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Enhancing the Role of Enhancing the Role of Diaspora in Sustainable Diaspora in Sustainable
Development of ArmeniaDevelopment of Armenia
by Gohar Gyulumyan, by Gohar Gyulumyan,
Terry Sanford Institute of Public Policy, Duke University,Terry Sanford Institute of Public Policy, Duke University, AIPRG ConferenceAIPRG Conference
May , 2008May , 2008
OutlineOutline Definitions of basic termsDefinitions of basic terms
StakeholdersStakeholders
Regional and development contexts of Regional and development contexts of ArmeniaArmenia
The Armenian diasporaThe Armenian diaspora
The Policy ProblemThe Policy Problem
Policy alternativesPolicy alternatives
Recommendations: A new role for the diaspora Recommendations: A new role for the diaspora
DefinitionsDefinitions
DiasporaDiaspora – – geographic dispersion of a nation, geographic dispersion of a nation, settlement in different political entities, but settlement in different political entities, but members maintain their national identity, unity members maintain their national identity, unity and solidarityand solidarity
Sustainable Sustainable DevelopmentDevelopment
Capacity and opportunity Capacity and opportunity to sustain long-term to sustain long-term
developmentdevelopment
Maintain Democratic Maintain Democratic StabilityStability
Ensure Regional Stability
Major StakeholdersMajor Stakeholders
Home Country Armenia
Host countries
D I A S P O R A
International Organizations
Neighboring countries in the region
Armenia: Regional ContextArmenia: Regional Context
Russia
Regional context: high density of conflicts, unequal access to cost-effective
infrastructure
ARMENIA
Armenia: Development Armenia: Development ContextContext
GDP per Capita – 2600 USD (2007),GDP per Capita – 2600 USD (2007), Transfers from diaspora (per capita) – 350 USD,Transfers from diaspora (per capita) – 350 USD, Poverty – 29.8%, extreme poverty – 4.6% Poverty – 29.8%, extreme poverty – 4.6%
(2005) (2005) Resource poor, land-locked, Resource poor, land-locked, Transportation corridors blockedTransportation corridors blocked Economic structure Economic structure construction(22%), Industry (20%), construction(22%), Industry (20%), Agriculture (18%)Agriculture (18%) Foreign tradeForeign trade
49% of GDP, 49% of GDP, high export concentration ratio high export concentration ratio
Transition Challenges Transition Challenges Institutions, practicesInstitutions, practices
Graph 1: GDP, employment, real wages % change, 1990=100
0
20
40
60
80
100
120
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
GDP 1990=100 Employment 1990=100 Real wages 1990=100
Diaspora CommunitiesDiaspora Communities
Darkness of the color represents the density of Diaspora communities
Diaspora: Major FactsDiaspora: Major Facts 5-6 mln, hosted by 70 countries5-6 mln, hosted by 70 countries
1 bln USD (2006) annual assistance to Armenia 1 bln USD (2006) annual assistance to Armenia ((current transfers, remittances, humanitarian assistancecurrent transfers, remittances, humanitarian assistance) )
Poverty reduction support and post-conflict Poverty reduction support and post-conflict infrastructure rehabilitation infrastructure rehabilitation
Part of institutional power sharing arrangements Part of institutional power sharing arrangements in Armenia (political parties, printed media, etc.)in Armenia (political parties, printed media, etc.)
Regional Conflict – human, financial, material Regional Conflict – human, financial, material resources, advocacyresources, advocacy
Diaspora Funding
Political Parties
Benevolent Org.
