development Archives

Q&A: Why Armenia is rolling out diaspora bonds for development

August 16, 2018 By administrator

Babken DerGrigorian, an economic adviser and deputy minister of diaspora for Armenia.

NEW YORK — Armenia’s vast diaspora, estimated at 7-10 million people worldwide, is far larger than the resident population of this small, post-Soviet nation. The new Armenian government is now planning to leverage the support of its diaspora community for long-term, sustainable development work.

The government came to power earlier this year following a nonviolent protest movement, which saw opposition leader Nikol Pashinyan established as the country’s new interim prime minister. The change in leadership has been accompanied by a shift in how the government is approaching implementation of the Sustainable Development Goals.

Babken DerGrigorian, an economic adviser and deputy minister of diaspora for Armenia, joined the government in May. A native Californian of Armenian descent, he has an idea to fund development investment: Diaspora bonds. It’s a model that Israel and India have both used effectively, but it has been less successful in other places, such as Ethiopia.

The establishment of government-issued diaspora bonds — which Armenians outside the country could invest in, instead of funneling money into charities, as many of them currently do — is now underway. The government expects to release a formal strategy by the end of the year.

DerGrigorian spoke with Devex about how diaspora bonds function and why he believes this development strategy could work for Armenia. The conversation has been edited for length and clarity.

How did you develop the concept of a diaspora bond for Armenians?

We have a diaspora that is already very involved in charity, but the point is to leverage a small amount of charity intention for a much greater financial impact. These government bonds generally will be lower than the market rate of return, but still better than putting your money in a bank account. It is a win-win situation, in the sense that the government also gets access to cheaper credit on the international market, usually local currency.

The proposition you make to the diaspora is that instead of giving away money to charity as a donation, [you can] use your charity intention to take on the risk associated with local currency bonds.

“The diaspora’s financial contributions to Armenia should not only be based on some emotional attachment. It should rationally make sense for both parties to be sustainable in the long run.”

— Babken DerGrigorian, economic adviser and deputy minister of diaspora for Armenia

In general, governments use this money for development-related projects. In our case, it will all be used for SDG-related work, to move Armenia closer to SDG implementation, but of course just general national development projects also.

What made you consider diaspora bonds as an option that could work for Armenia in particular?

This is something I have been researching for a while, especially because I am diasporan. The Armenian diaspora relationship has always had a financial component to it, but essentially it has always been a charity-based relationship. I started thinking about how that money could be spent in a much better way for development projects. It slowly snowballed from there. We had our [political] revolution and I ended up in this position. It is the perfect opportunity to make something like this happen, especially since the revolution was very positively received in the diaspora.

Are people from the Armenian diaspora primarily supporting Armenia through donations or remittances?

It is both. The new diaspora generally has been more remittance based, and the traditional has been more [focused] toward charity and benevolent work. For example, the All Armenia Fund has held an [annual] telethon since 1994, and has raised about $300 million [so far]. While this might not seem like a lot, we know the charitable intention is already there … Our goal with the diaspora bonds is to leverage this for much greater financial power.

So the idea is to transform charity donations into something that is more sustainable?

Yes, and it is about moving from the emotional field to a more rational relationship. The diaspora’s financial contributions to Armenia should not only be based on some emotional attachment. It should rationally make sense for both parties to be sustainable in the long run.

How much money is the government hoping these bonds can generate?

This will ultimately depend on the strategy we settle on, but my view is that the first — and perhaps second — issuance is going to be a proof of concept with a short maturity, which will be used to demonstrate the viability of the instrument and ensure trust among the diaspora.

As such, I’d like to see these funds used to finance ring-fenced development projects with direct revenue generating capacity, such as solar panel farms … Eventually, I’d like to see an annual issuance of diaspora bonds with longer term maturity, for more general budgetary support, but again aimed at development projects — perhaps those without a direct revenue stream but with high multiplier effects for broader economic growth.

What are the biggest gaps in Armenia’s development work that need more support?

This is going to help us move forward on our SDG implementation. That is one of the necessities of any project we do.

The money is going to end up [benefiting] infrastructure, education, and energy, initially. But it is important to set up the parameters of what types of projects we want to do and what ministries can offer.

By Amy Lieberman,

Source: https://www.devex.com/news/q-a-why-armenia-is-rolling-out-diaspora-bonds-for-development-93275

Armenian premier briefed on Sevan Startup Summit development prospects

December 8, 2017 By administrator

During a consultation held today at the Government, Prime Minister Karen Karapetyan was briefed on Sevan Startup Summit development prospects and opportunities.

