|Author: Armine Petrosyan|
|Affiliation: UCL School of Slavonic and East European Studies|
Original text: Armine Petrosyan, alumnae of the UCL School of Slavonic and East European Studies, UK
KhTsB (pronounced as kh-ts- b, ԽԾԲ in Armenian) is an abbreviation for an acronym for khnami (in-laws), tsanot (acquaintance, friend of a friend), and barekam (relative) and stands for the use of all social contacts available for solving problems and getting things done, from stronger (relatives) to weaker ties (acquaintances). Blat in Russia and guanxi in China may be considered as an analogous practice to KhTsB in Armenia. The impact on different aspects of social and economic life of the practice in Armenia has not yet been thoroughly investigated (although see Harutyunyan 2010, Shakhnazaryan and Shakhnazaryan 2010, Gharagulyan 2011 and Jilozian 2017).
Similar to blat, the abbreviation has emerged in Soviet context and was particularly used in late socialism, under Brezhnev. It denotes Soviet practices of overcoming shortage and refers to a social contract between the state and it citizens, the so-called ‘little deal’ (Millar 1983). Since the collapse of the Soviet Union in 1991, however, such practices remained common in Armenia, but its uses and connotations have changed in the context of (neo)liberal markets, shadow economy and present-day corruption.
One of the ways of measuring the use of social contacts is through surveys and in- depth interviews. I conducted a short online survey among 100 young Armenians (under 35) in 2017 to investigate whether they see it as a means for solving problems or a practice that creates problems provides a general idea about the spread of KhTsB in Armenia and its use.The results of the survey show that KhTsB is a widespread practice in Armenia (55.6 per cent reported that the practice is rather widespread and 37.4 per cent of respondents agreed that it is widespread). No one reported an absence of the practice and only 2 per cent said they never have heard of it.
Suggested by the sample survey, social links in Armenia are most often used in healthcare (46.4 per cent) and in the labour market (37 per cent). Other areas include the repairs on houses, apartments and other property (12.4 per cent) and education (8.3 per cent). While no conclusions can be made on the basis of this sample, this information gives us an initial insight into the standard of living and the effectiveness of state policy in Armenia. While providing citizens with the opportunities for healthy and long life and decent work is stated in governmental policies as the most important goal in, such frequent use of social contacts to access healthcare and employment suggests that citizens are using their own means to tackle the problems the government failed to solve.
The respondents appear to have ambivalent feelings towards KhTsB. 38 per cent found it difficult to answer whether the use of practice in the society creates problems or solves problems for them – 25 per cent believe that KhTsB creates problems for them and for 21 per cent that it solves problems. When given an option to comment about the practice, one person responded that KhTsB indirectly creates problems, another one replied that KhTsB is something terrible, and one of the respondents answered that KhTsB is a problem, when jobs are given to unskilled people because of it, but that it could be effective in a more transparent society.
Employment is one of the areas where social links are used the most in Armenia. Nearly 60 per cent of respondents found a job with the help from their contacts. Moreover, both jobseekers’ and employers’ contacts influenced the job appointment process by providing information and/or influence. In 42.5 per cent of cases appointing the employee was achieved as a result of information passed on by social networks of either the jobseeker (26.3 per cent) or the employer (16.2 per cent). Contacts had also ‘put in a good word’ for the jobseeker in the 16 per cent of the cases. Jobs found through traditional formal channels accounted for only 23.2 per cent of the total responses. Other important aspects to the relationships between contacts and jobseekers remain to be examined, for instance the nature of connections the channels through which information was passed and the factors that facilitated the flow of information through that channels. For example, in IT sector, which is currently one of the fastest growing and most important sectors of Armenia’s economy, current employees are asked to recommend a suitable expert for a new job vacancy and if the referred worker is hired, the referee receives a raise. This hiring practice is used in Google and the IT sector overall, but the main reason behind this practice in Armenia is probably the shortage of qualified experts in IT and the growing demand for them. Here, the use of KhTsB can be shown to have an impact on the rates of wages. Therefore, the use of contacts in the job market may not only have non-monetary but also monetary effects.
There is no evidence of direct monetary effects of using contacts on wages in empirical studies (Granovetter 1995, Mouw 2003), although studies suggested that they can affect wages indirectly via reservation wage (Montgomery 1992). Reservation wage is the minimum wage rate at which job seeker will be willing to accept the job offer. Individuals with more contacts can expect to receive more job offers, which increases their reservation wage and consequently also their realized wage. But even if the monetary effects of the use of social networks in labour market is less likely, its non-monetary effect can be significant (Franzen and Hangartner 2006). The network members who pass on information about job vacancies are most likely well informed about education and qualifications of jobseekers and will offer jobs which they believe would be a good match for the worker. Hence jobs found through social contacts can have higher educational adequacy than those found without them. However, the broader literature on the impacts of the use of social contacts on the labour market tends to be based on empirical studies carried out in economically developed countries. High unemployment rates, business cycles, economic situations or structure of employment specific for less developed countries, such as Armenia, may shape the labour market in different ways and the effects of the use of social networks during the times with high unemployment may be significant.
Labour is but one channel through which the use of social contacts affects the economy and citizens’ lives. Other areas also deserve the attention of scholars and institutions responsible for policymaking.
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