Home The Washington Diplomat June 2016 A year into Ukraine war, Armenia reaps benefits of Russian IT influx

A year into Ukraine war, Armenia reaps benefits of Russian IT influx

A year into Ukraine war, Armenia reaps benefits of Russian IT influx
University-level students take a programming course at the Synopsys Armenia campus in Yerevan. (Photo by Larry Luxner)

YEREVAN, Armenia — Igor Volkov and Alexander Popov, both 36, are software developers from St. Petersburg, Russia. But shortly after their country invaded Ukraine a year ago, the two men decided it was time to pack up and leave.

Both ended up in Yerevan, where they have their own colorful cubicles at DataArt—a freewheeling, New York-based IT outsourcing firm that develops apps for companies in the healthcare, insurance and travel industries.

They’re among at least 150,000 Russian professionals, and maybe more, who have fled to nearby Armenia, often with their families, since the war broke out on Feb. 24, 2022. Recently, the Washington Post, quoting preliminary data, reported that “at least 500,000, and perhaps nearly 1 million, have left [Russia] in the year since the invasion—a tidal wave on scale with emigration following the 1917 Bolshevik Revolution and the Soviet Union’s collapse in 1991.”

By the Kremlin’s own admission, 10% of all Russian IT workers abandoned their country in the face of Vladimir Putin’s war against Ukraine—a catastrophe that seems to have no end in sight. But Russia’s loss is Armenia’s gain. This mountainous, Maryland-sized former Soviet republic of 3 million—an imperfect but lively democracy with an ancient alphabet and a fledgling tech sector—has benefitted handsomely from Russia’s brain drain.

Teenage girls edit images on Mac displays at TUMO International, a Yerevan-based educational nonprofit that runs a network of computer learning centers. (Photo by Larry Luxner)

For one thing, the influx helped push Armenia’s GDP growth to nearly 13% last year, even as the country remains mired in a simmering violent conflict of its own with neighboring Azerbaijan. Meanwhile, Armenian exports to Russia tripled to $2 billion in 2022 compared to a year earlier, and remittances in the other direction quadrupled to $3.2 billion.

In addition, Russian citizens need only a national ID to travel to Armenia, with up to 10 flights operating daily between Moscow and Yerevan’s Zvartnots International Airport. And most importantly, digital nomads and “online gypsies” can freely receive money from abroad in Armenia, which is no longer possible in Russia due to international sanctions.

Russian IT firms relocate to Armenia en masse

Some of these new arrivals have since left, but “those who stayed are overwhelmingly IT people,” said Arman Akopian, Armenia’s ambassador to Israel. “They came with a lot of money. It was unprecedented. We’ve never seen this kind of growth before.”

Popov, a back-end developer living here alone, chose Armenia over his two other options—Kazakhstan and Serbia—even though he admittedly knows very little about his adopted country.

From left: Igor Volkov, 36; Sergey Kurazhev, 24; and Alexander Popov, 36, fled their native Russia after the invasion of Ukraine a year ago. All three software developers now live in Yerevan, where they work for the Armenian branch of New York-based IT consultancy DataArt. (Photo by Abel Simonyan)

“I wanted to avoid war risks while keeping my current job, even though I didn’t feel any immediate threat,” he said. “Here, everything is warm and friendly.”

Volkov, a solutions architect, resettled in the Armenian capital with his wife, a psychologist, and their 3-year-old son, on one of the first flights organized by his company out of Russia.

“There’s no cultural gap at all here, and Yerevan is cozier than St. Petersburg. People are very attentive to each other,” Volkov said, though he added that taxes are higher in Armenia, and everything costs more. “Back home, I was paying $500 a month rent, but here it’s $1,200—and I was lucky because I signed a one-year lease, before prices got insane.”

Drawn by the ease of doing business here and eager to avoid sanctions, about 1,300 Russian companies have relocated here in just in the past 12 months, says Armen Baldryan, president of Armenia’s Union of Employers of Information and Communication Technologies (UEICT).

Pedestrians walk by Russian-language posters on a busy street in Yerevan. More than 100,000 Russians have flooded Armenia since the Ukraine war began a year ago. (Photo by Larry Luxner)

IT now represents 20% of Armenian economy

They’re also lured here by Armenia’s long-established reputation as the “Silicon Valley of the Caucasus.” During Soviet times, each of the three Caucasus republics excelled at something: Georgia in tourism, Azerbaijan in oil and gas, and Armenia in computers. In fact, it was at the Yerevan Research Institute of Mathematical Machines where Soviet scientists constructed the USSR’s first computer, Nairi, in 1964.

“It’s interesting that all three countries have continued on the same path. We inherited these patterns, and today, IT is about 20% of Armenia’s economy,” said Akopian, whose country reported a total GDP last year of around $21 billion.

Since its establishment in 2015, about 100 companies have joined UEICT, including US-based multinationals like Synopsys, Optym and Cisco. The council’s stated mission is to improve Armenia’s business environment through legislation and better education—specifically in science, technology, engineering and math (STEM).

Armen Baldryan, president of Armenia’s Union of Employers of Information and Communication Technologies (UEICT) in Yerevan. (Photo by Larry Luxner)

“International companies in Russia have relocated their offices to Armenia because of the sanctions. So have Russian companies actively working with US or European clients—as well as those working for the Russian market—for the same reason,” said Baldryan, interviewed at his office on the seventh floor of the Polytechnic University of Armenia.