Foundations
Individuals
Humanitarian/food Assistance
Sponsoring cultural activities
Improving Healthcare
facilities
National Defense and security
Branches of ChurchInfrastructure
Repair and post-conflict
reconstruction
Supporting education Institutions
Channels of Diaspora AssistanceChannels of Diaspora Assistance
Dynamics of Diaspora Dynamics of Diaspora AssistanceAssistance
ChallengesChallenges
Most of the diaspora assistance Most of the diaspora assistance has a philanthropic naturehas a philanthropic nature Dispersed into different projectsDispersed into different projects Creates sustainability concernsCreates sustainability concerns
ArmeniaArmenia Lack of a single institution responsible Lack of a single institution responsible
for diaspora affairs for diaspora affairs Capacity gap to guide the diaspora’s Capacity gap to guide the diaspora’s
efforts toward achieving its efforts toward achieving its development objectivesdevelopment objectives
The Problem TreeThe Problem Tree
Strategic bargaining in political landscape
Low level of export diversification,
Growing regional disparities between Yerevan and regions
CCOONNSSEEQQUUEENNCCEESS
Low employment response to growth performance
Fragile political stability
Persistent Tensions with neighbors in the region
High transaction costs
Sustainability concerns
Inability so far to derive full potential benefits from diaspora Policy ProblemPolicy Problem
RROOOOTT
CCAAUUSSEESS
Primary focus on philanthropy
Institutional rigidity Weak guidingcapacities
Inadequate institutional arrangements
Different perception of national identity
mistrustCompetitive political environment
Culture of talk
Heterogeneity
Unwillingness to share the marketPoor governance and accountability capacity
Transition challenges
What Can be Done?What Can be Done? Policy Alternatives Policy Alternatives
1. Status Quo – unsustainable1. Status Quo – unsustainable
0.0%
100.0%
200.0%
300.0%
400.0%
500.0%
600.0%
700.0%
800.0%
1998 1999 2000 2001 2002 2003 2004 2005 2006
Cummulative Real GDP Growth rate
Growth in Incomes and Transfers from Abroad
Growth in Incomes and Transfers from Abroad, adjusted for 45% depreciation of the USD in 2004-06
0.0%
100.0%
200.0%
300.0%
400.0%
500.0%
600.0%
700.0%
800.0%
1998 1999 2000 2001 2002 2003 2004 2005 2006
Cummulative Export Growth rate Growth in Incomes and Transfers from Abroad
Armenia's Export Pattern and the Growth in Private Transfers (1998=100)
Growth Rate of Real GDP and Growth Rate of Real GDP and Transfers from Abroad Transfers from Abroad (1998=100)(1998=100)
2. Partial revision of diaspora’s role – limited 2. Partial revision of diaspora’s role – limited scopescope3. Re-vision of diaspora role – better utilization 3. Re-vision of diaspora role – better utilization
of the nation’s comparative of the nation’s comparative advantageadvantage
New Role for Diaspora to Promote New Role for Diaspora to Promote Armenia’s Sustainable DevelopmentArmenia’s Sustainable Development
Create capacities and Create capacities and opportunities opportunities to sustain long-term development pathto sustain long-term development path
Support to achieve democratic Support to achieve democratic stabilitystability
Assume the role of a “Third Sider” Assume the role of a “Third Sider” in the matters of regional contextin the matters of regional context
Diaspora to promote Diaspora to promote Armenia’s Sustainable Armenia’s Sustainable
DevelopmentDevelopmentRecommendationRecommendation: : Diaspora to change the nature of its Diaspora to change the nature of its
assistance assistance Decrease philanthropy and increase Decrease philanthropy and increase
business partnerships,business partnerships, Increase responsiveness of diaspora Increase responsiveness of diaspora
institutions,institutions, Offshore production activities to Armenia,Offshore production activities to Armenia,
Job opportunities, business culture, economic Job opportunities, business culture, economic diversificationdiversification
Assist Armenia’s market access and Assist Armenia’s market access and international integration, (international integration, (export expansionexport expansion))
Mobilize expatriate Armenians Mobilize expatriate Armenians to close the capacity gap to close the capacity gap ((examples: UNDP TOKTEN system, Korea) examples: UNDP TOKTEN system, Korea)
Armenia to Promote its own Armenia to Promote its own Sustainable DevelopmentSustainable Development
RecommendationRecommendation: : Foster reforms, lead the dialogueFoster reforms, lead the dialogue
GovernmentGovernment Improve domestic competitive environment, Improve domestic competitive environment, Create new institution in charge of diaspora Create new institution in charge of diaspora
affairs, affairs, Improve public sector accountability, Improve public sector accountability, Improve quality of public discourse, Improve quality of public discourse, Create trustworthy and transparent Create trustworthy and transparent
environment for partnershipenvironment for partnership Engage diaspora in policy dialogue Engage diaspora in policy dialogue Private sectorPrivate sector Create space for business partnershipCreate space for business partnership
Treasury Single Account,Central Bank of Armenia
Diaspora Conference
Treasury Office 1
Treasury Office 2
Treasury Office 42
Community
PIU PIU Community
CommunityPIU
Diaspora Assistance, (Institutions and Individuals)
Ministry of Foreign Affairs and All Armenia Fund
Secretariat or Ministry
Government of Armenia
Institutional ArrangementsInstitutional Arrangements
Expected BenefitsExpected Benefits Armenia’s sustainable development Armenia’s sustainable development
perspectiveperspective Good governance and opennessGood governance and openness Democratization of the societyDemocratization of the society Spillovers and positive externalities for Spillovers and positive externalities for
other countries in the regionother countries in the region Expansion of regional Expansion of regional
marketsmarkets Financial servicesFinancial services Commerce, tourism, etc. Commerce, tourism, etc.
Thank YouThank You