Author Archives: Aleksandr Gevorkyan

About Aleksandr Gevorkyan

Dr. Gevorkyan is the author of Innovative Fiscal Policy and Economic Development in Transition Economies (Routledge, 2013 & 2011) and the editor and translator of How Did I Survive? (Cambridge Scholars Publishing, 2008).

The nuanced lessons of the pandemic

before the sunset at the Rockaways, NYC [January, 2021]

The obvious lack of systemic lessons from the COVID-19 pandemic, lamented in the FT’s Covid has no grand lesson for the world (, December 29, 2020) challenges our thinking on economic systems and betrays a broad fallacy of our times.

As 2020 comes to a close there is hardly a socio-economic model swaying any superiority in battling the pandemic. Larger economies with generous public spending are facing similar pandemic-induced emergencies just as the smaller nations (some recovering from recent wars) where constrained fiscal space or weak healthcare infrastructure intensify the force of the crisis. In this world, as Leo Tolstoy reminds us, “[a]ll happy families are alike; each unhappy family is unhappy in its own way.”

But the recent intellectual effort to reduce these experiences to a generic institutional blueprint hides the strategic fallacy of our collective longing for a conceptually standardized policy toolkit.

Such one-size-fits-all approach is reminiscent of the early 1990s macroeconomic shock therapy prescriptions in the former Soviet economies. Abruptly dismantling the state’s social safety nets at the time to conform with a high-level liberalization model devastated all and the smallest economies most severely. Curiously, some of those earlier guarantees are now resurrected in the advanced economies as necessary policies in healthcare, employment, education, and other sectors.

The true lesson of the COVID-19 pandemic is the acceptance of the complex plurality of the nuanced workable tactics. Pragmatism of survival requires sober appreciation for the local context specific mix of operational discipline, gradual change, and a responsible economic role of the state as a guarantor of social stability. This is coupled with a critical ability to learn from the past, one’s own and that of the others.

The post-pandemic world is often described as the one of greater international cooperation driven by emerging technologies. Perhaps, the future will be such. But there is no time to wait, for the global cooperative frameworks rooted in diversity of successful policy and institutional approaches are needed today to avert the growing common economic and social disasters. That would be prudent, if we are to learn from this uniquely global crisis.


Back in 2003 Branko Milanovic wrote a curious paper titled Globalization and Goals: Does Soccer Show the Way (which came out in 2006 in the Review of International Political Economy)?

The paper shows how soccer (hmm, football) is a truly global sport that is accessible to all and with positive externalities for the global poor. Consider for example the fact that some of the greatest footballers come from modest backgrounds and developing countries.

There’s more in the paper and everyone should read it, but follow the link below for a draft of a presentation we are reviewing with students that we’ve put together on some of the tangible examples (beyond sports) of the greatest players contributing back to their communities and more: we have here Pele, Sadio Mané, Christiano Ronaldo, Lionel Messi, Marcus Rashford , Juan Mata, Mohamed Salah, and couple of American footballers: Travis Kelce and Russell Wilson…

Hopefully more to come but here’s what have so far –> click here for PDF to open.

COVID-19 economic policy response in Transition Economies

Based on the available data, and mainly the IMF’s Policy Response Tracker, we’ve summarized some of the key economic policy measures implemented to-date across a select group of small (or very small) open post-socialist economies of Central and Eastern Europe and former Soviet Union. As new data become available we will try to keep this updated. See footnotes and data description below the table.


I was asked to comment on Armenia’s employment by industry, here’s what we find in the Armstat data. What’s happening with agriculture?

