December 15, 2015

Civic Engagement in Local Governance Survey in Armenia

By Caucasus Research Resource Center-Armenia 

On December 11, the Caucasus Research Resource Center (CRRC)-Armenia presented the results of the public opinion survey on civic engagement in local governance.

The survey revealed that the public at large was not well informed on local government related issues. Conducted within the framework of the USAID-funded Civic Engagement in Local Governance (CELoG) project, the survey showed that 87 percent of the respondents were not familiar with the decisions made by their local government bodies, and 91 percent did not know the size of their municipal budget. 73 percent of the respondents knew the head of their community, while 48 percent did not know the members of their local council.

In terms of public attitudes towards and knowledge of the Government of Armenia’s community consolidation and decentralization reforms, the survey revealed that 59 percent of the respondents did not know anything about them, and 47 percent expected that the consolidation would negatively impact their community. Only 24 percent believed that the community consolidation reform would have a positive impact.

Regarding municipal services, only 12 percent of the respondents were satisfied, with 47 percent somewhat satisfied and 36 percent not satisfied with the performance of their local governments. The survey also revealed lack of trust towards and low transparency in local government operations, noting that community members often resort to using personal connections, social status, and at times bribery to resolve their issues.

The nation-wide household survey among 1,500 randomly selected adult respondents examined public awareness of Armenia’s local government system, satisfaction of services provided by the local governments, engagement of citizens in community-related decision-making, as well as public attitudes toward the ongoing community consolidation reform. The study served to establish a baseline for these areas, which will be used to measure future knowledge and behavior change achieved through the CELoG project.  

The survey results are a snapshot of the level of awareness of local governance and citizens’ perceptions about their local governments’ efficiency and accountability vis-à-vis their expectations at the outset of the CELoG project. The results are also of interest for policy makers, experts, local government officials, and international donor organizations.

July 8, 2015

Outlining the perceptions of social assistance programs in Armenia, Georgia and Azerbaijan

(Data analysis is based on “Caucasus Barometer 2013”)

By Arpy Manusyan,
CRRC-Armenia Junior Fellow

After the breakdown of the Soviet Union, followed by a severe social and economy crisis, various social assistance programs were introduced to address the rapidly growing poverty. Social assistance was meant to protect the vulnerable groups unable to integrate into the society and country’s economic system due to some problems (Falkingham J, Vlachantoni A., 2010Maltseva E., 2012). It became evident that social assistance should not only solve short-term problems, reduce poverty threshold, but also act as groundwork for social state. It should be targeted and flexible in responding to various needs of the vulnerable groups. 

Social assistance has many definitions that may vary depending on the scope and purpose of the study. Generally it can be defined as the range of policies and benefits aimed to guarantee the social and economic rights of people based on need and resources (Lunt N., Coyle D.,1996). There are three major approaches toward social assistance: need-based, merit-based, and need and merit-based social assistance . According to the school of need-based social assistance, response to needs is unconditional and is regarded as a social imperative. Merit-based social assistance promotes the idea that assisting the poor on the basis of need may make them dependent and deepen their poverty. The school of need and merit-based social assistance tries to address the weaknesses of one school by the strengths of the other school of thought (Hiruy M., 2009).

Still the need-based social assistance is the dominant model especially in post-Soviet countries. Aimed at supporting the minimum material needs of vulnerable groups, it is not able to respond flexibly to changing situations. Introduced as urgent measures, some of these policies have managed to reduce the poverty, while some other programs have generated and sustained the syndrome of dependency (The Chronic Poverty Report 2008-2009Hanlon, J etal., 2010European Commission’s report on Social Protection and Social Inclusion in Ukraine, 2009). 

Here I would like to comparatively explore the perceptions of social assistance programs in Armenia, Azerbaijan and Georgia based on two interrelated questions that indicate public attitudes towards TSA programs aimed at poor societal layers (“Missing” command is applied to the questions in order to get answers that show levels of agreement):
  1. Do you agree that social assistance should be covering fewer poor families than it does today, and the savings should be used on other public services or lowering taxes? / Do you agree that social assistance should be covering more poor families than it does today, even if this results in having fewer public services or higher taxes.
  2. To what extent do you agree or disagree to extend the number of poor families included in Targeted Social Assistance Program in exchange of requiring some of these actions from recipients? 

