4.5. Globalization and its Effects in Armenia

Globalization as a growing worldwide interaction of processes and mutual influences has currently become one of the most remarkable recent phenomena. Having developed over the last decades, thanks to the availability of means of transportation and communication, and due to the unprecedented growth of transcontinental movement of capital and the decrease of interstate obstacles, globalization is acquiring more and more realistic contours. Currently, globalization tends to manifest itself in almost all spheres of life: economic, political, social, cultural and ecological. It is necessary to note that globalization as such, the degree of its proliferation and the consequences of its impact are viewed differently by various theoreticians. Two of the possible impacts of globalization on Armenia are briefly discussed below.

Economy. Free movement of capital and goods worldwide reduces the influence of national governments on economic activities, and increases the dependence on large international financial centers and trans-national corporations. Having adopted the policy of open-door market economy and a very liberal regime of foreign trade, Armenia could not help participating in these processes.

Armenia's integration into worldwide markets is inevitable because of its very small domestic market. Furthermore, the economy can develop only in conditions of intensive exportation. On the other hand, Armenia's domestic financial and material resources are too limited to provide sustainable development. Consequently, Armenia must inevitably conduct an "open-door policy".

A liberal foreign trade regime causes new problems. First, a significant stratum of domestic producers is expelled from the market because of higher quality or cheaper goods, which has a two-pronged effect: on the one hand, the impact of low-quality goods is reduced, on the other hand, unemployment grows. Second, the country finds itself significantly dependent on external factors and the country's economic success can be endangered by the economic difficulties of its key partners. This factor so far plays a small part in Armenia since up to date foreign investment has been quite insignificant (about 10% of GDP). That is why the 1997 Asian crisis hardly affected Armenia. The economic impact of the 1998 crisis in Russia, Armenia's largest economic partner, was more painful.

Armenia is not insured against upheavals in the future either, and it needs a system of measures able to prevent emerging dangers related to the global capital inflow into Armenia. Amongst the most obvious it is worth mentioning the diversification of economic ties, i.e. enlarging the circle of partners as much as possible and avoiding a lopsided development of the economy.

Culture. One can think of culture as the glue that binds people together and enables them to interact. At another level the glue provided by cultures makes Human Development and economic growth possible and is seen as a "human software"¹.

Armenians, as any small nation, face the problem of preservation of their cultural identity and presenting their age-old culture to other nations. The Republic of Armenia is making its first steps under post-Soviet conditions to regulate its cultural policy. The former methods for supporting culture cannot be applied, due to a lack of funding, while the widespread methods of promoting cultural patronage have not been adopted so far.

The commencement of Armenia's own satellite TV broadcasting was obviously a necessary measure, making use of globalization opportunities in bringing cultures into closer and more frequent contact. The celebration of the 1700^th anniversary of the adoption of Christianity as Armenia's state religion can significantly contribute to this process. The programmatic and purposeful application of the joint potential of Armenia and the Armenian Diaspora will play a decisive role in the promotion of our cultural identity.