Diaspora Generating Foreign Direct Investments

Yerevan, 2009

The Armenian Diaspora and new emigrants played a tremendous role in the post-soviet economic performance of the Armenian Republic after the collapse of the Soviet Union in 1991. Private transfers from the Diaspora, mainly from new emigrants, became temporary injections to alleviate the burden of transition of Armenia in 1993-94, the years of severe shortage of electricity, conflict with Azerbaijan over Nagorno Karabagh (NKR) and a transportation blockade by Turkey and Azerbaijan. The Diaspora in Western countries provided political support to Armenia, securing additional humanitarian assistance for Armenia, which prevented starvation during those difficult times. The assistance of the Diaspora, the stabilization program supported by the World Bank and IMF, and the assistance of international organizations and agencies enabled Armenia to regain the momentum of economic reforms after ceasefire (July 1994). Diasporan businessmen entered Armenian market as investors, mainly producing products meant for export. Armenian producers relied heavily on marketing and distribution channels of Diasporan wholesalers to export Diaspora- and export-oriented products of high quality at lower costs. The most successful and dynamically growing industries of Armenia’s economy were those with strong links and connections with the Diaspora.