ABSTRACT
Poverty reduction in urban Armenia, particularly in the capital Yerevan, was much faster than in rural regions from 1996 to 2003. This was a period of economic recovery from the initially very negative supply shock of the early 1990s, after the dissolution of the Soviet Union, in a transition towards sustained economic growth. Before the mid 1990s poverty had a more urban face (in relative terms). However, this changed rapidly in the years prior to 2003, when rural poverty more or less stagnated at a high level. Despite recovery and continuous agricultural growth, rural incomes continued to lag, explained among other reasons by a worsening of the domestic terms of trade for most peasant farmers (Minasyan and Mkrtchyan 2005; Spoor 2005, 2007c) and peasants’ limited bargaining power in the reconstituting and revitalizing value chains. Furthermore, substantial regional disparity was observed, with much higher poverty incidence in the mountainous regions and in areas that had been struck by the disastrous earthquake of 1988.
