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Armenian Prime Minister Praises Growth In IT Sector

Armenian Prime Minister Tigran Sargsian speaks at Yerevan State University on July 13.

Armenian Prime Minister Tigran Sargsian speaks at Yerevan State University on July 13.

YEREVAN -- Armenian Prime Minister Tigran Sarkisian says information technology (IT) has become a major sector of the country's economy and will continue to grow strongly in the coming years, RFE/RL's Armenian Service reports.

Sarkisian said on July 13 during a speech at Yerevan State University that IT firms generate approximately 5 percent of Armenia's gross domestic product (GDP).

"So the IT sector is now on a par with our mining-metallurgical industry," he said. "The number of people employed by the two sectors is roughly the same: about 5,000. But wages in the IT sector are much higher and so is the pace of its growth."

Sarkisian said promoting IT was a "priority" and he would "do everything to increase the economy's share of this sector."

Successive Armenian governments have declared the sector's development a top economic priority. But it was for years hampered by a legal monopoly on telecommunication services enjoyed by the ArmenTel national telephone operator.

The monopoly was lifted five years ago.

Much of the IT sector's development since then has been driven by a rapid spread of Internet access in the country. Increased competition between local Internet providers has also improved the quality and lowered the cost of Internet service.

According to government data, the number of broadband Internet users rose by almost 36 percent to 235,000 in the first quarter of this year.

Only some 70,000 Armenians had access to a relatively high-speed Internet connection as of late 2009.

IT products accounted for an estimated 8.5 percent of Armenia's exports last year, up from 3.6 percent reported in 2009.

Much of the IT exports are generated by Armenian subsidiaries of California-based software-development companies.

Last December, the World Bank provided Armenia with a $24 million loan designed to foster enterprise innovation and the spread of IT.

The bank said the loan would be used for improving Armenians' access to affordable computers and high-speed Internet connections as well as helping local businesses to authenticate electronic transactions.

The Armenian government will contribute $6 million of its own resources toward the project.