On May 10, 2006, a lecture entitled “Sustainability of Rapid Economic Growth in the CIS: A Panel Data Approach” was held at the Caucasus Research Resource Center (CRRC). The lecture was conducted by Garbis Iradian, Senior Economist at IMF, visiting Professor at AUA, and AIPRG fellow. It was based on Mr. Iradian’s research work on the former Soviet Union Republics at the Vienna Institute for International Economic studies.
During his presentation, Mr. Iradian analyzed the main factors behind the recent rapid economic growth in the Commonwealth of Independent States (CIS). These factors include the following: improved allocation of resources, increases in capacity utilization, recovery of previously lost output, sharp rise in World prices for oil and gas (which benefited Azerbaijan, Kazakhstan, Russia, and Turkmenistan), and large increase in workers remittances to Armenia, Moldova, Kyrgyz Republic, and Tajikistan). Mr. Iradian put forward the hypothesis that the recent rapid growth is expected to decline gradually. He pointed out that the share of growth derived from improved resource allocation and recovery of lost output is expected to diminish and long-term rapid growth will increasingly depend on physical and human capital accumulation. However, as Mr. Iradian indicated, attaining high saving rates in some of the CIS countries (Armenia, Georgia, Moldova, Russia, and Ukraine) would be hampered by unfavorable demographic trends of low birth rates and high rates of emigration of active working age people.
Mr. Iradian also compared the sources of rapid growth in the CIS with other regions including the Baltics, Eastern Europe, and East Asia. As for Armenia, he emphasized the need for further improvement in structural reforms (including the banking system, competition policy, and governance) to sustain high growth rates.
Attached Files: Lecture Presentation