The Sevan Startup Summit 2017 was said to have hosted about 4000 participants and guests from 23 countries of the world. The total sum of transactions at the close of the Summit exceeded the mark of USD 200,000, while the prize fund overran the planned 40 thousand to stand at USD 50,000, the Government’s press office reported.

During the Summit, the startup teams have the opportunity to get in touch with each other, as well as with entrepreneurs, professionals, reporters, highly qualified software developers and investors from both Armenia and abroad.

The Summit is planning to expand its geographical coverage in 2018 and hold a number of events in various countries around the world, called “Seaside Stargate Summit.” Welcoming the event, Prime Minister Karapetyan stressed that the Government is prepared to provide the organizers with the necessary support.

AUA’s Turpanjian Rural Development Program Opens Its Doors in Vayots Dzor

November 6, 2015 By administrator

YEGHEGNADZOR, Armenia—Despite heavy rains, the official celebrations on the occasion of the much-anticipated opening of the American University of Armenia (AUA) Turpanjian Rural Development Program (TRDP) office in Vayots Dzor went ahead as planned.

The well-attended event, complete with a red ribbon-cutting ceremony, took place in Yeghegnadzor, Vayots Dzor on October 29. About 40 people were present at the event, including the very first TRDP beneficiaries of Vayots Dzor who had come from the region’s different villages and towns, community leaders, representatives from the regional government’s office, religious leaders, as well as TRDP Chair Dr. Haroutune Armenian, AUA Vice President Ashot Ghazaryan, and TRDP staff members.

During the event reception, food products produced by successful TRDP-supported businesses from other regions of Armenia were made available to the guests: high-quality honey produced by Mr. Seyran Gevorgyan from the village of Kamo, Shirak; lavash produced by Mr. Harutyun Khachatryan from the village of Anushavan, Shirak; and “floss” cheese produced by Mr. Gurgen Abovyan in the border village of Koti, Tavush. The high quality and taste of the food impressed the guests, and the success of the older TRDP-supported businesses further encouraged the 13 new beneficiaries from Vayots Dzor, who plan to establish their own ventures in their communities soon.

Since the creation of AUA-TRDP in 2006 through a generous donation by Gerald Turpanjian, the program has expanded to include Nagorno-Karabakh Republic and the regions of Shirak and Tavush in Armenia. A representation was also set up in Javakhk, a largely Armenian-populated region of Georgia. The program is aimed at promoting sustainable development in the rural communities of the Republic of Armenia, the Nagorno-Karabakh Republic and Javakhk by offering continuous training and advisory services for business plans, developing skills necessary for entrepreneurial activity, as well as providing financial assistance.

Since its inception, TRDP has conducted trainings in entrepreneurship and entrepreneurial skills for residents of more than 900 communities, contributing to the launch of over 250 businesses and the creation of over 400 jobs in rural communities. TRDP also encourages beneficiaries to give back to their communities, once they become successful entrepreneurs.

In his speech, Dr. Armenian highlighted the key to the program’s success. “One of the key points of program’s success is Gerald Turpanjian’s readiness to finance the program to whom we are very grateful. The second determinant of success is that, at TRDP, there is no director: we are all partners and work in direct collaboration with each other to achieve the economic development of rural areas of Armenia, Artsakh & Javakhk. And finally, the program manages to deliver the expected outcomes because it doesn’t blindly impose itself on every region. The specifics of each region is taken into account,” Dr. Armenian stated.

Dr. Armenian also mentioned that entrepreneurship is an important aspect of Armenian culture, which served as one of the foundations of TRDP’s mission. Encouraging entrepreneurship and personal initiative among the villagers would lead to the people themselves developing their communities, rather than waiting for others to do so. “This is the way of thinking the program encourages. It’s a new way of thinking among the people–that you yourself should take the initiative, earn your living, and contribute to the development of your community. We want to bring this culture, this way of thinking to Vayots Dzor, but we need to learn a lot from you as well,” Armenian appealed to the gathered guests.

In his own appeal, Mr. Ghazaryan drew attention to the fact that AUA aims to create equal opportunities for all regions in Armenia, and emphasized the importance of the program’s offerings in entrepreneurial training and adult education.

Representatives from the regional government expressed their deep appreciation for the excellent job that TRDP is carrying out in their region and for the new jobs that would result from the establishment of TRDP-supported businesses, which would help keep families from leaving their homeland and contribute to the improvement of socio-economic conditions in rural areas.

His Holiness Abraham Mkrtchyan, Primate of the Vayots Dzor region, blessed the organizers of the program and their positive contribution to Armenia, “God bless the program and all of its participants,” he said in a prayer.