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The State of Business and Economics Education in Armenia Armenian News Network / Groong December 5, 2005 By David Joulfaian Armenia has a long and proud tradition of education and training in mathematics and the sciences, as well as in the arts and music. Given the very same historic legacy, however, Armenia began its independence in 1991 endowed with very few professionals trained in finance, management science, and economics. The absence of such professionals and training institutions has left its marks on the governance and management of the economy, with consequences so deleterious that they raise doubts on whether Armenia will become a fully functioning economy any time soon. (1) The conventional wisdom on the state of scholarship in economics and finance in Armenia is not a positive one. The insights gained from some Armenians in Yerevan, or recent immigrants, in particular those educated in the US, at best portray a dismal picture of the state of education. These are at times joined by non-Armenians who amplify such views. Such impressions are perhaps the byproduct of limited knowledge of the quality of the current educational system. The unflattering views often expressed by some Armenians either reflect a long absence from Armenia or the passing of a number of years since graduation, as well as a total lack of contacts and ties to current faculty and students. I. What Do Business, Economics, and Finance Students Study? It is important to explore what Armenian students are taught prior to addressing or assessing the quality of education in Armenia. The following is the curriculum at Yerevan State University (YSU), both undergraduate and graduate. Bachelor's Degree: In the first year, and focusing on relevant subjects, students take two Calculus courses, two in Analytical Geometry and Linear Algebra, and two Introduction to Economics. In the second year, they take two courses in Probability and Statistics, and one course each in Operations Research, Economic History, Economic Informatics, World Economy, and Economic Geography. In year three, students take courses in Statistics, Firm Economics, International Economics, History of Economic Thought, Microeconomics, Econometrics, Macroeconomics, Business Law, Financial Markets, Accounting and Auditing, Agricultural Economics. And in year four, they take Finance, Banking, Labor Economics, Management, Marketing, Service Industry Economics, and Governmental Regulation of Economy. There are also some mini courses and term papers that may vary by specialization. These are in addition to a number of other courses unrelated to the field such as history and foreign languages, among others. Total enrollment is about 1,100 students. Master's Degree: The Master's degree offers six specializations. These are (1) Theory of Economics, (2) Simulation of Economy, (3) Management Information Systems, (4) Economic Policy and Business Management (MBA is a more appropriate title), (5) Finance, and (6) International Trade. Total enrollment is about 200. All students enrolled in the Master's program are required to take courses titled Current Issues (field specific), Public Management, International Economic Systems, Concept of Human Development, Econometrics, Non-Banking Financial Industry, and write a Master's thesis. Additional courses, tailored to the field of specialization, include: 1. Theory of Economics Transition economics, History of Armenian Economic Thought, Theory of Human Capital, Theory of Welfare Economics, Business Law, General Economics, Armenian Migration Issues, Social and Economic Reforms in Armenia, Theory of Economic and Political Risk, Psychological Economics, Development Economics, Firm Theory, and Financial Relations in Transition Economy. 2. Simulation of Economy Simulation of Microeconomic Processes, Production and Operations Management, Application Techniques of Evaluation Theory, Investment Theory, Econometric Methods of Financial Activities Analysis, Multidimensional Statistical Analysis, Simulation of Foreign Economic Relations, Simulation of Macroeconomic Processes, Game Theory, and Management Information Systems. 3. Management Information Systems Management Information Systems, Modeling of Financial Decisions of Firm Management, Data Communication, Networks and Information Economics, Database Analysis and Design, Networks Administration, Modeling of Financial Decisions of Firm Management, Project Management, and E-Business. 4. Economic Policy and Business Management Production Management, Personnel Management, Psychology of Management, Financial Management, Innovations Management, Marketing Analysis, Assessment of Intellectual Property, Flow of Funds Management, Public Income Management, Strategic Management, Corporate Management, Risk Management Insurance, and Bank Management. 5. Finance Corporate Finance, Banking Management, Budgeting, Financial Analysis, Monetary Policy, Fiscal Policy, Bank Accounting and Audit, Investment Policy, and Risk Management and Insurance. 6. International Trade International Trade, International Finance, International Management, World Trade Organization, International Financial Institutions, International Financial Operations, International Marketing, Foreign Trade Financing, Flow of Funds Management, International Business Organization, and Foreign Investment. Ph.D. and DBA Degrees: The degree of Doctor of Philosophy (Ph.D.) in Economics or in Finance, as well as the Doctor in Business Administration (DBA) do not exist. In addition, no courses are offered beyond the Master's degree. Instead, students are awarded the title of Candidate (teknatsu) of Science after completing the Master's program, and passing exams in philosophy, general economics, and their field.(2) They are also required to defend a thesis and have at least three publications. Beyond the Candidate or Teknatsu, the title of Doctor of Science is awarded after publishing three articles in international journals and ten articles in domestic journals, in addition to completing and defending of dissertation (book). II. A Critical Assessment A cursory examination of the course requirements above is suggestive of the depth of the curriculum and the exposure of students to scholarship in economics, business administration, and finance. It is true that some of the course titles or specializations seem odd, or that the required coursework exceeds what we are accustomed in the US. In a way, one may view the coursework as the equivalent of double and triple majoring in economics, finance, and business majors. With limited employment opportunities, such overload may very well be optimal as students acquire a diverse set of skills. Overall, this curriculum gives an unambiguous indication of the transition to modern teachings. However, it says very little about the content of the courses and the quality of education. One may employ a number of criteria in evaluating and ranking universities and faculty, and the underlying quality of education. This may be done through publication records of faculty, employment placements and the quality of the students, among others. Virtually no research is visible in peer reviewed journals in Economics, Finance, and Management Sciences from any institution in Armenia. Thus, we are unable to evaluate the quality of Armenian institutions through a review of the literature.