FY 2010 Foreign Operations Appropriated Assistance: Armenia

Bureau of European and Eurasian Affairs

Performance Report Highlights: Armenia

FY 2010 Foreign Assistance Goals

U.S. Government (USG) assistance to Armenia helped promote democratic governance by increasing informed citizen participation in governmental decision-making and fostering enhanced capacity, transparency and responsiveness of government institutions, especially at the local and regional levels. U.S. assistance also encouraged Armenia to engage constructively and peacefully with its neighbors. Before and throughout the global financial crisis, U.S. assistance helped Armenia increase its private-sector competitiveness, improve access to finance, and reduce administrative and regulatory constraints to enterprise growth. In the area of health and social protection services, USG-funded programs with the Ministries of Health and Labor helped promote the more efficient use of limited financial resources, improve the quality of services, and empower citizens to exercise their health and social protection rights and responsibilities.

Total FY 2010 Foreign Operations Appropriated Assistance: $45.60 million*

Date: 2011 Description: Armenia -- Total FY 2010 Foreign Operations Appropriated Assistance:  $45.60 million. - State Dept Image

(*Foreign Operations funding appropriated for FY 2010, not including Peace Corps funding and centrally managed, regional Foreign Operations funding that is not budgeted for specific countries. Humanitarian Assistance total does not include the value of donated humanitarian commodities transported by the Department of State, estimated at $19.65 million in FY 2010.)

Highlights of FY 2010 Performance by Area of Focus

Peace and Security

-- USG experts trained the staff from the Armenian Nuclear Regulatory Authority (ANRA) on internationally recognized approaches to performing nuclear power plant safety analyses. The USG provided financial assistance to the Armenian Nuclear Power Plant (ANPP) for upgrades and modernization of equipment, such as the reactor protection system and emergency diesel generators. USG experts provided technical assistance to improve training for ANPP staff, and improve administrative guidelines and operational procedures. Experts also prepared ANRA staff for licensing of a potential new nuclear power plant in Armenia. U.S. and G-7 diplomatic efforts resulted in an Armenian Government (GOAM) decree in late 2009 that increased ANRA’s technical independence and secured additional resources, including staff.

-- The USG completed a study of the anti-money laundering regulatory framework that applies to casinos in Armenia. The GOAM is drawing upon recommendations offered by the study to draft and implement regulations designed to help strengthen the nation’s anti-money laundering regime.

-- In the battle against human trafficking, USG assistance provided shelter to Armenian and foreign victims of trafficking, and funded the only telephone hotline for trafficking victims in Armenia. Police, prosecutors, judges and the press are dealing seriously with human trafficking cases, and convicted traffickers are receiving multi-year prison sentences.

-- In order to foster the normalization of relations between Armenia and Turkey, the USG supported a "Track II" dialogue between opinion-makers on both sides, including former diplomats, retired generals, and renowned journalists. The USG also supported a series of public activities to increase mutual understanding between the countries, including a talk show conducted by a prominent Turkish journalist with Armenian youth, which was aired both in Turkey and Armenia.

Governing Justly and Democratically

-- With USG assistance, the Chamber of Advocates (Armenian Bar Association) helped to organize written and oral bar examinations, which resulted in the swearing in of 150 new lawyers in 2010, bringing total Chamber membership to 1,049. Monitors certified the process as accurate and transparent. For the first time, the written portion of the bar examination was conducted online, which not only streamlined the examination process but standardized the grading.

-- A USG-supported network of 11 province-based Advocacy and Assistance Centers (AACs) responded to nearly 2,000 citizen requests for assistance regarding corruption in FY 2010. Government cooperation with these centers increased, illustrated by visits by the Prosecutor General, who stressed to regional prosecutors the importance of working with the AACs.

-- With the support of USG assistance, the National Assembly introduced Committee Rules of Procedure, including the establishment of mandatory and participatory public hearings. In 2010, these public hearings led to a commitment from the GOAM to revise regulations affecting persons with disabilities, based on feedback from direct beneficiaries. With USG support, the National Assembly also established a system for tracking plenary session and committee agendas.

-- USG assistance to municipalities helped increase local revenues, improve service delivery and public relations, and strengthen local councils. A public opinion survey showed a 30% increase in citizens’ satisfaction with local government service delivery in the cities where the USG provided assistance. Monitoring of these participating local governments' financial systems revealed an average 30% increase in “own-source” revenues. With USG support, the Ministry of Justice adopted Internal Rules of Procedures for Local Councils to advance fiscal decentralization and facilitate local governments’ access to credit.

-- USG funding supported a civic advocacy campaign to revise the electoral code to improve the election prospects of female candidates. A draft electoral code under consideration by the National Assembly at the end of FY 2010 included a minimum 20% quota for women candidates.

