Is Yerevan competitive or not?

6 m.   |  2019-01-09

Nowadays over 54 % of the world’s population live in cities, and in 2045 this number will reach over 6 billion. 80% of the worldwide GDP is now created in cities. This means that urbanization is an impulse for investment in innovation, raising productivity and technological development in the economy.

Research shows that the world’s most developed cities are distinguished by their mobility, high level of public health and security. Singapore, London, New York, San Francisco, Chicago and other cities stand out in this respect. In such a developed Asian Megapolis as Singapore, residents save up to 60 hours annually due to the advanced transportation system, and the city’s video control network helps law enforcements to fight crime effectively.

However, urbanization has its negative after-effects as well: the unprecedented growth of population aggravates existing problems and the formation of the new ones: the efficient usage of infrastructures, the development of transportation system, housing construction, poverty growth, unemployment, air pollution, natural disaster  management and other sectors.

The issues on the flexible, sustainable and inclusive development of cities as well as the opportunities for spreading experience and localization of new urban programs were discussed during the 9th session of the World Urban Forum held in February this year in Kuala Lumpur, Malaysia.

Some of the urbanization issues of Armenia will be discussed in this article which directly relate to the city’s competitiveness. According to data from January 2018, 1 895 800 out of 2 972 700 Armenian permanent residents live in cities, of which 1 077 600 in Yerevan. Second place by urban population is the Shirak region with 138 000 people, then comes Kotayq and the Lori regions, which have 137 100 and 128 800 residents respectively. The smallest urban population is 170 400 is in Vayots Dzor. This kind of dense urbanization in Yerevan brings a number of problems: from national, economic security to air pollution, transportation network issues, housing conditions, unemployment and so on.

T he issue of raising competitiveness in cities was touched upon during the World Urban Forum.  According to the definition of international structures: “The city is deemed competitive, if it create jobs, increases productivity and increases the incomes of citizens”, which contributes to the overall living standards.

It was mentioned in the 2017’s annual report of Yerevan, the concepts of the city’s competitiveness has been mainly restricted to improving educational institutions and implementing events that reflect sport and cultural life. For instance, 28.7 billion drams or the 33.7 percent of city’s budget has been assigned to the educational system in 2018, which continues to exceed other projects.

The administrative districts in Yerevan also develop disproportionately, which is evident from the comparison between the districts of Shengavit, Davtashen, Malatia-Sebastia and Kentron.

The number under the poverty line is also high in urban areas: in Yerevan it is 33, 3%, which means that every third person of the city is poor and cannot meet the minimum living standards.

The most important issue is, of course, the high unemployment level. Particularly, 9560 job seekers were unemployed in Yerevan by the end of August 2018. If adding the problems of garbage collecting, public transportation, housing construction and other issues, the concept behind the lack of competitiveness in the city stands out.

Comparing the urbanization processes between Armenia and neighboring countries, such as Azerbaijan, Georgia and Turkey, if in 2050 the total number of urban population in Yerevan will make 2 700 000, it will make 1 103 900 in Azerbaijan, 3 394 000 in Georgia and 9 562 700 in Turkey.

Yerevan’s competitiveness and compliance with international standards can take steps forward if the economic, scientific, financial, cultural and human potential is used efficiently and coordinated properly. It is worth mentioning, that world’s major cities stand out because of their concentration of universities, educational and scientific institutions. Therefore, higher education facilities in the city is of vital importance, which plays an important role in raising the city’s competitiveness.

A s the international model proves, the creation of technopolices and technoparks is one way to increase competitiveness and innovative development of the country. These are city-based free economic zones, which contribute to scientific-technological and innovative development of the area and receive tax free benefits. In the USA, these kind of areas of free economic zones are called technoparks, such as the Silicon Valley, which has played a major role in the development of information technology worldwide.

These types of techno parks are one of the ways that can make Yerevan a competitive city. The effective and innovative activities in information and communication technologies of Synopsis Armenia, Viaspher Technopark, Enterprise Incubator foundation and other organizations deserve special attention in Armenia. The productive potential of the city is of no less than the importance in the vision of the development of a competitive city. Also, the production potential of Yerevan can and will increase the city’s competitiveness.

The economy of Yerevan is diversified: light and food industry, information technology, various services, processing of agricultural products and so on. More, than 80% of manufacturing industry is concentrated in Yerevan. 42.1% of the country’s total industrial volume, 53.9% of construction, 82.6% of retail trade, 85.5% of services, 77.6% of the total area of residential buildings, 33.2% of hotel economy is also in Yerevan. 

It should be noted that 14.6% of services are information and communication, which are the most important factors of a competitive city. The urban income is also one of the most important factors of a competitive city. In 2017, the average monthly nominal salary in Yerevan was 194 182 drams, exceeding the country’s average index in Armenian drams. Achievements in tourism are also remarkable from a competitiveness viewpoint. 1 172 402 tourists arrived in Armenia from January to September of 2017. This rate grew 21.1%, compared to the previous year. The above-mentioned statistics shows economic, scientific-technological and the cultural opportunities of Yerevan that can catapult it to a competitive city.

So, is Yerevan competitive? Not yet. However, Yerevan is on the verge of developments that can deem the city competitive in the near future. Learning from the international models, has proven that the city’s competitiveness is a multifunctional and multilayer of processes which includes excellent infrastructures, modern systems of providing security, the availability of economic, scientific potential, cultural centers, sights, and their inclusive developments.

The flexible and efficient governance of Yerevan’s economy by new urban authorities will help to resolve housing construction, water supply, city’s poverty reduction, job creation, and in general many problems of social and economic development  of the city, contributing to the future lifestyle of Yerevan’s residents. In this context, the harmonization of public and private sectors, civil society, individuals and of all interested parties, as well as coordination of activities are of no less importance.