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Publication
Europe and Central Asia Economic Update, Fall 2021: Competition and Firm Recovery Post-COVID-19
(Washington, DC: World Bank, 2021-10-05)Although global economic activity is recovering and output in Europe and Central Asia (ECA) is expected to grow in 2021, containing COVID-19 remains a challenge in the region. Enterprise survey data for the emerging and developing countries in the region show that COVID-19 had a profound and heterogeneous impact on firms. Smaller, younger, and female-run businesses were hit harder and had greater difficulty recovering. But the crisis also played a cleansing role and economic activity in ECA appears to have been reallocated toward more productive firms during the crisis, particularly in countries with more competitive markets. Firms with high pre-crisis labor productivity experienced significantly smaller drops in sales and employment than firms with low pre-crisis labor productivity and were also more likely to adapt to the crisis by increasing online activity and remote work. Many governments in ECA implemented broad policy support schemes to address the initial economic fallout from the crisis. Overall, this government support was more likely to go to less productive and larger firms, regardless of the level of their pre-crisis innovation. As economies enter the economic recovery phase, it will be important for policy makers in all countries to phase out broad policy support measures as soon as appropriate and focus on fostering a competitive business environment, which is key to a strong recovery, resilience to future crises, and sustainable, long-term economic growth. -
Publication
Macroeconomic Effects of Financing Universal Health Coverage in Armenia
(World Bank, Washington, DC, 2021-06-08)Armenia has made significant progress in improving population health outcomes over the past two decades. However, essential health care for non-communicable diseases (NCDs) is underutilized in part due to the cost of access. Armenia has also committed as a signatory to the Sustainable Development Goals, to making progress towards Universal Health Coverage (UHC). This commitment involves guaranteeing access to essential health care for all its citizens. The Ministry of Health (MoH) has developed a concept note for the introduction for Universal Health Insurance that proposes to mobilize additional revenue through payroll taxes or higher budgetary allocations to the sector. However, the Ministry of Finance (MoF) has noted that revenue mobilization options should ideally demonstrate positive returns in terms of economic growth and employment. Therefore, at the request of the MoH, the World Bank has modeled the macroeconomic impacts of options to increase domestic resource mobilization to finance universal access to essential health services in the basic benefits package. The analysis assumes that through UHC reforms that mobilize additional public spending, the government would cover the cost of ninety-five percent of household needs for health care from 2021 to 2050, and that the increase in the demand for care will be supported by improvements in supply-side efficiency. The results suggest that increasing direct taxes is better than increasing indirect taxes as the former are less distortionary and cause smaller allocative inefficiencies. -
Publication
Reforming the Basic Benefits Package in Armenia: Modeling Insights from the Health Interventions Prioritization Tool
(World Bank, Washington, DC, 2021-03-26)Armenia is an upper-middle-income (UMI) country in the South Caucasus region. The Coronavirus (COVID-19) pandemic and a regional crisis have resulted in the real economy's contraction following rapid growth in the past five years. Improving access to high-quality health care is essential for responding to non-communicable diseases (NCDs) and preventing mortality from infectious diseases in Armenia. Armenia is faced with the challenge of achieving Universal Health Coverage (UHC) when funding for health services faces downward pressures due to a donor funding transition, the Coronavirus (COVID-19) pandemic, and regional conflict. This report is part of the World Bank’s technical support toward universal health coverage in Armenia, which includes advisory services and analytics aimed at supporting the government’s efforts to expand access to high-quality health care. The report draws on the Health Interventions prioritization tool to optimize allocations across essential health services in the basic benefits package and estimate the potential impact of these allocations on population health. -
Publication
Strategic Purchasing for Better Health in Armenia
(World Bank, Washington, DC, 2020-09)This report is an activity under the technical support towards universal health coverage in Armenia, which includes advisory services and analytics aimed at supporting the government’s efforts to expand access to high-quality health care. The report, Strategic Purchasing for Better Health in Armenia, draws on an adaptation of the strategic purchasing progress framework to examine the country’s experience in purchasing healthcare, identify contextual factors that limit the potential of purchasing to reform healthcare, and integrate these findings with relevant global examples of strategic purchasing reforms. The authors conclude the report with tailored recommendations for strategic purchasing that can improve population health. -
Publication
Survive, Learn, Thrive: Strategic Human Capital Investments Toward a More Prosperous and Inclusive Armenia
(World Bank, Washington, DC, 2020-09)Human capital – the knowledge, skills, and health that people accumulate over their lives and that enable them to realize their potential as productive members of society – is an important contributor to the wealth of all nations regardless of their income status. A child born in Armenia today will be 57 percent as productive when she grows up as she could be if she received a full education and was completely healthy. This reflects the existence in Armenia of deficiencies in its schooling, student performance on harmonized tests, and the protection from non-fatal health risks that it provides beyond childhood. These gaps in human capital formation have negative implications for the economy. The 2013-2014 National Competitiveness Report of Armenia highlighted that insufficient human capital is a binding constraint to the country’s growth. If Armenia ensured full education and complete health in the long run, the per capita Gross Domestic Product could be 1.75 times higher. -
Publication
Realizing Armenia's High-Tech Potential
