Time to Realign
Armenia is in a very interesting part of the world. As most of you know it is in the Southern Caucuses but this is a new designation. As I travel around the country and see the 1000 year old monuments of the silk trail with Armenian and Arabic languages, it brings up a time when Mother Russia was an unknown neighbor and Armenia was very much part of what is today called the Middle East.
This article in the LA Times is very interesting. It points out a changing demographic which will only get stronger. As I work with business people in their 20s and 30s, discussing with them markets outside of Armenia what comes with this is a challenge of removing the idea of Mother Russia as an unchangeable entity. For years we have known Russia is having a negative population trend.
In my advisement, I have been promoting the idea of Armenians to stop looking north and to begin to look east and west. The above article shows that Russia is dying. It is killing itself and over the next 30 years will continue to weaken. I suspect that in the next 15 years that alternative fuels and resources will be developed to remove the power of natural gas and oil from Russia. Mother Russia will begin to become a shrinking market and the Russian language will begin to loose importance. We have already seen people in rural Armenia who do not consume Russian language media are already loosing their Russian skills. This is the same story from Armenia to the Kazakhstan border with China. Mother Russia is loosing her grip over Asia.
Of course we run into the issue of the Turkish border being closed. Right now, I kindly ask we forgo that issue as I will address it in a future article as I do not wish to get into a debate about politics. The purpose of this is to discuss the future of the Armenian economy with the hypothesis that either through Iran and a stable Iraq or through the rail connections to the east and west Armenia can begin to export goods.
I contend that Armenians for millennia have been excellent businessmen. If you look today in the countries that contain Armenian enclaves, you will find that a good portion of the most successful people are Armenian. Of course, in America or Russia, due to the size of the population you cannot say they make up a huge proportion but if you look at California, I contend that Armenians are very successful as a portion of the business community. If you turn to Armenia’s neighbors, the Turks and the Iranians are having a population boom. Right now, in both countries there are large groups of people that will come of age in the next fifteen years which will be excellent markets for Armenian businesses. The following are from the U.S. Census Bureau website:
Turkey Population Breakdown
Iran Population Breakdown
Of course, we are not talking about businesses of mass scale. The Turks can make low value, high volume items much cheaper than the Armenians simply because of physical location and cheaper labor demographics. However, it is time for Armenian business people to look at finding niches in that market to exploit. The same goes with Iran and in the future Iraq and much of Arabia. I cannot of course begin to tell you those niches and how Armenians will compete in this entry. It would be unfair to the people I consult but the fact is there is room in those markets for things Armenians do well and at a higher quality. Also, there are Armenians living in all of the neighboring countries which could be business partners and help expand the local market in each specific country.
In closing, I hope that Armenians will begin to shy away of thinking that the best market for them is north, to Mother Russia. Mother Russia is sick and dying and the new generation of business people has larger and more dynamic populations much closer at hand. If you wish to let history stand in the way of economic empowerment, only bad things will come, but if you wish to see the rising demographic, Armenia will begin to see the vision of Armenia 2020!
Great! At least a voice of reason in this crazy world! Our businessmen are stuck on Russia and Europe too much. South is our one and only chance! (just one problem with that: there’s war in Iraq, and Iran’s doing all it can to engage into one)
Comment by Observer — 10/10/2006 @ 8:37 am
I have a lot of griefs about Russia in the recent time, yet I still not back your article.
You talk about economy. Economy is a vital for any politics, you are right. Yet, good economy cannot be the ultimate objective. One doesn’t live for survival or well being. There is something more Armenian people can do for the world other than “finding niches”, “import/exporting goods”. Those are only methods. What Armenian people stand for? Do they stand for global development in social, educational, cultural live of a human being. I hope so, but even if they do, that is not enough to make a difference for a country of this size and population. We really need an orientation, a camp that we can be effective member of. I don’t see any such community in the Middle East. But I do in Europe, in Russia, maybe in US. Moreover, Russia has a proven record of a state with international exposure. International exposure means that this country has led some developments in the world in any of the above mentioned spheres. Earning money is easy, one should also learn to spend it. I don’t want to see Armenia in the range of other “producer-consumer” countries, that mean nothing else for the world. Take UAE - they are positioned excellently, they have sustainable economy, but what they do with their money. Has anyone heard recently about any serious research or educational effort by these guys. But it beats records in huge hotels, winter parks and other consumerizm bullsh*t.
Country positioning is not only about economics. Economics is one of the components. You can trade even with your enemy. Thus, if you want talk economics only, don’t use sarcastic words like “Mother Russia”, “grip” etc. You want discussion about economics, (as mentioned in your text), then list pure economical arguments. Being in other geopolitical camp in the medieval time means ABSOLUTELY nothing in current economic reality, population of a country has only secondary effects on the market potential and so on.
Comment by Հայաստանցի — 10/10/2006 @ 11:09 am
Hayastansti, it seems you did not read the article which I referenced. I used the term “Mother Russia” which is commonly used internationaly. You cannot deny for that past 200 years, Russia has been the center of an empire. It started in Tzarist times and continued through the Soviet times. This is not a political nor an economic term. It is common language when referring to Russia as a protector of much of eastern Europe and all of Asia.
