan governments hinder the desired improvements in Armenia — a landlocked country in the Caucasus. There is a lack of holistic development plans and strategies, the inconsistent implementation and monitoring of initiatives and weak collaboration between the government and private sectors that hinder development as desired. There are also less emphasis on addressing corruption, the improvement of political and civil rights grounds and reducing uneven access to quality social services as desirable, impacting development and politics in Armenia . Amongst others, there is a lack of consistent investment and efforts to address ongoing regional issues that present obstacles to overall progress.
Measures are vital to address economic and other development challenges in Armenia in order to foster human development as desirable. Increased exports especially high- tech exports, economic diversification and holistic strategies for the improvement of the private sector is vital and will improve the economic and social conditions in Armenia. But the promotion of entrepreneurship and providing economic opportunities to all including the disadvantaged groups is vital. Decentralized development is crucial to address regional disparities in development efforts that center on the capital city. Poverty needs to be reduced further while uneven access to quality social services needs to be addressed.
But maintaining a peaceful relationship with Azerbaijan, between which there has been a long conflict over Nagorno-Karabakh until the peace deal called the Armenia–Azerbaijan Peace Agreement was reached two months ago, will be helpful. Armenia also needs to address political, civil rights related and other concerns, which are more common during protests. Ensuring the rights of political assembly and addressing arbitrary arrests, and torture are vital. A strong political commitment is needed to provide improved political and civil rights grounds. But providing media freedom more is also crucial in Armenia.