(World Bank, Washington, DC, 2020-01)Armenia's economy is heavily reliant on domestic demand, which is itself driven by remittances that support local construction and consumption. Armenia will need to shift to an export led strategy if it is to move from middle income to high-income status. Because Armenia is a landlocked country with comparatively high trading costs in physical goods, high-tech digital exports will continue to be key to Armenia's growth. This report seeks to identify strategic opportunities for Armenia’s private sector in high-tech global value chains (GVCs) and also highlights reforms that could support Armenia’s evolution. The study builds on the FY18 Armenia Systematic Country Diagnostic, which identifies value-chain development as a core building block for sectoral growth. Although the report is targeted at policy makers in the Armenian government, sectoral development strategies rely heavily on strong private sector engagement and open public-private dialogue. Armenia's tech community may therefore also take interest in this analysis. -
Publication
Invitations and Incentives for Primary Care Screenings in Armenia
(World Bank, Washington, DC, 2020)Since 2011, the Armenian government has implemented a national performance-based financing scheme which has given financial incentives to providers for screening the population, including for hypertension and diabetes. In addition, there have been investments in training health workers on clinical guidelines and mass media campaigns to increase demand. Personal invitations from family physicians prompted users to consider their need for screening, but attendance also depended on the personal value on one’s health and the perceived health benefits of screening. Global experience indicates that conditional financial incentives can increase preventive health care use by removing resource constraints to adopting healthy behaviors and by helping overcome issues of bounded rationality or willpower. Messaging interventions, including mass media messages and personal invitations, can also increase preventive health care use by reducing obstacles to change, adjusting perceptions of social norms, or associating the desired behavior with valued outcomes.This study estimates the impact of demand-side financial incentives and invitations from a family physician on primary care screening attendance rates and examines potential mechanisms of action. -
Publication
Work for a Better Future in Armenia: An Analysis of Jobs Dynamics
(World Bank, Washington, DC, 2019-10)This report aims to provide a comprehensive package of timely and relevant input to the Government’s initiatives. In doing so, it brings together into one coherent framework and story-line both new analysis and previous work undertaken for the World Bank’s policy dialogue – in particular the Armenia Systematic Country Diagnostic and Drivers of Dynamism on constraints to growth, international integration, and poverty reduction, and the Skills Towards Employment and Productivity (STEP) surveys on the demand and supply of skills for the Armenian labor market.2 New analysis includes an updated view of the labor supply situation, labor productivity developments, and the links with recent overall macro and global trends. Because of data limitations, the demand side of the jobs agenda remains insufficiently explored, including analysis of the characteristics of job creating firms, the drivers of firm level productivity, and the constraints to firm growth, and hence to job creation. Ongoing data collection initiatives will help close these gaps over the short-to-medium term. -
Publication
Early Childhood Development Services in Armenia: Diagnostic Report
(World Bank, Washington, DC, 2019-08-28)This report assesses the key constraints on the supply of (quantity and quality) and demand for early childhood development (ECD) services for pregnant women and children under the age of five in Armenia and puts forth recommendations on how to improve access to ECD services for poor and socially vulnerable families. The government of the Republic of Armenia, with support from the World Bank and other development partners, is currently expanding the existing social work system in Armenia to more actively link vulnerable families to ECD services. A specific objective of the report is to inform the design of this expansion. The World Bank team carried out a survey of ECD services providers in the four marzes of Ararat, Gegharkunik, Lori and Yerevan. The report draws heavily on the findings of this facility survey, the Integrated Living Conditions Survey (ILCS) 2017,3 the Social Snapshot and Poverty in Armenia, the Armenia Demographic and Health Survey (DHS) 2015-16 (NSS 2017), and on other ECD-related studies conducted in Armenia. The report’s assessment and recommendations are also grounded in global evidence on ECD. This evidence highlights the importance to human development of receiving nurturing care in the early years. There is robust evidence that early experiences shape the brain’s structure and functioning, and that deprivations during the prenatal period and early childhood can have substantial negative impacts on later cognitive ability and educational achievement. Early childhood development services that promote nurturing care during this period are cost effective, and programs for disadvantaged children during early childhood have a higher rate of return than programs introduced later in life. Services with proven benefits to ECD include antenatal care, promotion of child nutrition and micronutrient supplementation, parenting education, and preschool education. Global evidence points to specific interventions in each area that have proven impact. -
Publication
Armenia: Better Understanding International Labor Mobility
(World Bank, Washington, DC, 2019-06)Armenia has experienced massive outflows of its people over years. Emigrants’ share of the Armenian population stood at approximately thirty-two percent in 2017, according to migration data from the United Nations (UN). Half of Armenian emigrants reside in Russia. Other key destinations include Azerbaijan, the United States and Ukraine. Recent migration is primarily temporary labor migration, unlike the permanent emigration that occurred in the 1990s. Remittances resulting from migration constitute important support to the welfare of households and the domestic economy. Nevertheless, the effects of remittances and migration on labor markets are not fully understood. As migration is likely to continue, such questions are still timely and relevant. The Russian-Armenian University (RAU) survey data indicate that about as many people would like to migrate as are current first-time migrants. This policy brief aims to explore and address the two questions about migration and its effects on the labor market in Armenia. It uses data from the household migration surveys conducted by the RAU over the three-year period of 2015-2017. The brief describes the general landscape of temporary labor migration and presents relevant policy recommendations.