Chart 1. Attitude towards number of families covered, CB 2013

According to CB 2013, there is a noticeable difference in answers to this question between respondents from Armenia and Azerbaijan, as well as between respondents from Armenia and Georgia (Chart 1).  While 50% of Azerbaijani respondents think that social assistance should cover more poor families, only 28% of Armenian respondents agree with this statement. The difference between perceptions of social assistance programs in Armenia and Georgia is also significant: 49% of Georgian respondents acknowledge that the state should assist more poor families with social programs. 

Chart 2. Attitude towards extension of  the number of poor families covered, CB 2013

According to Chart 2, while 73% of Georgian respondents agree that social assistance in the country should be given to a larger share of the poor (in exchange, recipients are required do certain actions like searching for work, etc.), 45% of Armenian respondents and 62% of Azerbaijani respondents agree with the statement. In general, the most positive attitude toward expanding social assistance programs for a larger number of poor people has Georgian public. 

Public spending on social protection programs in the Southern Caucasus is exceptionally low (“Social Protection and Social Inclusion in Armenia, Azerbaijan and Georgia”). The social protection and social assistance policies during the last 24 years mainly aimed to ensure basic protection against poverty; however various studies show that they are not efficient for fighting the progressively growing inequality after the collapse of Soviet-Union (SlayB., 2009).

June 8, 2015

“Policy Challenges for Armenia in the Context of Regional and Global Economic Shocks”: Public Lecture

By Esther Bartl, CRRC-Armenia International Fellow

Esther Bartl
On Tuesday, June 02, 2015, the Caucasus Research Resource Center – Armenia invited Teresa Daban Sanchez, IMF resident representative to Armenia, to deliver a presentation on the economic and political implications of regional and global economic shocks for Armenia. To make the dimension of economic shocks - unexpected and large changes within an economy, despite occurring outside of it - for countries understandable to the audience, Ms. Sanchez focused on the global, regional and national level in her speech. 

The drop of global oil prices by almost 50 percent marked the starting point of a severe economic turmoil in many countries throughout the world.  The reduction of oil prices has impacted consumers globally, as the price of a great number of commodities such as food and metals have also declined subsequently.  Consequently, due to the drop of oil prices, the global economy has been below its potential.  As the price of oil has been extremely volatile in recent years, Ms. Sanchez underlined the difficulty to predict its evolvement in the future.

The steep and unpredicted reduction of global oil prices has had a severe impact on the economies of the Caucasus and the Central Asian region. The economies of the oil exporting countries of the region, i.e. Azerbaijan, Turkmenistan, Uzbekistan and Kazakhstan, being highly dependent on revenues from their oil production, have faced strong negative effects.  Also in the oil importing economies of the region, i.e. Georgia, Armenia, the Kyrgyz Republic and Tajikistan, lower oil prices resulted in reduced gains.   The high economic dependence on Russia’s real economy and its oil prices had especially indirect effects on the oil importing economies through so-called transmission channels. Ms. Sanchez showed a number of such transmission channels that link the Russian economy with the respective economies in the Caucasus and Central Asia such as strong banking system linkages between Russia and the region, remittances from and exports to Russia and Foreign Direct Investment (FDI).  

Teresa Sanches & Anna Sarkisyan, CRRC-Armenia

Armenia’s oil importing economy has stayed below its potential in 2014 due to its close ties to Russia’s troubled economy. The strong presence of Russian banks in Armenia constitutes a channel through which Russia’s economic crisis can negatively impact the financial system of the Caucasian country.  Moreover, remittances from Russia, which have constituted 15 percent of Armenia’s GDP, and exports to Russia, three percent of the country’s GDP in recent years, have been reduced due to current problems of the Russian economy.  At the same time, nonperforming loans have increased for Armenia from 2013 to 2014. Although banks in Armenia still hold 15 % capital, which could mitigate the economic turmoil so far, high interest rates have hindered economic stimulation.

Towards the end of her speech, Ms. Sanchez presented approaches to support those economies that have been hit due to the drop of global oil prices. Macroeconomic stability needs to be maintained, combined with structural reforms that should raise potential growth in the economies. In the case of Armenia, short-term policies should maintain economic and financial stability and boost economic growth.  In the medium-term, exchange rate flexibility and structural reforms will be of upmost importance to bring the Armenian economy closer again to its actual economic potential. 

