Speech by H.E. Mr. Robert Kocharian, President of the Republic of Armenia at the Bertelsmann Foundation
Berlin, 16 November 2006.
Ladies and Gentlemen,
I am delighted to join you here today. It is very natural that this talk is taking place in the Bertelsmann Foundation. Describing the processes unfolding in Armenia since independence, the most frequent word to be used is “reform” - economic, social, and political. There is virtually no domain of life which would not undergo serious reform after the collapse of the Soviet Union and transition of Armenia to democracy and market economy. We restructured our institutions, reviewed policies, overturned the structure of the economy. Everything was new and challenging. Unfortunately, this process was complicated by the war imposed on us, blockade, which still continues, and a severe energy crisis. We replied by intensifying the speed of transformations, mobilizing resources, and increasing the effectiveness of the governance.
Armenia is not rich in natural resources. However we are known for the most important of them - the human one. It is first of all expressed in the widely-recognized entrepreneurial and hard-working nature of the people. Our characteristic feature is the high level of motivation among the people to start private businesses.
To be able to fully benefit from these advantages, it is essential to establish favorable environment for business-oriented people, and provide safeguarded investment policies. This envisions liberalization of the economy and of trade regimes, establishment of competitive conditions and the minimization of the state’s interference in the business affairs. As a result, we witness serious changes in the structure of the economy, both in terms of its branches, and of property types. 85 per cent of the GDP is produced in the private sector, with over 40 per cent in small and medium businesses. We are particularly proud of this last figure. The middle class is in the process of formation. This seriously affects the public perception about own future.
Obviously not everything is smooth yet. We particularly feel a pressing need for a qualitative improvement of the tax and customs administration. The fight against corruption needs to be intensified at all levels according the action plan adopted by the government.
We also need to further develop the sector of financial services in Armenia. For that we have a good potential in the form of efficient banking system, which is being continuously upgraded. While we see a serious increase in foreign direct investments in Armenia, we know that there is still more to achieve in the upcoming future. In this regard I have to fully acknowledge and express our sincere appreciation for the technical assistance and direct involvement Germany has in this field in Armenia. The programs of technical assistance and financial cooperation implemented with KWF and GTZ bring a solid contribution in this regard.
Armenia’s accession to the World Trade Organization in 2003 pushed forward our integration into the world economy and made relations with our partners more predictable. Last year a joint study by the Wall Street Journal and Heritage Foundation placed Armenia 27th in its index of open economies globally. Effectiveness of the reforms is reflected in figures. In the last six years the annual growth of GDP averaged at 12.2 per cent. Foreign investments last year totaled at 500 million US dollars. Such progress allows our Government to address social problems, challenging our society. I would like to particularly emphasize the Poverty Reduction Program, which has been developed in close cooperation between the Government, international financial institutions, and Armenia’s civil society. That experience is used by the World Bank as a case study for the development of similar programs in other countries.
This year our government has announced another priority, which shall result in a systemic change in the society. We have launched a major program for the development of Armenia’s rural areas. Currently there is a big gap between the situation in the capital city and countryside. We have mobilized available resources, as well as have called on our Diaspora structures to take all the necessary steps to provide better quality of life to villages of Armenia. In our view this will provide incentives for young people to develop their regions, towns and rural communities.
Another competitive advantage we base our reforms upon is the high literacy level Armenia has. We intend to develop sciencereliant economy. We already have 2 per cent of IT share in the GDP composition.
Meanwhile, we fully realize that it would be impossible to explore that advantage without serious changes in our educational sector and in sciences. That is exactly why Armenia has committed itself to active participation in the Bologna process to adjust its education system to the European standards. We are currently also developing a comprehensive strategy of the reform for the fundamental and applicable sciences. In the difficult period of transition, the need to invest in people was somewhat neglected, and currently we attempt to make up for that delay.
Ladies and Gentlemen,
I have started my speech with the economic reforms and their impacts on the social field, since we are deeply convinced that sustainable democracy is strongly dependent on the state of economy. While we fully appreciate the importance of political vision and leadership for rooting the democratic values in the formerly closed society, we are strong believers of the democracy from below. It is not enough to create democratic institutions : without strongly motivated beneficiaries they would be rapidly corrupted and altered. In our view those capable beneficiaries of democracy are the small and medium businesses on one hand and the civil society on the other.