“Ten years ago, this was a low-cost destination, but salaries have increased since then,” he said, with the average IT worker now earning $3,000 a month. “Even so, the same engineer in the US will earn maybe three times as much.”

DataArt welcomes Russians into its high-tech family

One of those companies hiring Russians is DataArt, which in 2019 set up its gleaming Yerevan branch with four staffers. Today it has 550 and plans to reach 1,000 in the next few years, says the company’s local human resources manager, Lilit Papikyan.

“IT is a blossoming field of our economy. It brings lots of money to Armenia,” she explained while taking this reporter on a tour of the operations, where DataArt employees enjoy a hybrid working culture—two days from home, three days from the office. “Since the war began, around 250 of our employees relocated here from Russia, where we no longer have the right to operate, because we’re a US-based company.”

Electric scooters are lined up for rental across from Armenia’s Golden Palace Hotel Yerevan. (Photo by Larry Luxner)

Another 250 Russians initially came to Armenia but since moved on to other DataArt locations such as Bulgaria, Poland, Romania and Serbia.

“We can’t say they’re making more money,” she said of the Russian newcomers, “but they’re safe here—and mostly happy.”

Among the largest multinationals in Yerevan is Synopsys, a $5 billion IT conglomerate with 19,000 employees, 3,386 patents and 125 offices worldwide.

Synopsys—a leader in silicon chip electronic design, verification and software security—came to Armenia back in 2004 and hired 129 workers. Today it boasts a staff of 1,200 at a six-building campus in Yerevan that during Soviet times was a factory producing elevators and transistors. A veritable corporate history unfolds in a series of black-and-white photos that decorate the foyer of the main building’s glass entrance.

Coffee break room at Synopsys Armenia, one of the country’s largest IT employers. (Photo by Larry Luxner)

Synopsys cultivates talent at home

“Armenia is very important for Synopsys, accounting for 8% of the company’s R&D,” said Vazgen Melikyan, director of university programs at the Synopsys Armenia Educational Department. The company, based in Mountain View, Calif., also collaborates with many higher learning institutions worldwide. Since 2004, the department Melikyan heads has awarded 1,188 bachelor’s degrees, 972 master’s degrees and 71 PhD’s.

Synopsys cherry-picks the best students from two local institutions—the National Polytechnic University of Armenia and Yerevan State University—to enroll for their last two years of the bachelor’s program and first two years of graduate studies. At the moment, 61% of the engineers at Synopsys Armenia are graduates of this program.

“Many high-quality Russian specialists have come to Armenia. But there’s a risk they’re just waiting for the situation to stabilize back home,” said Hripsime Hakobyan, an engineering manager at Synopsys.

She added that Synopsys alone has hired about 100 Russian specialists, and that “we see they don’t feel cautious about what they’re saying. It’s a great liberty. Some of them have decided to stay just for that reason.”

The Cascade, a giant stairway made of limestone and constructed in 1971, is a major landmark in Yerevan, Armenia. (Photo by Larry Luxner)

In fact, Volkov—the software programmer at DataArt, said that one day, he’d like to return to Russia, where he has an apartment under construction and a mortgage to pay off. “My kid speaks only Russian. I don’t want to go to Europe or the US,” he said.

TUMO Armenia: Leading the way forward

For a glimpse of Armenia’s tech future, one need look no further than Yerevan’s TUMO Center for Creative Technologies, a multistory learning center with 750 workstations and simultaneous classes in everything from robotics and animation to music and advanced software programming. Some 15,000 teen geeks use the facility weekly, and there are nearly 4,000 more on the waiting list, with the typical wait lasting three months.

The appeal is obvious: many Armenian kids simply don’t have internet access outside the main cities of Yerevan, Gyumri, Diligan and Stapenkert. For that reason, TUMO is currently raising $50 million to build the infrastructure to expand its network from the current four to 16 centers, as well as 110 “TUMO boxes” that basically consist of three repurposed shipping containers welded together. These “boxes” will be deployed in rural villages and are aimed at reaching all of Armenia’s estimated 80,000 teenagers.

Teenage boys build robots as part of a workshop at TUMO International, a Yerevan-based educational nonprofit that runs a network of computer learning centers. (Photo by Larry Luxner)

But TUMO doesn’t plan on stopping there. It plans a network of computer learning centers not only throughout Armenia but also in Albania, France, Germany, Lebanon, Russia, Switzerland and Ukraine—and eventually in the US cities of Los Angeles, Dallas and Pittsburgh.

“Our mission is to innovate the future of learning—putting equitable access to free education at the intersection of technology and design, giving economically disadvantaged families access to this kind of education,” said Chris Shahinian, TUMO’s director of development.

Born in Australia but of Armenian heritage, Shahinian headed business development for the Asia/Pacific unit of American Express for 10 years before joining TUMO and moving back to the homeland.

“People make a lot of comparisons to Israel and Estonia, but 26% of Armenians live under the poverty line, and 2% live in extreme poverty,” he said, adding that “some people argue the influx of Russians has stopped the country from going into stagnation, which is probably true. But I think it’s also good for Armenia from a diversity and economy perspective. How long it will last, we don’t know.”

Larry Luxner

Miami native Larry Luxner, a veteran journalist and photographer, has reported from more than 100 countries in Latin America, Africa, Eastern Europe, the Middle East and Asia for a variety of news outlets. He lived for many years in San Juan, Puerto Rico, and the Washington, D.C., area before relocating to Israel in January 2017. Larry has been news editor of The Washington Diplomat since 2005.