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Who is the Poorest in the World? CIS Countries Are on the List
July 12, 2011 14:52


The Forbes magazine has made a ranking of countries with bad economies. This is a real revolution: this year a list of ten countries includes three representatives of the Commonwealth of Independent States. Residents of Armenia, Ukraine and  Kyrgyzstan will be very surprised to know that their economies can't stand comparison with Swaziland or Nicaragua. 
 
The Moscow-based news resource Lenta.ru says, that the methodology of ranking by Forbes magazine raises many questions. The resource notes, that the name of the ranking "The World's Worst Economies" is not clear, as the word "worst" is an appraisal word, it shouldn't be used in a ranking that claims to be objective. 
 
What means the "worst" economy? It's a combination of several factors: high inflation, lower GDP growth, the smallest GDP per capita and a negative trade balance. The ranking of the magazine is based on data from the International Monetary Fund, an information for the three past years and 2012 forecasts. Lenta.ru supposes, that this may cause a distorted picture of world's economies, as the research of the IMF was made in March, 2011, but since that time a lot of things have changed, for example, a devalvation in Belarus, which led to a jump in inflation and an impoverishment of the population.
In addition, Lenta.ru notes, that all the indicators are not reduced to a common denominator, this causes a misunderstanding of the distribution of the places in the ranking. Thus, Armenia was ranked second in this rating, having an index of 3000 dollars per-capita GDP and an inflation at 7%. "With a mediocre growth forecast for the next few years, this landlocked former Soviet republic, dependent upon Russia and Iran for virtually all of its energy supplies, is struggling to keep up with the rest of the world", says Forbes. At the same time Lenta notes, that Guinea was ranked the third, although per-capits GDP in this country is nearly seven times smaller and inflation is running at several points higher. 
 
The appearance of Armenia in the ranking of The World's Worst Economies may seem surprising. In the ranking of economic freedom in 2010 the country won 38th place (the third result after other former USSR countries), in the ranking of the corruption countries Armenia was better than Russia and Belarus. Nevertheless, the crisis has exposed massive problems in the economy of Armenia. In addition, the country is in an incredible dependence on Russia. According to the Forbes, "Russia cut back on supplies of diamonds, hurting Armenia’s once-thriving diamond-processing industry".
Touching Ukraine, it may be noted, that the country suffered a lot from the financial crisis and it is dependent on supplies of raw materials from Russia. The economy of the state has difficulties (corruption and poor judicial system). However, Ukraine is situated between Russia and Europe and earns from transit. The country also is a major market for European goods and it is a tourist center of the CIS. 
 
The columnists of Forbes say they've analyzed the situation in 177 countries of the world, but only 10 entered the top of the worst. 
 
The first place took Madagascar. Ukraine is number four. According to the Forbes, the country "has rich farmland and generous mineral resources and could become a leading European economy — yet per-capita GDP trails far behind even countries like Serbia and Bulgaria".
 
 
 

Author: Ksenia Dzhalagonia

Tags: Russian economy     

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