Key Accomplishment of 17 years of USG Assistance

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There are certain areas in which USG is a recognized leader and its assistance programs played an important role in promoting relevant reform. These areas include earthquake zone recovery, energy sector modernization, water regulation, civil society development, social protection and social insurance systems, and primary health care reform. In other areas, such as humanitarian assistance, privatization, tax/fiscal reform, SME development, financial sector, governance, and justice sector, USAID has worked closely with or complimented other donors reform efforts, primarily World Bank and IMF.

Key accomplishments of USG assistance portfolio under both categories are listed below:

Humanitarian Assistance (1992-1998)

During the period 1992-1995, the U.S. assistance program in Armenia emphasized food, fuel, medicine and clothing. From 1992-1998 a total of $750 million in American humanitarian assistance was delivered to Armenia. The provision of heating fuel to the vulnerable population and to schools, under the Winter Kerosene Program, provided the only source of heat to a large segment of the population for entire winters and the only source of heat for the majority of schools in Armenia. Each year 1993-1998 this program served over 200,000 households and over 1,200 schools. The program ended in 1999 at a reduced level. The U.S. also provided a heavy fuel oil, mazut, to central power plants over the period 1993-1995 which ended in 1996 in favor of provision of natural gas as part of restructuring of the state energy sector.

The U.S. wheat programs provided a life-sustaining food commodity during the period 1992-1995. During the peak years, the U.S. was supplying Armenia with half of its total requirements of wheat for bread consumption. U.S. wheat shipments were systematically reduced as privatization proceeded and domestic Armenian wheat production increased. In addition to fuel and wheat, additional assistance to alleviate suffering and assist social progress included $180 million in privately donated and Department of Defense excess property food, clothing, shelter, medicines, and medial supplies and equipment.

Privatization (1998-2002)

USAID assisted the Ministry of Privatization (later renamed Ministry of State Property Management) from 1998 to 2002. The primary objective was to develop a strategy for the privatization of Armenian Airlines (AA) and for the reform of the aviation sector in general. Other objectives were to assist the GOA with the privatization of other “strategic” enterprises (state-owned enterprises (SOEs) that were, or were likely to become, the focus of serious international interest) and to support the privatization of enterprises through bankruptcy and liquidation procedures. In 2001, the USAID Mission determined that support for general privatization of state-owned holdings would cease due to the shrinking pool of companies to be privatized, and since most enterprises could not be sold in an orthodox, transparent manner. The primary achievement was assistance in the privatization of five SOEs: the electronics producing enterprise Mars, Ararat Cement, Sapfir, Armenia's sole producer of synthetic sapphire, Yerevan Jewelry Factory and Almast. The work on the five strategic enterprises was frustrated not only by internal governmental issues, but also by last-minute withdrawals from qualified investors. USAID assisted in financial audit preparation, legal review, and a strategy for privatization in Armenian Airlines.