-- With USG assistance, Armenian non-governmental organizations (NGOs) successfully lobbied against the passage of controversial amendments to the NGO regulatory law proposed by the Ministry of Justice. A coalition of NGOs coordinated their participation in two parliamentary hearings on the draft amendments and produced informational materials for journalists, Members of Parliament, and attendees. Due to regular, substantive contributions by NGOs to the development of legislation and policy, the operating environment for NGOs improved, including new legislation protecting the right to access public information.

Investing in People

-- With USG technical assistance, the Ministry of Health (MOH) raised the salary of Armenia’s health-care providers an average of 4% after the MOH began paying medical facilities based on services rendered to patients rather than relying on estimates of the catchment population. The USG extended assistance to select maternity hospitals and wards to advance the quality of maternal and child health, reproductive health, and family planning services. Participating facilities observed fewer deliveries with postpartum hemorrhage (down from 3.1% to 2.8%), and five participating regions experienced a reduction in the rate of abortions (from 8.2 to 5.4 abortions per 100 pregnancies).

-- Approximately 90% of the Armenian population has registered with a primary-care provider of their choice. With USG assistance, the MOH has instituted new mechanisms, such as fee-for-performance and payments based on enrollment of clients, to improve national health financing. A U.S.-supported primary-care quality assurance program involving 139 health facilities served approximately 80% of Armenia’s total population. In October 2010, a USG-initiated regional assessment confirmed that Armenia has made progress in improving primary health-care delivery in rural regions, as well as leveraging World Bank investments to complete vital renovations to hospitals and clinics.

-- In FY 2010, the USG continued to work with Armenia’s State Employment Services Agency (SESA) to help build its capacity to develop stronger links with employers and effectively serve job-seekers. Throughout the year, SESA improved its information technology (IT) connectivity with local employment offices, and conducted public outreach activities to promote awareness of employment services. Partly as a result of these efforts, use of public employment services increased from 145,800 to 157,200 (7.8%) nationwide in FY 2010.

-- With USG assistance, the GOAM enhanced the quality of social service delivery by outsourcing vital services to local NGOs, and by clarifying the regulations and rules which provide the framework for Armenia’s social safety nets. Despite a deep economic downturn and budgetary shortfall, the GOAM sustained sufficient funding to these NGOs to enable the country to expand access to services for vulnerable groups, such as the elderly and disabled.

Economic Growth

-- In FY 2010, a notable tax administration reform included a new Risk-Based Audit Selection System (RBASS) to reduce the number of audits and increase their quality. USG assistance also helped to develop audit guidebooks for three industries (real estate, tourism, and transportation), and helped develop methodology for automated value-added tax (VAT) refunds. When fully implemented, this system should substantially expedite refunds, reducing the backlog in VAT refund requests and arrears.

-- In FY 2010, the USG provided training support to the IT, tourism, and pharmaceuticals sectors. Support to Armenian IT companies helped to establish partnerships with companies from Southeastern Europe. Assistance in the tourism sector included the initiation of a dialogue between Armenian, Georgian and Turkish tourism operators to develop and implement joint regional tourism products. The USG conducted training events for pharmaceutical companies to help improve their exports to international markets. In these sectors, average sales compared to 2009 rose by 25%, 10%, and 22% for IT, tourism, and pharmaceuticals, respectively.

-- In FY 2010, the USG-founded organization Farm Credit Armenia (FCA) increased the total amount of its funds lent to agricultural producers and agribusinesses in Armenia from under $1 million to more than $2 million. The number of borrowers also doubled in the same time period to over 210 borrowers, including financial lease holders. FCA has experienced a near-100% on-time loan repayment rate, and as a result has generated a modest level of profitability from its ongoing operations.

-- Partly as a result of USG assistance, over 16,300 farmers enjoyed improved linkages to domestic and international markets, and more than $21 million was generated in rural communities via milk marketing cooperatives and milk collection units (as compared to $850,000 in FY 2009). In addition, more than 145 new rural small and medium enterprises and food processing companies were established and over 1,500 new jobs were created.

Humanitarian Assistance

-- The USG completed nine small reconstruction projects, benefitting approximately 15,000 people. The program also completed delivery and distribution of 50 airlift and surface containers of humanitarian aid, including medicines; medical supplies; equipment; clothing; household supplies; and hygiene and school kits. The U.S. provided cheese to 65 different boarding institutions with more than 7,600 beneficiaries, while mobile medical teams provided medical services to over 23,000 patients in the Lori region. The USG commodities distribution and annual vaccination project provided assistance to 150 NGOs, 150 health care facilities, and 39 rural communities. The total number of beneficiaries of the USG’s humanitarian program was more than 520,000 people, while the total value of donated commodities in FY 2010 was $19.65 million.