August 30, 2013 | 13:45

By Anna Ghazaryan

Armenian News-NEWS.ampresents an interview with USAID Mission Director
in Armenia Dr. Karen Hilliard.

One of the most notable of USAID programs in recent years has become
"Support to Armenia-Turkey Rapprochement Project". Do you think
"people's diplomacy" could weaken the objective obstacles that have
been and still exist?

I think that people-to-people projects are a key part of breaking
down the barriers between these two countries. It is important to
bear in mind that our "Armenia-Turkey Rapprochement Project" was
designed right around the time when the protocols were signed with the
expectation that they would be ratified. In terms of people-to-people
contacts, business linkages and civil society linkages and projects
are important. But these were to accompany the government-to-government
dialogue that everybody thought would ensue.

The project overall did a number of important things, such as to
establish business ties, to establish cultural contacts, for example
bringing Armenian and Turkish filmmakers together. The overall goal of
the project was not achieved, because the government-to-government
portion was stalled. Even in view of the official obstacles, it
continues to be important to foster business and cultural ties because
over time they do break down the stereotypes and pave the way at the
grassroots for an acceptance a political solution. While the gains
in civil society and business have been modest, it is important to
stay the course and hope for better day.

USAID conducted a campaign within the framework of "Monitoring of
2012 Parliamentary and 2013 Presidential Elections project" to inform
voters and then held monitoring of the elections. The program ends
in 2014. What work will be done after the elections are over?

This program was designed to bracket the electoral period. We funded
"It's Your Choice"in the period before the elections, through the
elections and after the elections. Clearly improving political
process is not something that you do only right before election,
so it is important from our point of view to support "It's Your
Choice"through the end of this grant, in order to develop their
organization internally and work on methods of sustainability after
the USAID grant ends. It is important for NGOs like "It's Your Choice"
to work on their internal structure, work on fund raising so they could
diversify their funding sources. At the same time it is important to
maintain the emphasis even after elections on transparency, on the
need for public structures and formal government at the national,
regional and local level to remain accountable to the people that
elected it. That is why the program continues after elections. Going
forward, we will be emphasizing elections less and anti-corruption,
transparency, local governance and civil society participation more,
in order to take advantage of the five-year period between the major
elections. We will work with civil society and government to improve
their relationship, to bring them closer and inculcate a philosophy
within the government that it must be accountable to its constituents.

IT sector in Armenia has long been supported by USAID: previously
by CAPS project, now - by EDMC, ITT. What is the reason for so much
attention to this industry? What do you think are the prospects for
development of this sector in Armenia?

First of all we pay a significant attention to the IT sector in
part because the government has prioritized it, but it would be a
mistake to think that IT gets an exclusive or just disproportionate
emphasis from USAID. We are in fact working on four sectors: IT, the
pharmaceutical industry, agribusiness and tourism. All of them are
an important part of the government's industrial and economic strategy.

IT continues to be important for several reasons. First of all it is a
knowledge-based industry that raises the level of available employment
for Armenians and offers very well educated workforce, opportunities
to use its brain power. Secondly, the IT sector is not dependent on
open borders. You can still succeed here with closed borders, too.

Thirdly, it takes advantage of natural abilities of the Armenian
workforce. IT also is a sector where there is an open field for
medium-sized and small business; there is no monopoly that one has to
break to be successful. We are working to encourage startups, small
businesses; secondly, to continue to training of the workforce here
in Armenia. Thirdly, we are looking to apply IT to other sectors,
such as health, tourism. We think that sophistication is such that
we can make the next step and not simply develop IT for its own
sake but begin to mainstream IT approaches across the economy. IT
has tremendous prospects to develop other sectors, and this is the
reason we think IT is so important.

Alternative energy projects were promoted within the framework of
"Water and Energy". What are the prospects of using alternative energy
for the consumers?

We do have significant investment in the "Clear Energy and Water
Project." USAID works with the government of Armenia to regionalize
the energy market generally, in particular fostering ties in energy
sector betweenArmenia and Georgia. The US government supports
maintenance and safety of Metsamor NPP. Given the fact that the
country is arguably over-reliant on nuclear energy, the plant is
ageing and it requires more investment and safety as times go by, and
given the ecological concerns , it is important for Armenia to begin
diversify its energy sources beyond nuclear and beyond hydro. USAID
is engaged in alternative energy in number of ways. First of all,
we have been very active in reforming the regulatory environment
for running small hydros. The concerns about micro hydro are of
an environmental nature. It is important that these micro hydro
enterprises do business in environmentally sustainable ways.

We did a number of activities concerning solar and wind technologies
in the Armenian villages, but these technologies require significant
capital investment. Even if the villagers want to switch to these
technologies, they do not have money to make the initial investment.

This is one of the reasons that it is important for the government to
pursue a decentralization policy and strengthening of local government,
including more revenue sharing at the local level and giving them
the means of generating of additional revenue themselves, so that
they can make investments in this type of thing.

Several weeks ago you launched Finance for Economic Development
(FED) Program. What goals does it pursue? What do you expect from
this program?

I think, traditionally, the focus of the financial sector of Armenia
has been on banking and traditional financial instruments, such as
bank loans. One of the objectives of FED program is to make other
financial products available, such as insurance policies, stocks,
bonds that give investors other options, besides simply putting their
money in banks. In addition, what we try to do is to work with the
central banking system to persuade banks that in fact making loans
to small and medium-sized enterprises is not as risky as they might
think. There is a perception that making those kinds of loans to small
traders is highly risky. Part of this has to do with a cultural shift:
to begin opening up their vision regarding who is worthy and who is
not, but there is also work on regulatory environment.

Black Sea Silk Road Corridor (BSSRC) Project is not only a very
interesting project aimed at promotion of tourism, but it is also a
project presenting the history and culture of the region. How will
Armeniabenefit from this project?

This project is a cornerstone of our strategy to improve the tourism
sector in Armenia. If you were born inArmenia, grew up here and lived
here all your life, you tend to ignore the cultural richness around
you. But if you are someone like me coming in, who has never lived
in Armenia, you look around and see the wealth of culture, history,
architecture, archeology, religious history. There is so much to see
here and so much to learn. The issue is how you package it and market
it to tourists.

This is where USAID is placing its emphasis in the tourism sector.

This project is aimed at taking advantage of the rich culture
and history of Armenia, doing proper marketing, proper packaging
of tours and helping increase information available at particular
sites for the tourists to understand what they are seeing. BSSRC is
important because it helps to market what Armenia has to offer. This
is important because it is a cross-border initiative, and it is one
more way that we can help break down institutional and psychological
barriers that exist in this region. If people look at it as a whole
and say: "I want to visit the Caucasus, so I will spend a little time
in Armenia, in Georgia, and then a little time in Turkey," it begins
to ease those barriers and to break down the walls.