Reliable information database - a key planning tool for elimination of regional disparities
To some extent all transitional countries are characterized by regional disparities. These are conditioned not only by geographic, climate and demographic factors, but also institutional and capacity constraints that affect socio-economic development at the regional level.
Deepening of regional disparities in Armenia occurred in parallel with massive urbanization in 1980s, as well as economic growth rate acceleration which started in year 2000. This was mainly reflected in the growth of economic role and significance of the capital, Yerevan, as a result of which the difference between living standards in Yerevan and the rest of Armenia became more evident.
While disparities between the urban and rural areas are noticeable, even greater differences in income, output, productivity and employment are observed among different communities. Based on the latest available data, in 2009 38.8 percent of economically active population was residing in the rural areas, where the unemployment rate was equal to 15.4 percent, with the remaining 61.2 percent of economically active population residing in urban areas, where the unemployment rate was equal to 36.9 percent.
Examination of the system of local government in Armenia shows that it is very fragmented and communities are characterized by significant disparities in size and capacity. Ten administrative units (regions) into which Armenia is divided, as well as 915 communities (866 rural and 49 urban) in these regions are markedly different in terms of their development levels. To illustrate the point, 442 out of 915 communities, or 48 percent of the total number of the communities, have less than 1,000 population, while 197 out of 866 rural ones, or 22.7 percent, have no more than 300 inhabitants. Vardenik community in Gegharkunik region is a rural community with the largest population (9,745 people), while Qashuni community in Syunik region has only 27 people living there. The largest rural community has 360 times more people than the smallest one.
- Ten administrative units (regions) into which Armenia is divided, as well as 915 communities (866 rural and 49 urban) in these regions are markedly different in terms of their development levels;
- 442 out of 915 communities, or 48 percent of the total number of the communities, have less than 1,000 population, while 197 out of 866 rural ones, or 22.7 percent, have no more than 300 inhabitants.
The current situation hampers the ability of small communities to take responsibility for public services, such as water supply, waste management, and education. While all 915 communities have the same scope of functions and powers vested in them, the lack of human, institutional and technical capacities to provide services in an efficient and effective way also affects the further fragmentation of communities. This, in its turn, negatively impacts on the living standards of the population. At the same time, poverty levels and economic parameters such as per capita output in industry, agriculture and construction sectors do not appear to follow comparable trends. For example, Vayotz Dzor region enjoys the lowest poverty level, while contributing the least in terms of per capita output.
The analysis of these disparities shows that, in addition to fragmentation, lack of human and institutional capacities, there is also a lack of reliable data required for targeted regional development planning.
UNDP has been actively involved in the process of reducing regional disparities in Armenia through policy development and transferring of know-how to support regions that are underdeveloped or are suffering from structural problems, trying to promote socio-economic development and competitiveness.
A database on Armenia’s urban and rural communities was created in 2009 in partnership with the Ministry of Territorial Administration. It contains about 600 indicators, such as measuring the incomes of the population, the level of unemployment, land ownership, access to health services and education, etc., characterizing each and every community in Armenia.
In 2011, UNDP supported the preparation of Armenia’s Regional Development Strategy using the database. The methodology for measuring development disparities at regional and community levels relies on the Multidimensional Poverty Index (MPI) introduced in Human Development Report 2010 Anniversary Edition, which uses the standard of living, education and health to measure multidimensional poverty.. The MPI offers a holistic approach to measuring poverty across Armenia’s regions, through a combination of weighted dimensions of human poverty including, health, education and standard of living, each measured using multiple indicators. Revealing regional disparity patterns based on this methodology requires augmenting the community database with new indicators.
The global financial and economic crisis that hardly hit Armenia and developments since 2009 necessitated the upgrading of the database. In 2011, UNDP initiated the process of creating a new upgraded database to accurately describe the socio-economic development status of Armenia’s territorial units (communities and marzes) using the Multidimensional Poverty Index. The latter, together with the Economic Development Index, created by the Ministry of Territorial Administration, will enable to categorize the regions and communities and measure the poverty levels, thus help set priorities for action.
“Territorial governance priorities include development of new tools to move forward with Armenia’s regional development agenda. The country needs a comprehensive methodology for measuring the economic development potential of the communities and assessing the efficiency of interventions financed from the state budget and other sources. Armenia should also evaluate the results of regional development programs and calculate the impact these programs have on poverty levels,” said Vache Terteryan, First Deputy Minister of Territorial Administration at a press conference in Yerevan on 1 February 2012.
Moreover, the advancement of the decentralization reform in Armenia and broadening of local administration powers require detailed information on the social and economic status of communities. The data gathered in the database will be used for monitoring purposes and will create dynamic series to help better target development interventions. It will become an important tool in sectoral and regional policy development, resource allocation and horizontal and vertical coordination.
“The upgraded database, which will become operational in the first half of 2012, can be an important tool to be used in formulation and promotion of programs aimed at mitigating regional disparities, as well as for implementing the national agenda for amalgamation of Armenia’s communities and establishment of community associations,” said Laura Sardaryan, expert of the working group in charge of creating the upgraded community database.