April 27, 2015

One Small Step towards Normalization, One Large Step for Armenia’s Future

By Talar Kakilian, CRRC-Armenia International Volunteer

Over 40 leaders from both local and international organizations joined CRRC-Armenia at the Best Western Congress Hotel in Yerevan to participate in the presentation of the key findings of “Towards a Shared Vision of Normalization of Armenian-Turkish Relations” survey results conducted within the framework of the program Support to the Armenia-Turkey Normalisation Process funded by the European Union.

In partnership with the European Union Commission, CRRC-Armenia has worked endlessly to understand, interpret, and utilize the information pertaining to the Armenian-Turkish relationship from the 1200 households they have surveyed. Though reactions were mixed, the survey results reflected that many Armenian citizens, be it for economic, cultural, or political reasons, truly hope that the relationship between Armenia and Turkey can be rebuilt and solidified. Citizens were also very aware that such a relationship cannot exist when preconditions are set by either nation. Nevertheless, the respondents acknowledge the importance of the recognition of the Armenian Genocide when establishing diplomatic relations with Turkey, making it the most important demand from the neighboring nation.

Following the opening remarks by Heghine Manasyan (CRRC-Armenia), Andrej Didenko (European Union), Vazgen Karapetyan (Eurasia PartnershipFoundation), Richard Giragossian (Regional Studies Center), Hrachia Kazhoyan (CRRC-Armenia), and Aleksandr Grigoryan (American University of Armenia) presented their findings and opinions regarding the future of Armenian-Turkish normalization.

Such a survey and study prove to be one of the first steps towards creating a self-sufficient relationship between the two neighboring nations. Moreover, the presentation shed light on the 11 Turkish and Armenian researchers that are currently trying to research and work towards normalization. As Richard Giragossian said, such an effort from CRRC-Armenia allows the Armenian citizens and the nation to move beyond the concept of victimization and allow for validation, by aiming towards normalization, as well as vindication, by pushing for a relationship without preconditions. The opening of the border allows for the opening of the somewhat unrealized knowledge, potential, and opportunities. Andrej Didenko and the European Union hope that CRRC-Armenia presents their finding in Turkey in the hopes that a similar survey will take place there as well.

March 9, 2015

“Missing Women in South Caucasus”: Presentation on Research Results

By Talar Kakilian, CRRC-Armenia International Volunteer

Talar Kakilian
About 60 leaders from local and international research organizations joined CRRC-Armenia at Yerevan State University to participate in the “Missing Girls in the South Caucasus” presentation on research results. 

The concept of “Missing Girls/Women” refers to the number of women who would have been born if their birth had not been interrupted by deliberate actions, specifically in terms of sex-selective abortions. Findings show that, in Armenia, there are currently 114 boys born for every 100 girls, leading the nation to have the third highest boy to girl ratio disparity in the world (behind China and Azerbaijan). Enabled through the World Bank funding, researchers from CRRC-Armenia and Yerevan State University partnered together to collectqualitative data on the expanding issue.

The opening remarks by Heghine Manasyan (CRRC-Armenia) were followed by the findings, presented by Laura Bailey (World Bank), Nistha Sinna (World Bank), Giorgia Demarchi (World Bank), Yuliana Melkumyan (Yerevan State University, Faculty of Sociology), and Anna Sarkisyan (CRRC-Armenia). The discussion covered various issues revolving around sex-selective abortions, including the economic, social, cultural, and health-related consequences the nation may face. 

From left to to right: Heghine Manasyan,  Laura Bailey, Nistha Sinna, Giorgia Demarchi 
Using focus groups, the researchers interviewed over 215 men and women from 4 different communities throughout Armenia (including Yerevan). Moreover, 25 experts, including doctors, lawyers, community leaders, researchers, and others of the like, were interviewed about their perceptions pertaining to the current rise of sex-selective abortions. The results showed that son preference, fertility decline, transitional periods and societal shocks (including the collapse of the USSR), and sex-detection technology are the top reasons as to why this has become such a large issue. Economic disruptions and future monetary security are among the top reasons that have affected the fertility choices of Armenian families. Importantly, the panel discussed how, at its core, the “Missing Girls” phenomena was highly influenced by patriarchal social and gender norms within Armenia, including the nation’s devaluation of women throughout the social sector, including the political realm.

