Armenia

Armenia has one of the highest, and increasing, emigration rates in the world, with about 30% of the population living outside the country. In parallel, Armenia also benefits from significant and increasing levels of remittances. This chapter asks to what extent these trends are contributing to the country’s development in four sectors: the labour market, agriculture, education, and investment and financial services. Drawing on the IPPMD surveys and data analysis, the chapter finds both positive and negative effects on development.

In order to provide an empirical foundation to the analysis of the links between migration and policy, the Interrelations between Public Policies, Migration and Development (IPPMD) project used three evidence-gathering tools: a household survey, a community survey, and interviews with representatives of public, international and local organisations to provide additional qualitative information about the migration context in Armenia. This chapter explains how the sampling for the survey was designed, as well as the statistical approaches used in the chapters that follow to analyse the impact of emigration, return and remittances on key policy sectors. The chapter includes a brief overview of the survey findings, including differences across regions and between migrant and non-migrant households. It outlines some of the gender differences that emerged among migrants, and their reasons for leaving and returning.

This chapter presents the current state of sanitation services in Armenia including environmental impact. It considers the status of sanitation services for rural and urban communities and residential, commercial and industrial users and also forecasts trends on the demand and supply side. The chapter considers the adequacy of service and operational considerations throughout the sanitation supply chain from collection, to treatment and discharge and reuse. This chapter analyses the investment needs for the sanitation sector in Armenia and considers objectives such as achieving universal coverage with “improved” sanitation and investment in new wastewater treatment facilities. It also considers the need for strategic investment to mitigate deterioration of existing infrastructure.

This report analyses planned infrastructure projects, decision-making frameworks related to infrastructure development and strategic planning documents in the six countries of the EU Eastern Partnership: Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. It compares current investment flows with countries' national development objectives to identify misalignments and provides policy-makers with recommendations to improve the integration of climate change and other environmental concerns into infrastructure development decision-making processes. The report presents a comprehensive overview of infrastructure investment, primarily in the transport and energy sectors, throughout the region and identifies the risks and opportunities emerging from current investment patterns.

This chapter explores simplified Environmental Management Systems (EMS) in detail, and develops the concept for a proposed simplified EMS for Armenia. The chapter begins with the experiences and approaches of different EU countries in using simplified EMS. This is used as a springboard to build up the proposal for Armenia. For the simplified EMS, detailed step-by-step instructions are included for each level, accompanied by illustrative examples from EU countries. While the EMS was developed for Armenia at the behest of the stakeholder, the guidance is potentially applicable to other EAP countries.

European Neighbourhood East countries have been actively engaged in improving service delivery for citizens and businesses for some time. Some have opted for flagship initiatives (often with large-scale, one-stop shop solutions), some for digitalisation of services, while some have taken an incremental approach towards the service delivery modernisation process. This comparative paper outlines the state of play in the design and delivery of public administrative services in Armenia, Azerbaijan, Georgia, Moldova and Ukraine. Public administrative services cover the vast array of interactions with (and within) government: making enquiries, applications, registrations and payments, and receiving information, documentation, decisions and funds. These contacts allow service users (citizens, businesses and non-governmental organisations) to exercise rights, access entitlements, execute obligations and achieve ambitions. As well as the description and analysis of the general service delivery framework(s), institutional set-up and practical implementation, this paper presents a comparative analysis of a set of life events and highlights inspiring practices from the different countries.

The SME Policy Index: Eastern Partner Countries 2024 – Building resilience in challenging times is a unique benchmarking tool to assess and monitor progress in the design and implementation of SME policies against EU and international best practice. It embraces the priorities laid out in the European Union’s SME Strategy for a sustainable and digital Europe and is structured around the ten principles of the Small Business Act for Europe, which provide a wide range of measures to guide the design and implementation of SME policies. This report marks the fourth edition in this series, following assessments in 2012, 2016, and 2020. It tracks progress made since 2020 and offers the latest key findings on SME development and related policies in the countries of the Eastern Partnership (EaP). It also identifies emerging challenges affecting SMEs in the region and provides recommendations to address them. The 2024 edition benefits from an updated methodology that also offers a deeper analysis of policies to support the digital transformation of SMEs.