Today our government is deeply involved in the process of reforming our judicial sector. The first phase of that reform took place at the wake of independence. At that time we were just learning the rules of civil law in conditions of private property ownerships and in the system of democratic accountability of the state. Today we work towards deeper reforms, which would allow for a higher level of independence of the courts, and deeper respect for human rights. In close cooperation with German partners we now develop the system of administrative justice, which would regulate disputes between the state and citizens.
The years of independence have been marked by active involvement of the civil society in the life of the country. We are encouraged by the development of NGO sector. Today we witness more professional non-governmental organizations, which bring people closer to the political decision-making. All state institutions in Armenia have started to work closely with civil society groups.
Meanwhile, it is true that we continue to witness the major problem of NGO sector in any transitional democracy. NGOs, being relevantly a new phenomenon, often continue to be grantoriented, instead of being goal-oriented, and have a political agenda, aligning with various political parties.
Ladies and Gentlemen :
Last fifteen years have been the period of statecraft. Our accession to the Council of Europe five years ago provided framework for the legal reforms and institution-building. WTO membership allowed for a quicker and more motivated transition towards liberal economy. Thinking about continuing the reforms, we watch the European Neighborhood Policy as a new benchmark. In our perception the Action Plan signed lately in Brussels is the new roadmap of our reforms. Armenia intends to develop an efficient cooperation with the European Commission and strengthen bilateral ties with EU member-states. This would allow for intensive political dialogue, more trade, active social and public interactions, and higher mutual security involvement. We count on German support and cooperation within this new framework.
Over the years Armenia has been consistently shaping its foreign policy, based on the concept of advantaging from overlap of interests rather than exploitation of disagreements existing in our region. This has allowed us to combine perfect relations with Russia, EU, United States, and Iran. It is also an important part of transformation of our country and society. For decades, living in the Soviet Union, we were trained to watch the world as black and white, representing enemies and friends. The policy of complimentarity also applies to our security model. Armenia is an active member of the Collective Security Treaty Organization, and at the same time has done a substantial progress on its cooperation with NATO. The Individual Partnership Action Plan has been approved, setting the framework for a long-term institutional cooperation.
Our vision of future of Armenia is that of a prosperous state in a friendly stable environment. Armenia has four immediate neighbors in the region. Much to our regret, with two of them we have no relations. Over centuries we enjoy good neighborly relations with Georgia, and very much hope that recent dispute between Russia and Georgia will be resolved shortly. We value our efficient and stable cooperation with neighboring Iran, with whom we cooperate in many spheres and have started significant infrastructural programs.
In contrast to this, another major neighbor - Turkey keeps Armenian border blocked. We even have no diplomatic relations with that country. In our view, being a member of NATO and craving the EU aspirations, Turkey had to shape more positivistic policy in the region. More than once we have proposed to establish diplomatic relations and this offer is still pending. We believe that neighboring countries should build-up their relations without preconditions, and moreover, without conditioning those by demands of a third state.
Armenia attaches great importance to regional cooperation.
We believe that the resolution of conflicts itself should not be regarded as a precondition for establishing dialogue and cooperation. Rather, the regional cooperation should be watched as a great trust-building measure, aimed at resolving existing disagreements. It is obvious, that unresolved conflicts hamper the process of natural development of the South Caucasus.
That is why we are committed to the peaceful settlement of the Nagorno Karabagh conflict. OSCE Minsk Group Co-Chairs works hard to bring closer our positions. Unfortunately, despite active negotiations underway, there is little room for optimism. Our principle stand is that the people of Karabagh have implemented their right for self-determination. It has been done in full compliance with the international law. Many currently independent states came into existence after former empires perished. Independence of Nagorno Karabagh was attained at the time of collapse of the Soviet Union. Moreover, it was the time of the end of the grand ideological divide. Nagorno Karabagh has never been a part of independent Azerbaijan. Through a successful construction of its statehood Nagorno Karabagh Republic has proved its right for existence. It regularly conducts democratic presidential and parliamentary elections. We witness the development of the civil society. A generation has already grown up, which considers itself to be the embodiment and safeguard of that statehood. We do not recall any case of a nation willingly putting it down independence it has been enjoying for over 15 years. No one has intention to do it in case of Karabagh. We speak about irreversible changes that took place in the people’s mentality.
Ladies and Gentlemen :
I have outlined the main lines of the economic, societal, and political change underway in the Republic of Armenia. Transition is a process, not an event. It does have the beginning but never an end. In my view the viability of a nation is rooted in its capacity to comprehend the need for a change and its readiness to transform itself. We know that despite the existing positive dynamic the transformation of our country is only in its early stage. But we have vision for its goal and commitment to the process.
Thank you for your attention.
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