Anna Sarkisyan (left), Yuliana Melkumyan
The panel concluded that the best policy option to begin rectifying the Missing Girls phenomena is to begin addressing the fundamentals of gender equality in Armenia. They believe that, through media and education campaigns, as well as an increase women’s economic independence and protection and support of women who suffer from domestic violence, Armenia will be able to raise the status of women and thus begin to decrease the high rate of sex-selective abortions. As an interviewee (a young woman from Yerevan) said, “ [Actions] should not be concretely focused on having/not having a child. Whatever is done, wherever it commences, the core should be the same: increasing the importance of womens role. 

(Photo credit: CRRC-Armenia)

February 20, 2015

The New Inhabitants of CRRC-Armenia Planet

By Talar Kakilian, CRRC-Armenia International Volunteer

For the first time in, well, ever, CRRC-Armenia has become a full house. Hailing from all over Armenia and the globe, the office has become a bustling hub of diverse experience, ideals, and goals. Seven Junior Fellows, International Fellows, and International Volunteers have joined the CRRC-Armenia family in the hopes of being able to research, learn, and integrate their ideas in a professional setting.  With intense social, political, cultural, and economic changes and developments taking place in Armenia right now, these young and bright individuals could not have come at a better time.

The use of social media has played an important role in CRRC-Armenia’s development, as many of the current fellows learned about the fellowship programs through CRRC-Armenia’s Facebook page. The CRRC-Armenia website was also useful for Anna Gradlyan, who would always use the CRRC Caucasus Barometer data while she was pursuing her Master’s degree in Political Science and International Affairs from the American University of Armenia.

Nevertheless, it was another important Armenian institutional figure that guided Nataliya Secretareva from Moscow,  a graduate from the Lomonosov Moscow State University faculty of law, to come to Armenia. Natalya was assigned to read Mkhitar Gosh’s code of laws. Written in the 12th century, Mkhitar Gosh’s code of laws pertains to civil code and Canon law and was used in Greater Armenia and Cilicia. Intrigued by the importance of these laws, Natalya became fascinated by the place that hardly anyone “…can point out on a map and whose people’s first names exist to torment, but also teach those with average linguistic abilities.”

On the other hand, Dr. Emine Onaran Incirlioglu, professor of anthropology at Maltepe University in Istanbul, has joined CRRC-Armenia through the Turkey-Armenia Fellowship sponsored by the Hrant Dink Foundation. Emine hopes to use her socio-cultural anthropological background into her research so as to find a balance between academia and activism. She believes that, through Armenia’s and Turkey’s history and cross-cultural overlap, she can aid in finding a common language that can help mend the current issues.

As for our International Fellow,  Daria Vorobyeva’s, a PhD candidate at St. Andrews University in Scotland, has come to Armenia to complete her dissertation. Focusing on the change of identities of Christians who escaped the modern Syrian conflict, Daria wants to understand better the current state of the Syrian-Armenians upon their arrival to the country, as well as the future plans and the shift in the identity of these individuals.  

For many of the fellows, CRRC-Armenia is their first opportunity to get hands-on research experience in a professional setting. This is the time in which they can explore their passions while gaining valuable knowledge. David, who has a Master’s degree in International Relations from Yerevan State University, is excited about all of the sources he will be able to access through this fellowship Lilit Javadyan, who is working on her Master’s degree in Political Science from the American University of Armenia and wants to attain a career in the realm of public policy, is certain that the fellowship will prepare and train her with the adequate skills to find and analyze both quantitative and qualitative data.

The Fellows also believe that being able to meet and learn from professionals and fellow students is a very important factor as to why they chose this fellowship.  Samvel Hovhannisyan, who is currently working on his PhD at the Armenian State University of Economics, believes that CRRC will refine his skills as an individual. More importantly however, Samvel was excited about CRRC-Armenia because of the people he would be able to meet and network with. He understands that learning and developing research skills comes not only from individual research, but also from working with others, whether it be with fellows that are his own age or employees at CRRC. 

