REMITTANCES BOLSTER-AND LIMIT-ARMENIA'S POTENTIAL.

• Author: Wolfe, Liz
• Position: ARMENIA

ARMENIA SAW MORE than its fair share of trials during the 20th century. Between a horrific genocide that left more than a million dead, annexation by the Red Army in 1922, and a devastating 1988 earthquake, the tiny nation has hardly had a chance to regain its footing.

In the absence of high-paying domestic jobs, many industrious Armenians have chosen to work abroad and send remittances home. Armenia is in the top 20 countries worldwide for receiving remittances, which comprised 13 percent of its gross domestic product as of 2017. More than 40 percent of households currently receive cash from relatives abroad.

Remitting took off during the Soviet period, and reliance on remittances has remained high over the years due to lack of domestic economic opportunity. Though Armenia boasts an emerging IT field and has long had copper and gold mines, the country's minimal agricultural capacity, rugged terrain, and geopolitical turmoil have stunted its growth.

Armenia underwent massive industrialization in the '50s and '60s, and the legacy of Soviet technical education remains strong. Many Armenians are well-educated relative to how poor the country is overall. But a lack of technological advances during the later Soviet period forced Armenia to rely on sending people--typically younger adult men--to other countries, with Russia receiving somewhere between 70 and 90 percent of its migrant workers.

"Remittances help poorer families in rural areas and middle-income families in the cities," says Aleksandr V. Gevorkyan, a professor of economics at St. John's University in New York. But although they've played a significant role in poverty alleviation over the last two decades, he adds, they're "transitory,"...