Note the 2018 data is in thousands, the rest are actuals as per ArmStat’s files

[since few will scroll down] data sources are


Dec 2019

April 2020

June 2020

Employed Persons by Types of Economic Activity

CODE INDUSTRY 2018 (in ‘000s) DEC 2019 APRIL 2020 JUNE 2020 2018 DEC 2019 APRIL 2020 JUNE 2020
A Agriculture, forestry and
266.2 8,195.0 7,367.0 10,502.0 25.4% 1.3% 1.3% 1.7%
B Mining and quarrying 9.1 10,483.0 10,239.0 10,891.0 0.9% 1.7% 1.8% 1.7%
C Manufacturing 104.1 72,296.0 70,091.0 77,333.0 9.9% 11.5% 12.1% 12.2%
D Electricity, gas, steam and
air conditioning supply
21.5 20,750.0 20,274.0 20,624.0 2.1% 3.3% 3.5% 3.3%
E Water supply; sewerage,
waste management and
remediation activities
3.7 6,384.0 6,412.0 6,747.0 0.4% 1.0% 1.1% 1.1%
F Construction 98.4 22,102.0 19,039.0 23,348.0 9.4% 3.5% 3.3% 3.7%
G Wholesale and retail trade;
repair of motor vehicles and
119.1 107,171.0 98,579.0 109,479.0 11.4% 17.1% 17.0% 17.3%
H Transportation and storage 45.5 21,157.0 19,332.0 20,088.0 4.3% 3.4% 3.3% 3.2%
I Accommodation and food
service activities
26.3 29,441.0 20,143.0 25,593.0 2.5% 4.7% 3.5% 4.0%
J Information and
21.0 25,516.0 23,924.0 26,371.0 2.0% 4.1% 4.1% 4.2%
of which: Information Technology 13,204.0 13,334.0 14,431.0 2.1% 2.3% 2.3%
K Financial and insurance
14.6 22,143.0 19,914.0 21,643.0 1.4% 3.5% 3.4% 3.4%
L Real estate activities 2.4 8,422.0 7,532.0 8,767.0 0.2% 1.3% 1.3% 1.4%
M Professional, scientific and
technical activities
14.8 22,109.0 19,035.0 21,230.0 1.4% 3.5% 3.3% 3.4%
N Administrative and support
service activities
4.3 15,144.0 13,891.0 16,043.0 0.4% 2.4% 2.4% 2.5%
O Public administration and
defence; compulsory social
90.7 38,437.0 35,244.0 37,184.0 8.7% 6.1% 6.1% 5.9%
P Education 105.6 114,543.0 110,427.0 110,668.0 10.1% 18.2% 19.1% 17.5%
Q Human health and social
work activities
46.2 46,842.0 43,763.0 47,400.0 4.4% 7.5% 7.6% 7.5%
R Arts, entertainment and
16.6 18,737.0 17,177.0 17,860.0 1.6% 3.0% 3.0% 2.8%
S Other service activities 30.9 17,959.0 16,104.0 20,933.0 2.9% 2.9% 2.8% 3.3%
T Activities of households as
4.1 0.4% 0.0% 0.0% 0.0%
U Activities of extraterritorial
3.3 0.3% 0.0% 0.0% 0.0%
TOTAL 1,048.4 627,831.0 578,487.0 632,704.0 100% 100% 100% 100%

Pakistan’s diaspora bond

A comment on recent diaspora bond interest.

The article by Farhan Bokhari on the diaspora bonds by Pakistan, while bringing much needed attention to the potential of national diasporas, cites $21bln in remittances sent by Pakistanis abroad to their families back home. Unfortunately, this just repeats a common misunderstanding of diaspora, its potential, and possible success of a diaspora bond.

Unfortunately, temporary migrant workers who send the remittances can hardly pass for the larger financial donors needed for a successful bond issue. As such remittances flows cannot  be the sole determinant of the diaspora bond’s success.

By definition, remittances are individualistic going from a sender to a very specific family. These transfers are motivated by the specific household’s needs and working migrant’s abilities to generate sufficient earnings. A diaspora bond is a more complex international capital markets instrument requiring a long-term investment with bond prices significantly above typical labor migrant’s transfer to family. Of course, if a government issuing a diaspora bond can overcome these limitations it may still tap into this new diaspora made up of migrants.

However, in a probable successful scenario the key investors would be composed of the old diaspora, i.e. those with the sense of ethnic belonging but integrated in the host society on a more solid footing by either income or generations of expat life.

There are other proposals for engaging labor migrants’ potential, which should not go undiscovered, including a Migration Development Bank (as we propose here and a shorter write up here). This is true for Pakistan and others with large diaspora, including the post-socialist economies of Eastern Europe and former Soviet Union.