Nevertheless, each of these fellows are incredibly excited about this new path and cannot wait to see what the program has in store for them. Throughout the fellowship, the fellows are expected to complete their own research projects: David is hoping to conduct research and present a quantitative analysis of China’s military rise and the East Asian Security system; Lilit hopes to work on a project concerning Nagorno-Karabakh’s war veterans; Samvel wants to work on pension fund management issues in Armenia; Natalya is working on a project regarding the many interrelations of public policies, migration, and development; and Anna is working on local government development. These research projects are expected to develop the fellows’ skills so that they will not only learn how to research, but also analyze information that interests them.

For many, these research projects are not just a means to an end, but rather the first stepping stone in their future careers and postgraduate education.  Each with their own hopes, CRRC-Armenia is giving these 8 individuals the opportunity to get one step closer to their future goals.

CRRC-Armenia is also aiding me, Talar, an international volunteer, realize what my aspirations are for the future.  My position here is a bit different from everyone else’s, as I was placed at CRRC-Armenia through Birthright Armenia, a program created to help Diasporan Armenians volunteer, work, and get integrated within the homeland. As someone who studied history and public policy for my undergraduate degree at UC Berkeley, I am excited to have the opportunity to work at a fact tank like CRRC as it is a perfect stepping stone to my future career in public administration and policy analysis.

Throughout the last few weeks, CRRC-Armenia has become a newly budding family. Getting to know one another, we are all very excited for the opportunities that are about to come our way. The fellows and I all agree that CRRC-Armenia is one of the few organizations that enable young people to take a chance in the world and truly discover what it is like to work in a multifaceted field.  The organization has created a support-system for us, contributing to the development of high-level human capital in Armenia. As David believes, “[the] CRRC’s work is unparalleled in raising the quality of social research in the South Caucasus and particularly in Armenia,” and believes that such an environment will only provide benefits for all of the fellows and volunteers. We are all excited to see what the future holds for us at CRRC-Armenia.

November 19, 2014

IMF, World Bank, USAID Representatives in Armenia on Achievements, Challenges, and Growth

By Adrineh Der-Boghossian, Julya Sahakyan, Syuzanna Smbatyan, and Vanuhi Matevosyan, CRRC-Armenia Junior Fellows

A three-part series

CRRC-Armenia Junior Fellows Julya Sahakyan, Syuzanna Smbatyan, and Vanuhi Matevosyan on September 29 and October 3 met with the heads of three major institutions in Armenia: International Monetary Fund (IMF) Resident Representative to Armenia Teresa Daban Sanchez, USAID Armenia Mission Director Karen R. Hilliard, and World Bank Country Manager Laura Bailey to ask them about their institutions’ priorities and achievements in Armenia, challenges that were particular to their experience in the country, and what they liked the most and the least in Armenia.

Part 3. Being a high-level women official in Armenia.

Asked “What are some challenges that are particular to your experience in Armenia, a country where the majority of state and other prominent institutions are headed by men?”, all three interviewees said their experience of being a woman in charge of a major institution in an environment where many of the public officials are men is not unique to Armenia.

“I find that if there are any gender issues or if the men that I deal with have any particular attitudes about dealing with a woman, the polite nature of Armenian culture would prevent them from ever expressing it. And so, I discern no difficulty, challenges, or obstacles in my interaction with either men or women leaders in Armenia,” said the USAID representative, Hilliard, mentioning that her relationships with counterparts in all the countries in which she’s worked have been “very fluid, very easy, and based on mutual respect.”

The IMF representative Teresa Daban Sanchez was impressed by the high level of professionalism of the Armenian authorities. “When everybody behaves in a professional way, a gender doesn't matter, [if] you are a woman or a man,” she said, adding that she has a good working relationship with all her counterparts.

Ms. Sanchez, however, said it would be better if there was some diversity among decision-makers in Armenia in both the public and private sectors. As she noted, her impression was that Armenia is still in the process of empowering women.” Though, Armenia might be lagging behind other countries, Daban Sanchez opined, it’s only a matter of time until it catches up.

What the World Bank representative, Bailey, preferred to stress, however, were not the differences but the similarities between Armenia and other countries. These are some of her remarks on the issue:

“I think that when you are in a position of leadership you take very seriously the fact that you are representing not just your institution […], but also all the people who work with you.

When I go to a meeting with the government, when I sit in a meeting with ministers, I am representing not just the World Bank, this institution, I am representing every Armenian man and woman who works here in my office.