(3) As an alternative to research by faculty, placement of students can be used in evaluating the quality of education. Employers do care about the competency and qualifications of employees, and are very likely to be sensitive to their training in the hiring decision. Unfortunately, employment opportunities are very limited in Armenia. Again, we are unable to gauge the training and qualification of students, and, by proxy, the quality of the educational system in Armenia. An unconventional approach may require direct interaction with students during their studies. For instance, a visiting scholar may teach an advance course in economics and gauge students' preparedness and training in economic theory. Or, in another example, the visitor may require a term paper and indirectly evaluate their training in statistics and econometrics. Interacting with students also has the added benefit in that they invariably volunteer information on the shortcomings of the coursework and their training in meeting their aspirations. It is the latter approach that I resort to in my evaluation. In October of 2005, I spent three weeks at Yerevan State University teaching Public Finance as a Fulbright Senior Specialist, focusing on the economics of taxation. The course is generally comparable to that taught to mostly seniors in the US, but slightly modified to emphasize the importance of econometric estimation and empirical findings in the literature. The syllabus was structured around Harvey Rosen's textbook of Public Finance, and students were assigned homework problems sets, and a research paper. Classes met Monday through Saturday for a period of three weeks, and lectures were conducted in English without translation into Armenian. The student body included both graduate as well as undergraduate students. The Master's students seemed to be familiar with textbooks authored by Mas-Colell (and Whinston and Green), Romer, and Sargent, authors of textbooks in Microeconomics and Macroeconomics that are also familiar to first year Ph.D. students in the US. This is a clear signal of the progress in transition that Armenia has made. Indeed, most of my students were very comfortable with the microeconomic foundations of public finance. In many ways this is remarkable, given a near total lack of textbooks in Armenia. Indeed, libraries often have only one copy of a textbook available for all students. Some students, those who can afford it, may gain access to Russian translations or older editions. At times, students desperately search online for free resources. Often, however, students may photocopy relevant chapters from the single textbook in the possession of the professor. Software such as Matlab or Mathematica that facilitate the teaching of graduate level economics simply do not exist. Progress is also made in the graduate teaching in quantitative analysis, particularly econometrics, but seemingly at a slower pace than the advances made in theory. The teaching is more at the level of Gujarati and Maddala introductory textbooks, but nevertheless represents much of an improvement over my priors. Indeed, textbook availability in this area seems to be more critical than in other subject. As for the post-Masters students, their training is of an unknown quality and I am not in a position to evaluate it. The absence of course work, however, is striking. In contrast, students in a typical economics Ph.D. program in the US may take up to three courses each in Microeconomics, Macroeconomics, econometrics, in addition to a variety of courses. Students may specialize, and take relevant courses, in Microeconomics, Macroeconomics, Econometrics, International Economics, Finance, Industrial Organization, Public Economics, Urban Economics, Labor Economics, Health Economics, Economic Development, and so on. For the most part, these specializations do not yet formally exist in Armenia. While the preparedness of students and their training in theoretical economics, business administration, and finance, may be quite competitive with that in the US through the Master's program, two shortcomings of the educational system are quite visible to the casual observer. First, internship or cooperative programs, or other mentoring opportunities do not exist in order to provide students with practical experience and training. Second, and perhaps even more critical, is that the (imported) textbooks employed make very little reference to the economic and business activities in Armenia. Students are not likely to be able to draw links between the theory they are taught and the economic reality of Armenia. III. Concluding Comment Judging from the experience of Yerevan State University, Armenia has come a long way since its independence in the teaching of economics, business administration and related fields. YSU undergraduate and Masters students receive an education that is quite competitive, particularly given the limited resources. This is also quite impressive given that faculty compensation is at best a tiny fraction of that enjoyed by their western counterparts. There is little doubt that education in these fields will continue to improve. But there is equally little doubt that this will not happen overnight or anytime soon. Textbook availability, support for research, and training of faculty and students have to be addressed adequately for a timely improvement in scholarship. It should be noted that the evaluation of education in Armenia thus far is viewed from the prism of YSU. Other universities and institutions of higher learning may or may not have made the same progress observed at YSU. Undoubtedly, however, they all suffer from a lack of textbooks, training, and research funding. This is remarkable given that so much technical assistance and training related aid has poured and continues to be poured into Armenia, yet so little of that seems to filter down and benefit students and institutions of higher learning. Footnotes: 1. Armenia's per capita GDP (average income) is about $1,000, or slightly over $3,000 in PPP (adjustment for differences in the cost of living). The latter is less than 10 percent of that of the US. 2. The Candidate of Science is viewed in Armenia as the equivalent to the Ph.D. in the US. 3. Not a single article can be found in EconLit that is published by an Armenian affiliated with an Armenian institution of higher learning. This may mean that research is not visible, and not necessarily not carried out. -- David Joulfaian is a Washington based economist, and may be contacted at email@example.com.