Aleksandr V. Gevorkyan //

The tunes of economic change or why ‘transformation’ and not ‘transition’ in the post-socialist transition economies

by Aleksandr V. Gevorkyan

The aim by itself is a lifeless universal . . .; and the bare result is the corpse which has left the
guiding tendency behind it.
Georg Wilhelm Friedrich Hegel, Phenomenology of Spirit

The 2009 film, How The Beatles Rocked the Kremlin, documented forbidden music’s cultural influence across Eastern Europe (EE) and former Soviet Union (FSU) through 1970-1980s. By early 1990s what captured the minds was the Scorpions’ ballad, Wind of Change.

This “wind” was that of hopeful future, push for national independence, and promise of economic prosperity. By 1992, the disintegration of the socialist economy system brought chaos across newly independent nation-states in Europe, the Caucasus, and Central Asia.

Ironically, the most onerous economic plan was the EE’s & FSU’s transition from planned economy to romanticized free market. Yet, despite the independence premium in national policy and evidence suggesting recent strong economic growth, post-socialist societies are still to achieve the ideals of those reforms.

The EE and FSU collectively represented up to 15 percent of the world’s economy in the 1980s. By 2016, they represented 6 percent of the global economy. Russia, the largest in the group, averaged 3 percent, with the  remainder going to the smaller FSU and EE economies (according to The Conference Board’s Total Economy Database).

Post-World War II societies in the EE saw massive industrial growth. Their relatively loose controls, trade links with Western Europe, and sustained private agriculture was distinct from the FSU-like socialism. By the early 1980s the socialist economic model began to show signs of structural weakness as productivity declined worsening the competitiveness of the EE’s semi-open economies. Tamás Vonyo (2017) offers new empirical evidence suggesting that by then the declining investment, despite tapping international capital markets, in industrial and technological upgrades, largely caused the inefficiency.

By the early 1990s more tangible changes replaced political announcements. Social costs were deemed to be collaterally minor as opposed to a greater goal of market prosperity (an odd parallel to the spirit of the socialist past). Those EE & FSU economies with significant dependence on the socialist common market, the Council for Mutual Economic Assistance, suffered the worst macroeconomic and social impacts in the “transition.”

Through mid 1990s life expectancy dropped, the system of state-provided basic healthcare services, education, and other social support collapsed as unemployment skyrocketed with state-funded enterprises shutting down and hyperinflation pushing some into barter, income and wealth inequalities climbed up. In his 2009 book From the Soviet Bloc to the European Union, Ivan Berend voiced reservations over the haste to declare absolute victory [of “transition”], citing population displacement and emerging social pressures, unintentionally masked by the economic growth often dependent on the integration within EU’s supply chain.

What has emerged out of the ruins of the formerly socialist system is often termed as “varieties of capitalism.” Echoes of the dreadful privatization have shaped modern institutional structures across the region. Recent data suggest that only a handful of countries reached the 1989 per capita income levels as of 2000. Income inequality, social polarization, as measured in World Bank data, has become far too pronounced. Questions about transparent governance, sustainable spending, rise of populist movements, inconsistencies in judicial reform and, in the EE’s deviations from the European Union’s general principles, and other examples seem to be at odds with the melody of change some three decades ago.

The smaller is the country the greater is the challenge of sustaining broader economic activity, attracting competitive foreign direct investment, avoiding underdevelopment, and securing social inclusion; all without falling into dependence on the earlier mentioned expatriate remittances or debt pile-up. This has been highlighted in recent studies on transitional periphery, as those smaller economies are often identified in literature.

Objectively, today, the post-socialist societies are deeply transformed culturally, politically, and in economic terms and continue to evolve. Yet this transformation and its eventual outcomes are firmly connected with the legacies of the socialist era and intensity of the 1990s turbulent variants of the reforms.

Perhaps, a more evolutionary approach to macroeconomic and public policy of the 1990s may have proven to be more prudent.

We will never know.

However, how the ‘transition economies’ learn and interpret this complex collective history in their present conditions will shape their individual future. That is, also, why there is a need to objectively accept the past and pragmatically seek balance in the present.


Dr. Aleksandr V. Gevorkyan is the author of Transition Economies: Transformation, Development, and Society in Eastern Europe and the Former Soviet Union  and Associate Professor of Economics at the Department of Economics and Finance of the Peter J. Tobin College of Business at St. John’s University.



Some quick (and really rough) notes on the #DiasporaBond idea that’s been discussed recently. The notes are based on my 2008 paper  & other sources (see below). The essential reading is Chander (2001). These are draft notes outlining general principles and more certainly can (should) be added.