It’s my responsibility to represent them with integrity, to be very clear and honest in my communication, and to bring all of the best technical knowledge that we have and offer it, whether it’s in a discussion with the Minister for Energy or a discussion with an environmental civil society organization.

No matter who it is from the Armenian side, if I bring a great degree of technical value, if I bring a great deal of integrity, then my experience is people will listen. They will not perhaps worry too much about whether I am a man or a woman. What they are looking for is the value that I bring.”

CRRC-Armenia Junior Fellows: Adrineh, Syuzanna, Julya, Vanuhi

November 11, 2014

IMF, World Bank, USAID Representatives in Armenia on Achievements, Challenges, and Growth

By Adrineh Der-Boghossian, Julya Sahakyan, Syuzanna Smbatyan, and Vanuhi Matevosyan, CRRC-Armenia Junior Fellows

A three-part series

Part 1 

Part 3

CRRC-Armenia Junior Fellows Julya Sahakyan, Syuzanna Smbatyan, and Vanuhi Matevosyan on September 29 and October 3 met with the heads of three major institutions in Armenia: International Monetary Fund (IMF) Resident Representative to Armenia Teresa Daban Sanchez, USAID Armenia Mission Director Karen R. Hilliard, and World Bank Country Manager Laura Bailey to ask them about their institutions’ priorities and achievements in Armenia, challenges that were particular to their experience in the country, and what they liked the most and the least in Armenia.

Part 2. Armenia: Pros and Cons

Interestingly, all three interviewees cited the warmth of Armenian people as one of the things they enjoyed most about living and working in Armenia.

“This is a very warm and welcoming country. When I walk into a shop, people smile, they say hello — it’s just very friendly. That’s a very nice thing. As a newcomer, you feel very warmly welcomed,” Laura Bailey said, adding that the second thing she liked most about the country was its beautiful scenery.

World Bank Country Manager Laura Bailey with Armenian President Serzh Sargsyan (left) at the opening ceremony of the Gyumri Technology Center. Sept. 13, 2014. Photo: The World Bank.

The USAID Mission Director Karen Hilliard mentioned Armenia’s incredibly rich history and culture, a fascinating language, and the strength of Armenian family as positive disclosure, adding that "Armenians are such survivors". "It's a pleasure to work here", she confessed.

Dr.  Hilliard  speaks at the official launch of the USAID-funded Pension Reform Implementation Program, Sept. 11, 2013.
Photo: A.Karabekian, USAID/Armenia

While the IMF representative Tereza Daban Sanchez remarked that the quality of life was relatively good, there were certain situations reminding her Armenia still being a country in transition. She pointed to the lack of social cohesion and difficulties for communities to get together, and poor efforts and resources to increase the nation’s welfare collectively. As an example, she mentioned people’s reluctance to follow traffic rules, as drivers do not consider the impact their behavior has on the community’s safety. 

Moreover, Bailey also pointed out the traffic, saying that one thing she would change in Armenia was the “crazy drivers in Yerevan”!

IMF Resident Representative to Armenia Teresa Daban Sanchez (left) and IMF mission chief for Armenia Mark Horton (center). Press conference. Sept. 30, 2014. Photo: IMF Office to Armenia.

Furthermore, Ms. Hilliard  expressed a concern with regard to high level of corruption. “Armenia faces a lot of external obstacles, which have an impact on economic developments,  but the level of corruption is self-inflicted, it is something that holds Armenia back. What is the thing that I would change? - it will be that”, she said.

November 6, 2014

IMF, World Bank, USAID Representatives in Armenia on Achievements, Challenges, and Growth.

By Adrineh Der-Boghossian, Julya Sahakyan, Syuzanna Smbatyan, and Vanuhi Matevosyan, CRRC-Armenia Junior Fellows

A three-part series. 

CRRC-Armenia Junior Fellows Julya Sahakyan, Syuzanna Smbatyan, and Vanuhi Matevosyan on September 29 and October 3 met with the heads of three major institutions in Armenia: International Monetary Fund (IMF) Resident Representative to Armenia Teresa Daban Sanchez, USAID Armenia Mission Director Karen R. Hilliard, and World Bank Country Manager Laura Bailey to ask them about their institutions’ priorities and achievements in Armenia, challenges that were particular to their experience in the country, and what they liked the most and the least in Armenia.

