Presentation given to MIB (management of innovation) students at Copenhagen Business school before arriving at Armenia in May 2012

1. Armenia
Land of opportunity? - a overview
1

2. • Introduction
• Overview
• Corruption
• Democracy deficit
• Conflict
• Infrastructure
• HIV/AIDS
• Closing remark
2

3. About Jacob Taarup
• External Lecture at CBS
• 10 years as manager within the Aircargo
industry
• Specialised in Management and Quality systems
• 6 years as “management”-Consultant working
within:
• Communication
• CSR and Business Ethics
• Diversity/Gender
• Governance, Risk and Compliance
• Blogger at sriportfolio.com and other sites (SRI and
CSR issues) 3

4. Central Asia?
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5. GDP according to the World Bank
Armenia Denmark
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6. Economics
Inflation Growth
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7. Environment
Agriculture Electrical power
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8. Setting up shop in Eastern Europe and
Central Asia
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9. Armenia
• Region: Eastern Europe, Central Asia or Western Asia (depending on
perspective)
• Lower middle Income (USD1,006 - 3,975)
• GNI: USD 3090 (World Bank, 2012)
• GDP Growth: 4,6%
• Inflation between 9,2% (2010) and 4,3% (2011) (estimated)
• Pop: 3,259,000 (Armenia National Statistical Service, 2010)
• Poverty 35,8% (under the poverty line according to the World Bank, 2012)
• Ethnic groups: Armenian 97.9%; Yezidi 1.3%; Russian, Greek, and other
0.8%.
• Religion: Armenian Apostolic Church (more than 90% nominally affiliated).
• Languages: Armenian (96%), Russian, other.
• Education: Literacy--99%.
• Health: Infant mortality rate--20.21/1,000. Life expectancy--74 years.
(World Bank, WHO, Armenia
National Statistical Service)
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10. Focus of development and business
Corruption
Democracy
Other…
deficit
HIV/AIDS Conflict
Difficult access
Low capacity
(infrastructure
in labor force
etc)
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11. Corruption
• Corruption is operationally defined as the
abuse of entrusted power for private gain
(Transparency International)
– "according to rule" corruption and
– "against the rule" corruption
• The cost of corruption is four-fold: political,
economic, social, and environmental.
– The effect of corruption on the social fabric of
society is the most damaging of all.
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12. The 2011 Corruption Perceptions Index is based
on 13 independent surveys
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13. Armenia
• Score of 2.9 on a scale of one to ten.
• Ranked 129 of 178 surveyed countries just
after Vietnam and before Eritrea. Which is 6
places lower than in 2011
Transparency International, 2011
13

14. • Survey done with 1956 citizens by the
Armenian Centre for National and
International Studies in 2004
• Most (42%) thought that Corruption was a
political phenomena
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15. 15

16. 16

17. 17

18. 18

19. Democracy deficit
• Stable democracies characterized by good governance in
which the individual´s rights and freedoms are respected
are a prerequisite for sustainable development in keeping
with human dignity. (Swedish MFA)
– Rule of Law
– Democratic structures in place
• Cooperation should be undertaken with NGOs and civil
society forces that work to achieve openings for democracy.
In other cases, such as where civil society is small or non-
existing, the focus should be on communicating an
awareness of democracy, human rights, gender equality
and market economy. (Sida)
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20. Conflict
• In political terms, "conflict" can refer to wars,
revolutions or other struggles, which may
involve the use of force as in the term armed
conflict.
• War is a phenomenon of organized violent
conflict, typified by extreme aggression,
societal disruption and adaptation, and high
mortality.
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21. • It is estimated that • that 378
378,000 people died
due to war each year
between 1985 and
1994.
21

22. Armenia and Conflict
• Ranked 109 by the Major issues were
Global Peace Index out • Relations with
of 154 in 2011. neighbouring countries
• Ease of access to small
• Denmark is ranked as arms and light weapons
no. 4 in 2011. • Willingness to fight
(Score 4 out of 5)
22

23. infrastructure and difficulty of access…
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24. Infrastructure
• Mobile access, internet
• Roads
• Water
• Energy
• Means of transportation available (public
transportation)
• Existence of basic structures (hospitals,
schools, universities)
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25. Some Infrastructure highlights
• Around 20 phones per 100 people, Internet users are
around 6.
• Roads and Railways need significant updates as much have
been build during the Soviet period. However, significant
investments are being made in the area.
• Almost 24 Hr water coverage in major cities while there
might be some issues in rural areas.
• Efforts to diversify energy dependence includes
hydroelectric power, Iranian oil pipe, Nuclear power.
• Significant difference between urban and rural basic
infrastructure challenges due to degradation of equipment.
OECD, 2009, EBRD, 2009,
Armenian Transport Dev. 25
Strategy, 2020

26. CSR-Gender Group Copyright 26

27. HIV/Aids
• Human disaster
• Social long term effects
• Access to quantity and quality of employees
• Market demand
CSR-Gender Group Copyright 27

28. • 2000 reported 29 cases in total
• 2011 182 new cases
• Per 100’000 Citizens
– 45,1 Shirak
– 41,9 Yerevan
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29. Doing Business
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30. Key Challenges
• To translate the recent economic boom into sustainable growth that
moderates the real sector effects of the global financial crises by promoting
diversification of economy;
• To address the lingering post-privatisation flaws in the corporate sector by
phasing out monopolies, promoting competition, and improving transparency,
as well as corporate governance, across all sectors of the economy;
• To improve the business environment by, inter alia, tackling corruption,
including politically-motivated interference in the private sector, and
emphasising the rule of law;
• To continue to strengthen the financial sector through institutional
development and consolidation, as well as through putting in place
appropriate mechanisms for developing the securities markets;
• To foster commercialisation of public infrastructure and utilities, with an
emphasis on transparency and governance;
• To accelerate Armenia’s regional integration, including working within the
framework of ENP. EBRD, 2009 30

31. THANK YOU
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