Aleksandr V. Gevorkyan (July 31, 2018), updated Nov 22, 2020

  • DiasporaBond – a financial security / debt instrument, by which a country borrows from its expatriate (diaspora) community (affiliated by ethnic, religious, cultural, or other characteristics).
  • BENEFIT-1: a small economy with large diaspora is able to tap into international capital markets, otherwise closed off to the country or outcompeted by similar emerging / frontier markets – assumes a foreign currency bond.
  • BENEFIT-2: borrowing at patriotic discount, i.e. borrowing at interest rates lower than would be borrowing in a competitive.
    • Often, the only practical aspect many advocates argue (but must look beyond it).
    • The reason: “diaspora” is assumed to be more altruistic in its intentions towards historical homeland and is willing to buy-in at a discount driven by patriotic motives
  • BENEFIT-3: potentially a substantial economic development booster
  • BENEFIT-4: can be issued as a local currency bond, potentially attracting a new type of foreign (non-resident) investors (the diaspora), opening up the domestic public debt market to the generic foreign investors (“diaspora first mover” argument).
  • BENEFIT-5: issued as a conventional bond but marketed as a diaspora –> motivating  the above — key aspect “potentiality”

And some points to “consider”:

  • As a capital market instrument with longer maturity than short-term loans, DiasporaBonds are best to finance long-term projects
    • infrastructure (for prosaic reasons, roads, sewers, water supplies, energy); education & healthcare (building new facilities, revamping existing); capital financing for new residential development; capital financing for new industrial sectors / techno parks development
  • DiasporaBond is non-inflationary, this means it is not intended as consumer or business credit facility
    • Unless, of course, a host of serious macroeconomic conditionality measures and strict checks/balances system are enforced.
  • On the latter point, conditions are appropriate as DiasporaBond financing would normally go towards areas in the national economy otherwise not appealing to a committed global investor.
  • Regulation: with all the usual players in place (Min Finance, Central Bank, investment bankers, etc), there perhaps should also be a State – Diaspora Supervisory Board in some form – as an oversight, bringing Diaspora expertise, and advisory group – with a clearly defined (and limited) mandate.
  • WHO-1: DiasporaBond cannot  solely target labor migrants (or recent expatriates).
    • Trends in remittances transfers are not indicative of the diaspora’s interest in purchasing a long-term sovereign bond at a discount rate with unspecified risks of repayment
  • WHO-2: Part of the DiasporaBond program’s success would be conditioned on availability of range of options for members of the “old” and the “new” diaspora in a range of denominations
  • ESSENTIAL: work with the diaspora – two sides must take each other seriously
  • WHERE: a DiasporaBond program requires clear identification of the applicable jurisdiction for any disputes and any other obligations to lender/borrower
  • DiasporaBond Exchange Program—may help individual investor to donate their bonds as charitable contributions to school, universities, hospitals, etc as a way of boosting endowments of the latter. Additionally, an exchange mechanism may be created to facilitate further financial market deepening.
  • Reaching beyond altruistic diaspora with the DiasporaBond requires solid presence in the international financial markets, macroeconomic and institutional predictability.
  • DiasporaBond may[!] lead to initiation of more stable large scale capital funding for a small open economy from a more diverse investor pool.
  • DiasporaBond is not a guaranteed success. Promoting and competing for diaspora investment interest requires massive dedicated effort and soft-capital concentration.


A migration development bank that works

There are two critical factors to the contemporary phase of global labor migration: diaspora and remittances (small foreign currency transfers from host to home economies). Both can be the forces contributing to and fostering macroeconomic development in (usually) structurally weaker home (sender) economies.The way to do it?

In a recent essay entitled “Toward a Migration Development Bank for Transition Economies” Otaviano Canuto and I try to rationalize some optimal solutions. Continue reading

The legends of the Caucasus…

In a recent paper, in the International Business Review, entitled “The Legends of the Caucasus: Economic Transformation of Armenia and Georgia”  I attempt to evaluate the past two decades of macroeconomic, business, and institutional transformation in the two small open economies.

All standard clarifications on the imperfections of the post-socialist transition aside, I argue, that the two are open to international business that follows the local context.

Continue reading