From Relief to Development

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The United States has been actively engaged with Armenia since it achieved its independence in 1991. Building upon shared values and the strong personal ties and commitment of the Armenian-American community, the two countries have forged a strong partnership. One of the key elements in that partnership is a significant program of assistance, in which USAID plays a prominent role.

Historically, USG has been the largest bilateral donor in Armenia with substantial part of its portfolio directed to provision of technical assistance and training. The high level of USG funding (U.S. government assistance to Armenia was among the very highest per capita levels of assistance worldwide) has given the USG the ability to be heard at the highest levels of government. Additionally, USG’s long-term presence in Armenia has allowed for adoption of a long-term development perspective, which resulted in USG setting development goals and pursuing reforms that would not necessarily produce tangible results within one strategy period. These factors have given USAID a competitive advantage to employ a multi-faceted assistance approach whereby continuity and need to reform is balanced with more targeted and focused interventions. This approach is reflected in three subsequent strategies in which technical assistance to facilitate macro-level large scale reforms is balanced by direct assistance programs focusing on unmet needs and providing immediate assistance to the most vulnerable.

In 1988, an earthquake took over 25,000 lives and left about 500,000 Armenian families homeless. Shortly after, in 1991 Armenia’s economic structures and trade relationships collapsed, following independence from the Soviet Union. Border closures by neighbors Turkey and Azerbaijan, due to the unresolved conflict with Azerbaijan over Nagorno-Karabakh, exacerbated these problems. In response to these events, USAID began work in Armenia in 1992 by providing humanitarian assistance.

Starting 1995, as humanitarian crisis in the country began to lessen, USAID has shifted its focus from provision of direct humanitarian assistance to a more direct involvement with Armenian Government and other local and international partners in putting in place key macroeconomic foundations, development of legislative framework and establishing institutions necessary for effective functioning of a democratic society. With only a few exceptions, Armenia has developed a legal and regulatory framework consistent with a free market economy and a democratic political system. Less progress was made, however, in implementing and enforcing this legal framework. Therefore, the last two strategies emphasize empowering agents of change and shifting the assistance approach towards certain segments of the Government and civil society that have the potential of becoming a generator of national prosperity. Current and new programs thus focus on the enforcement of existing legislation, enhancement of organizational capacity of partner institutions, creation of favorable business and investment environment, and improved service delivery.

Currently, the global crisis poses new challenges for Armenia’s economy heavily relying on external sources of funding thus threatening to roll back economic gains of the past. Despite the fact that Armenia entered the crisis from a relatively robust position, the crisis is predicted to affect the country’ economic standing. Therefore, USG current programming aims to address effects of global crisis both on macro- and micro- level while supporting the sustainability and competitiveness of the country’s economy, the development of its democratic institutions, and its capacity to provide adequate health and social services to its citizens.