Part 1. Priorities, Achievements, and Assistance to Armenia

The World Bank and USAID's priorities in Armenia are manifold: for the World Bank, these include fostering an investment climate and working not only on economic policy, but also in such sectors as education, health, social protection, and regional development, among others. USAID Armenia, in turn, identified priorities in the areas of private sector competitiveness, improvement of the business environment, financial services for small and medium enterprises, improved primary health care and social services, rural development (particularly in remote corners of Armenia), tourism, civil society development, and local governance. Past USAID activities include cross-border business promotion, civil society and cultural exchanges, but recently, Hilliard said, USAID has decided to focus on the business aspect, leaving the cultural and political aspects to the Public Affairs Section of the US State Department.

Dr. Karen Hilliard, USAID/Armenia Mission Director, presents to the public the USAID assistance strategy for Armenia for the years 2013-2017 at an official event on December 11, 2013. Photo: M.Khachatryan

Hilliard also highlighted the USAID’s endeavors in the energy sector; specifically, helping Armenia link its energy grid more closely with that of Georgia, so that Armenia is not dependent on one source of electricity and the two countries can actually help each other when they have shortages. She mentioned Armenia’s relationship in the energy sector with Iran, but said USAID is not involved “for geopolitical reasons.” However, she added, USAID believes that by forging business and cultural ties to increase tourism, it is preparing for the day when Armenia will no longer be blockaded.

Bailey, in turn, mentioned some of the more tangible areas of the World Bank’s work in Armenia, identifying the reintroduction of preschools and improved access to health (by rehabilitating 10 regional medical centers). “But it’s also important the things that are invisible: like changing the tax law. Sounds very abstract but it turns out that having a good modern tax code is incredibly important to getting businesses to grow,” she added.

The issue of energy dependence was also mentioned by IMF Resident Representative to Armenia Teresa Daban Sanchez, who identified it as a key priority of the IMF’s agenda with the Armenian authorities. Under the IMF-supported program, the authorities are encouraged to develop a strategy to improve the sustainability and efficiency of the energy sector. Preserving macroeconomic stability and working with the authorities on structural reforms were the other priorities of the IMF in Armenia that Daban Sanchez identified.More specifically, she cited economic growth, job creation, and tax reform as areas in which the IMF focuses and works with the Armenian authorities.

(left to right): Armenian President Serzh Sargsyan, IMF mission chief for Armenia Mark Horton, and IMF Resident Representative to Armenia Teresa Daban Sanchez. Sept. 30, 2014. Photo: IMF Office to Armenia.

Asked in which areas their institution made the greatest strides, Bailey, the World Bank representative, identified competitiveness, while Hilliard, the USAID representative, mentioned disaster relief (following the 1988 earthquake) and growth of civil society, in addition to significant structural reforms such as the modernization of the energy sector, management of natural resources (particularly water), “transitioning from a Soviet-style health system to a more modern primary healthcare system,” and strengthening the pension system.

Ms. Sanchez also mentioned Armenia’s transition from the Soviet period, saying the IMF supported Armenia’s efforts to overcome the challenges of transitioning to a market-based economy and more recently Armenia’s recovery from the global economic crisis. However, despite these achievements,  she said, significant challenges remain. “Growth and inflation remain volatile. Real interest rates are high. Financial markets are under-developed and highly-dollarized. Business climate remains challenging. Poverty and migration continue to be high. Therefore, the IMF is determined to continue to support Armenia with a new three-year arrangement approved in March 2014, which includes policies to ensure macroeconomic stability and structural reforms,” she said.

Regarding the World Bank’s assistance, Bailey mentioned helping Armenia “change the way the economy is structured by reforming the government regulations and providing the incentives for businesses to create jobs.” Though this work is invisible, what is visible, she said, is addressing vulnerability, as the results are more immediate. The World Bank, she said, works with the government on social protection schemes such as the family benefit scheme. In addition, as a result of projects supported by the World Bank, pensioners receive their pensions in a timely manner, and 1 out of every 4 people throughout the country benefitted from temporary employment, many of whom later transferred to a permanent job.

(left to right): World Bank Country Manager Laura Bailey, World Bank Regional Director for South Caucasus Henry Kerali, and RA Prime Minister Hovik Abrahamyan. Sept. 11, 2014. Photo: The World Bank.