Secondly, I think you did not understand my argument about looking forward! The point is that your great grandparents spoke Armenian, Georgian, Turkish and possibly Arabic. This is significant because those nations are growing. Do you disagree that Russia is dying and in the next 40 years will loose prominence as a world power economically. Look at the numbers and trends. You can see that the Kremlin is obviously worried. Odds are between AIDS and a low birth rate, Russia will go from a small population of 145 million people to 60 million. That is a big contraction of a market in two generations.
With Russia dying and becoming even more nationalistic (reference the number of people killed because they are not of Russian heritage living on Russian soil), the population will shrink. With business people in thier 20s and 30s, they must reference the future and the future markets are to the east, west and south. The north will be a contracting market.
Hayastansti, I understand your political argument but as Russia looses her power Armenia must look to increase its economy so that regionally it is secure and safe and not looking to “Mother Russia” or “Uncle Sam” to support her. In short, you do not want to be in the position that Israel is in economically and politicially being tied to America.
I would like to hear your point of view but please be sure to reference the base materials on which I base my argument.
Comment by Burnell — 10/10/2006 @ 6:32 pm
I am a bit confused at what exactly Armenia should export to Iran/Turkey, Stone? Jermuk? Kilikia Beer? Apricots and rugs?
Armenian industry is so small it isn’t even a blip on a radar screen of Iran and Turkey. The only things that are working in Armenia today are things connected to diaspora, tourism/hospitality/financial services and the construciton started to pick up due to the expats purchasing vacation and 2nd homes. This is per my personal observations, perhaps you have access to some other data that I am not aware of.
Russia dying talk etc., to quote Mark Twain, “The rumors of my death have been greatly exaggerated” They are developing pretty nicely, all things considered, even if they shrink a bit so what’s the big deal? Both Iran and Turkey have very uncertain future in front of them, Iran ran by mullahs and lunatics, and Turkey with its inferiority complexes where it is felony to question ones turkishnes.
The fact that there will be more turks in the world in 20 years is not a good news at all, instead of thinking what to export to them we should be worrying at how to defend ourselves when they come of age.
History repeats itself, and those who cannot remember the past are condemned to repeat it. — George Santayana
Comment by Tim — 10/11/2006 @ 6:11 am
Burnel, I’ve read the referenced article. I regularly read similar articles about Russia by western journalists. The common characteristic of such articles is general negative (or at best sceptical) tone that writers use in their commentaries.
I don’t deny Russian imperialism, yet I also believe in Russian internationalism. Nationalistic movements in Russia are explained by i) weak socio-economic situation and ii) reaction to growing number of illegal immigrants.
I see Armenia future in continuing efforts to become member of the gentile society. Diversity of economic relations should not be attained at a cost of worsening relations with Russia, being one of our bridges to the integration. I doubt that Middle East in general and Turkey and Iran in particular would provide a sound leadership to Armenia in this respect.
And again, I consider demographic data as only secondary for shaping of economic policy.
Comment by Հայաստանցի — 10/11/2006 @ 9:55 am
Excellent Question Tim! That is the neat thing about business. You find a niche and you make it happen! Then you spin off businesses and go from there. Look at the Dutch or the Sinaporeans. Both examples of small countries with small populations with strong economic power. I am talking expanding beyond the currently Oligarchy system.
Also, Tim you give the Diaspora to much credit. Your over arching statement is simply false especially outside of Yerevan. As I travel around rural Armenia, I see the tourist visiting the vanks but I do not see the Diaspora taking the risk in the Tavush or Gegharkunik Regions. They are happy to buy Areni wine but not invest in businesses in Vayots Dzor Region. The only place we see much outside investment is the Gyumri and Vandazor areas. There are many reasons for this which we will explore in a later article and I do not wish to discuss in a comment section.
Tim, if we wish to hold onto the statement, “..we should be worrying at how to defend ourselves as they come of age.” Armenia will end in a couple generations. You might as well right off 3000 years of history. It is only through the warefare of the future which is economic that Armenia will be able to win the war and set the history.
Tim, I do appreciate your view point and thanks for sharing it! It is great to have a little debate!
On to my favorite, quotes! Here are a few I use with my advisement:
“The best way to predict the future is to invent it.” - Alan Kay
“The future belongs to those who believe in the beauty of their dreams.” - Eleanor Roosevelt
A quote to illistrate what we musn’t do:
“The world is full of people whose notion of a satisfactory future is, in fact, a return to an idealised past.” - Robertson Davies
Comment by Burnell — 10/11/2006 @ 10:31 am
Hayastansti, not much I can say other than if we remain in the Soviet mindset especially with Georgia being more and more western aligned, Armenia will be in serious trouble. I reference the quote in comment six from Robertson Davies again. Substance and strength will only come through a developed and flexible economy. It is a proven model and one that the Armenian 2020 program pushes.
Hayastansi, thanks for sharing your ideas but what I am struggling with is how do we ensure a brighter future for the people living outside the center of Yerevan? I understand you want to make policy decisions on more than demographic data but tell me how Armenia’s economy will continue to expand and develop. Not every Armenian will be able to work in IT and export thier work abroad. Please help me understand by articulating how the future shall be created. If you offer me solid ideas, I can use them as I work with the business people all over rural Armenia to improve thier outlook and understanding of the next 40 years. Looking forward to your articulation!
Comment by Burnell — 10/11/2006 @ 10:34 am
I would be happy to discuss the issue in more depth, yet I prefer e-mail to public blogging. You can use the address I provided but on yahoo domain.
Comment by Հայաստանցի — 10/13/2006 @ 4:54 pm