20 Years of Economic Engagement: Rethinking Values and Approaches Vahé Heboyan Development Economist

Objectives Facilitate exploration and understanding of development Promote use of development factors in designing intervention strategies and policies Discuss Diaspora potential in promoting development Set the stage for further exploration and discussions

Diaspora Contribution Remittances FDI Art/Culture Healthcare Environment Foreign Policy Other Critical in disaster mitigation Earthquake Post-Soviet War Helped to avoid a potential catastrophe Ensured an existence

After 20 years… 22 years after earthquake a large # of people are still waiting for the promised housing Poverty gap is increasing Basic services are still unattainable for many Healthcare is far behind Education is slipping away Civil society is weak Government institutions are weak

After 20 years… What could have been achieved? Robust long-term development fundamentals Sustainability of Diaspora assistance Strong governmental institutions Empowered civil society Economic development

Question With the massive flow assistance from Diaspora and foreign aid, why did not we achieve all these?

Answer is in us… Failure to follow the concept of economic development Lack of coordinated long-term strategy Within Diaspora With Armenia (gov. and others) Lack of sustainability clause in Diaspora assistance Lack of accountability Failure to reform government institutions

Economic Development? Note that growth was primarily dominated by non-tradable sector that did not add into capacity and longer term sustainability (re: DG) Source: www.bized.co.uk

Economic Growth a common picture… Copyright: http://wvarmenia.files.wordpress.com/2008/12/229288407_dfa6e10b15_o.jpg Economic growth... Copyright: Flicker: Anne Onimous Economic growth does not taken into account income distribution A small proportion of the population can own a large amount of the wealth

Economic growth is often confused with development Economic growth: A measure of the value of output of goods and services within a time period Economic Development: Organizing a country’s resources and institutions to produce and distribute more goods and services, and to sustain regular social progress and rising prosperity (-Justin Yifu Lin, 2010). A measure of the welfare of humans in a society Source: www.bized.co.uk

Armenia 2030… Long-term strategy Capacity building Infrastructure Human Economic Industrial revival Sustainable jobs Knowledge Infrastructure Empowerment www.proseandletters.com

The Diaspora Challenge… Re-evaluate approaches, priorities, and strategies to Armenia’s development and assistance Ensure interventions and assistance Are directed to building capacity Have a long-term focus Are sustainable Reach the recipient Less distortion Less corruption / nepotism More efficient resource allocation and intervention delivery Larger impact in a long run www.proseandletters.com

how? 1+1 › 2

our aim…