The SME Policy Index: Eastern Partner Countries 2020 – Assessing the Implementation of the Small Business Act for Europe is a unique benchmarking tool to assess and monitor progress in the design and implementation of SME policies against EU and international best practice. It is structured around the ten principles of the Small Business Act for Europe (SBA), which provide a wide range of pro-enterprise measures to guide the design and implementation of SME policies. This report marks the third edition in this series, following assessments in 2012 and 2016. It provides a comprehensive overview of the state of play in the implementation of the ten SBA principles, and monitors progress made since 2016. It also identifies remaining challenges affecting SMEs in the Eastern Partnership (EaP) countries and provides recommendations to address them based on EU and international good practice examples. The 2020 edition also features a novelty: An assessment of three new dimensions going beyond core SME policy (competition, contract enforcement and business integrity) looking at key structural reform priorities that are critical to establishing a level playing field for enterprises of all sizes and ownership types.

Since 2000, the Armenian government has pursued a pro-active approach to supporting SME growth. Key developments were the establishment of an SME policy implementation agency, creation of an SME Support Council and, currently, work on a new SME strategy. Armenia has achieved the highest scores in the areas of operational environment as a result of recent and extensive deregulation initiatives. The SME Development National Center Fund (SME DNC Fund), an efficient and geographically far-reaching SME agency, offers effective SME support tools such as business services and training and information centres, particularly for start-ups. Armenia further supports SMEs in building its export and innovation capabilities. Despite these improvements and the government’s declaration that SME development is a strategic priority, the sector still needs a strong and viable development strategy and effective policy implementation mechanisms. According to the SBA assessment, key areas which should be given priority are SME financing, innovation and export promotion.

This chapter describes the need for market reforms and discusses options available to the sanitation sector in Armenia. The chapter presents the fragmentation of the sanitation sector in Armenia and the impact this has on sector efficiency and impact upon public health and environmental performance as a key driver for reform. Five modes of service supply are explored with recommendations made on the implementation of the preferred model including the role of Government and incentives in the reform process.

This chapter presents the current situation with regard to financing of the sanitation sector in Armenia. The shortfall in available funds from existing traditional sources such as tariffs is presented with the chapter considering options for generating additional revenues from tariffs. The current public funds available for sanitation are discussed and options are considered for increasing funds through reform of existing funds or creation of new funds.

This report assesses the state of Armenia’s sanitation services, which are in poor shape, and proposes ways forward for reforming the sector by: ensuring equitable access by all and identifying solutions that work for the poorest and most remote communities; generating economies of scale and scope, and reducing both investment and operational costs for the efficient delivery of sanitation services; and moving towards sustainable cost recovery for the sanitation sector, by identifying how much funding can be mobilised from within the sector and how much external transfers are required. The state of Armenia’s sanitation services are inadequate, with 51% of the population in rural areas using unimproved facilities, causing direct damage to the environment and exposing inhabitants to health risks, and better access but degraded sewerage-system infrastructure in urban areas, posing health hazards due to potential cross-contamination between sewage and drinking water. According to preliminary estimates, EUR 2.6 billion of investments will be required to meet Armenia’s sanitation needs, with approximately EUR 1 billion needing to be spent in the next 7 to 10 years. Given the country’s current economic situation, this investment will have to be spread over time and targeted to avoid further deterioration of infrastructure and increase of the financing gap.

The transition from a centrally planned to a market economy is not an easy process and has required strong political will and wide ranging economic reforms in the countries of Eastern Europe and the South Caucasus (EESC).

Armenia is missing opportunities to harness the development potential of its high rates of emigration. The Interrelations between Public Policies, Migration and Development (IPPMD) project was conducted in Armenia between 2014 and 2017 to explore through both quantitative and qualitative analysis the two-way relationship between migration and public policies in four key sectors – the labour market, agriculture, education, and investment and financial services. This chapter provides an overview of the project’s findings, highlighting the potential for migration in many of its dimensions (emigration, remittances and return migration) to boost development, and analysing the sectoral policies in Armenia that will allow this to happen.

Good governance of public agencies requires the application of a set of regulatory and managerial tools to find the right balance between autonomy of agencies and adequate oversight from portfolio ministries and other actors. This paper provides insights from EU and OECD good practices, with a detailed analysis of EU acquis requirements for national regulatory agencies. New empirical evidence shows that public administrations in the Western Balkans and European Neighbourhood area lack clear policies and regulations for agency governance and misinterpret the EU acquis. This leads to a proliferation of agencies, duplication of functions and waste of public resources, a lack of accountability to portfolio ministries and generally a governance vacuum. Implementation of government policy is blocked and democratic accountability generally undermined. Finally, recommendations for better organisation of public administration are provided, based on the empirical analysis and lessons learned from SIGMA's engagement in such reforms.