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Armenia

Land of opportunity? - a overview

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• Introduction• Overview• Corruption• Democracy deficit• Conflict• Infrastructure• HIV/AIDS• Closing remark

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About Jacob Taarup• External Lecture at CBS• 10 years as manager within the Aircargo

industry • Specialised in Management and Quality systems

• 6 years as “management”-Consultant working within:• Communication• CSR and Business Ethics• Diversity/Gender• Governance, Risk and Compliance

• Blogger at sriportfolio.com and other sites (SRI and CSR issues)

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Central Asia?

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GDP according to the World Bank

Armenia Denmark

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Economics

Inflation Growth

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Environment

Agriculture Electrical power

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Setting up shop in Eastern Europe and Central Asia

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Armenia• Region: Eastern Europe, Central Asia or Western Asia (depending on

perspective)• Lower middle Income (USD1,006 - 3,975)• GNI: USD 3090 (World Bank, 2012)• GDP Growth: 4,6%• Inflation between 9,2% (2010) and 4,3% (2011) (estimated)• Pop: 3,259,000 (Armenia National Statistical Service, 2010)• Poverty 35,8% (under the poverty line according to the World Bank, 2012)• Ethnic groups: Armenian 97.9%; Yezidi 1.3%; Russian, Greek, and other 0.8%.• Religion: Armenian Apostolic Church (more than 90% nominally affiliated).• Languages: Armenian (96%), Russian, other.• Education: Literacy--99%.• Health: Infant mortality rate--20.21/1,000. Life expectancy--74 years.

(World Bank, WHO, Armenia National Statistical Service)

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Focus of development and business

Corruption

Democracy deficit

Conflict

Difficult access (infrastructure

etc)

Low capacity in labor force

HIV/AIDS

Other…

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Corruption

• Corruption is operationally defined as the abuse of entrusted power for private gain (Transparency International) – "according to rule" corruption and – "against the rule" corruption

• The cost of corruption is four-fold: political, economic, social, and environmental.– The effect of corruption on the social fabric of

society is the most damaging of all.

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The 2011 Corruption Perceptions Index is based on 13 independent surveys

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Armenia

• Score of 2.9 on a scale of one to ten.• Ranked 129 of 178 surveyed countries just

after Vietnam and before Eritrea. Which is 6 places lower than in 2011

Transparency International, 2011

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• Survey done with 1956 citizens by the Armenian Centre for National and International Studies in 2004

• Most (42%) thought that Corruption was a political phenomena

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Democracy deficit

• Stable democracies characterized by good governance in which the individual´s rights and freedoms are respected are a prerequisite for sustainable development in keeping with human dignity. (Swedish MFA)– Rule of Law– Democratic structures in place

• Cooperation should be undertaken with NGOs and civil society forces that work to achieve openings for democracy. In other cases, such as where civil society is small or non-existing, the focus should be on communicating an awareness of democracy, human rights, gender equality and market economy. (Sida)

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Conflict

• In political terms, "conflict" can refer to wars, revolutions or other struggles, which may involve the use of force as in the term armed conflict.

• War is a phenomenon of organized violent conflict, typified by extreme aggression, societal disruption and adaptation, and high mortality.

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• It is estimated that 378,000 people died due to war each year between 1985 and 1994.

• that 378

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Armenia and Conflict

• Ranked 109 by the Global Peace Index out of 154 in 2011.

• Denmark is ranked as no. 4 in 2011.

Major issues were• Relations with

neighbouring countries• Ease of access to small

arms and light weapons• Willingness to fight

(Score 4 out of 5)

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infrastructure and difficulty of access…

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Infrastructure

• Mobile access, internet• Roads• Water• Energy• Means of transportation available (public

transportation)• Existence of basic structures (hospitals,

schools, universities)

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Some Infrastructure highlights

• Around 20 phones per 100 people, Internet users are around 6. • Roads and Railways need significant updates as much have

been build during the Soviet period. However, significant investments are being made in the area.

• Almost 24 Hr water coverage in major cities while there might be some issues in rural areas.

• Efforts to diversify energy dependence includes hydroelectric power, Iranian oil pipe, Nuclear power.

• Significant difference between urban and rural basic infrastructure challenges due to degradation of equipment.

OECD, 2009, EBRD, 2009, Armenian Transport Dev. Strategy, 2020

CSR-Gender Group Copyright 26

CSR-Gender Group Copyright 27

HIV/Aids

• Human disaster• Social long term effects• Access to quantity and quality of employees• Market demand

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• 2000 reported 29 cases in total• 2011 182 new cases• Per 100’000 Citizens– 45,1 Shirak– 41,9 Yerevan

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Doing Business

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Key Challenges• To translate the recent economic boom into sustainable growth that

moderates the real sector effects of the global financial crises by promoting diversification of economy;

• To address the lingering post-privatisation flaws in the corporate sector by phasing out monopolies, promoting competition, and improving transparency, as well as corporate governance, across all sectors of the economy;

• To improve the business environment by, inter alia, tackling corruption, including politically-motivated interference in the private sector, and emphasising the rule of law;

• To continue to strengthen the financial sector through institutional development and consolidation, as well as through putting in place appropriate mechanisms for developing the securities markets;

• To foster commercialisation of public infrastructure and utilities, with an emphasis on transparency and governance;

• To accelerate Armenia’s regional integration, including working within the framework of ENP.

EBRD, 2009

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THANK YOU