The World Bank’s assistance to Armenia has been growing; however, there was a “brief dip” from 2013 to this year. Bailey said the reason for this was technical. There are two “buckets” of funding that the World Bank provides: one to middle income countries; the other, to lower income countries. Until last year, Armenia was eligible for assistance from both funds; however, this year, it is no longer eligible for funding provided to lower income countries. The World Bank believes this is a sign of maturity and evidence of Armenia’s growing economy. It has compensated for a little bit of the loss of funding by offering other resources specific to countries interested in investing in renewable energy resources.

The overall support USAID provides to Armenia also decreased; however, Hilliard said this “reflects the natural evolution of things.” The USAID’s assistance to Armenia in the early years of independence was greater simply because the country’s needs were greater. Over time, Armenia has progressed, and “it’s now about to graduate from lower middle income country to middle income country status. So it’s only natural that foreign assistance would decrease proportionally,” she said.

October 22, 2014

Modern Problems of Socio-Economic Development in Armenia

(review of a Doctoral thesis by Amalya Saribekyan)

By CRRC-Armenia International Volunteer Varak Ketsemanian

Varak Ketsemanian
The problem of Armenia’s social and economic development has been on the political agenda of the Armenian ruling elite and the Diaspora, since the country has regained its independence in 1991. Given the unfavorable well-known geographical, geopolitical and historical developments of the Armenian Republic during the past years of independence, the economic and social progress of the country currently remains a lingering problem for the Armenian reality.  Thus, the local scientists quite often try to analyze the public policy to suggest models that will support further development.

One of such works is the Doctorate thesis, written by Amalya Saribekyan. She argues that the effective usage of the social potential of the country would account to a new qualitative progress that will enhance the social and economic structure of Armenia. The study reveals the peculiarities of economic growth and pre-crisis (2008) developments while analyzing the trends of economic development in transition countries, including Armenia.

Apart from providing a theoretical basis for her work and reviewing development theories by W. Rostow, the author relies on empirical data, arguing for a necessity in the structural change in Armenian economics, and societal management and dynamics. Moreover, this study is an attempt to bring into the scene the importance of society when it comes to modernization and economic development. It provides some new insights concerning the role of society in a post-crisis Armenia, and calls for the necessity to find new ways for the further development of the country leading to economic modernization and progressive development, based on new resources, new approaches and principles.

Considering the specifics of the newborn Armenian Republic and the harsh realities of the transitional period it found itself after the collapse of the Soviet Union, the research underlines the necessity for revamping the social-economic structure of the country. In this respect, it tends to merge different scientific and social approaches urging for the development of new social and political mechanisms and principles that would shape and enhance the economic structure of Armenia.  Justifying the importance of modernizing the national ideology under the modern theories of social economic developments, this work discusses a necessity of transition to mobilized economics as a safeguard for the maximal realization of the national investment potential.

With the introduction of this idea, Saribekyan highlights the necessity for a multilateral evaluation of the constituent parts of socio-economic potential, and defines their role in the formation of national investment potential. In other words, discussing the necessity for harnessing the national investment potential, the author marks the development of human potential (culture, ideology, and knowledge), as a priority and necessary condition for the economic growth. Thus, considering the development of social apparatus as a condition for economic development, the marking of conceptual characteristics of long-term national development assumes great importance in Saribekyan’s work, particularly the priority of individual interest over social interest, consent, and effective cooperation of political and economic systems on the basis of the principles of democracy, legitimacy and transparency. 
Finally, this work argues for the necessity of structural changes along the following lines:

    - The creation of a subsystem of cultural and spiritual development, aimed at shaping national ideology as well as at acknowledging the role of Armenian nation in human civilization;

        - The establishment of a subsystem of provision of social understanding and society – state cooperation, aimed at promoting communal involvement in the decision making process and increasing the effectiveness of these processes; finally, the necessity of revamping the subsystem of social economic strategic development, aimed at differentiating between strategic and administrative levels.

Hereby, throughout this brief introduction to Saribekyan’s work, we would like to invite economists, sociologists, social scientists and all those concerned with Armenia’s social-economic development to, not only freely exchange their ideas, opinions and comments regarding the problems raised in this work, but also to suggest new ways, methods, mechanisms and principles bringing some new insights in efforts to address the problems mentioned above.