What are the biggest issues facing Armenia’s economic development today?
1) The government is unable to work effectively with, or for the people.
2) The government lacks transparency, legitimacy, meritocracy, and resources.
3) The diaspora is not fully incorporated with the state of Armenia.
So, lets look at viable solutions for each one of these problems in detail.
The government is unable to work effectively with, or for the people. What does this mean?
The Armenian government lacks the ability to work with the people, which is mostly caused by being overly bureaucratic. As Eric Hacopian, the Armenian political scientist for Civilnet stated, in the past if you wanted to get something done, you had to pay a bribe, and it would happen. Since Pashinyan has come to power, you cannot pay the bribe, and you cannot get anything done.
Bureaucracy in the transitional economies of Europe and the former Soviet Union, is quite different from the civil service familiar in most western market economies. In Western countries, the stated ideal of bureaucracy resembles the Weberian model of a professional civil servant, distinct from the political structure of government, selected competitively on the basis of their merit, with rule-based decision making, and a predictable career path that assures tenure despite changes in political administrations.
Transitional economies of the post-Soviet Union, in contrast, inherited bureaucracies from their Socialist pasts, based on a very different model, with different rules and norms of behavior, where the distinctions between bureaucratic and political structures, or for that matter between bureaucracy and the legal system, bureaucracy and commercial enterprises, or bureaucracy and civil society, are only beginning to emerge and the lines of demarcation are still fuzzy and in flux.
In a report from July 2020, from Gan Integrity, it stated, “Businesses operating or planning to invest in Armenia face high corruption risks. Progress has been made to fight pervasive corruption; however, the close relationship between oligarchs, and political and business circles, raise concerns about cronyism and influence. The Criminal Code criminalizes several forms of corruption including active and passive bribery, extortion, and abuse of office. Gifts and facilitation payments are also considered illegal in Armenia, nonetheless, these practices are widespread.”
The Armenian government lacks the ability to work for the people, which is most evident by the fact there are currently 49 active political parties, in a country of only 3 million people. No matter who comes to power, or has a seat in the parliament, there is a large segment of the population that is not represented effectively. Furthermore, the Armenian diaspora, which makes up most Armenians, is almost unrepresented at all! The failure of the Armenian state, to effectively represent or integrate the 8 million Armenians living abroad is inexcusable.
The Armenian community is divided in how to interpret the recent events taking place, with debates raging for multiple interpretations.
What if there was a better way? In a single word, federalization. The main reason Armenia suffers from systemic failures in leadership, is the fact Armenian leadership is overburdened, and there is too much expected of them. Before the leader is elected, they have already been setup to fail, through ineffective institutions and unreasonable expectations. To effectively manage the wide range of issues facing the Armenian state and people today, we need a division of power, so that each person in each section can be held responsible for their successes and failures.
The Armenian nation is surrounded by hostile neighbors, a fledgling democracy, landlocked without access to a port, facing serious brain drain with waves of emigration abroad, somewhat self reliant in agriculture, but completely reliant on the will of other powers to interact with the outside world.
When we look over the globe, what other successful democratic nations could Armenia look to and emulate? Many have suggested the Nordic model, but those do not fit very well, and do not consider the long history of colonization, and plentiful natural resources. Others say the Israeli start-up is one we can use, but that state gets substantial financial and military support from the United States. In fact, the only example in the world that can best match the Armenian situation is Switzerland!
A little more than 150 years ago Switzerland was in the exact same situation as Armenia today. It was a relatively poor, agriculturally based nation, landlocked, and facing threats of assimilation from much larger, and more powerful nations on all sides. Which prompted them to take decisive action and adopt a federal constitution on September 12, 1849. Today, Switzerland is the closest state in the world to have a direct democracy, allowing citizens to challenge any law voted by the federal assembly. The Executive, Judicial, and Legislative branches of institutions are organized by smaller canton regions, and even smaller community levels. Unlike most other European powers, there is no official President or Prime Minister, nor is there an official capital, but the nation’s citizens hold the ultimate power of the country.
Each canton or region has its own rights to craft a constitution, parliament, government, and courts. The cantons and communes or communities, have the authority over a wide range of local matters, such as education, schools, hospitals, police, tax collection, and more. Whereas, the federal government is responsible only for the national issues, that the smaller cantons and communes cannot handle. The Swiss electorate have the option to vote at least four times on matters of national interest each year, and have direct say on what goes on in each level of government. If you are dissatisfied with a particular law or elected official, instead of waiting for them to leave office or someone else to change it, citizens have 100 days to collect 50,000 signatures to amend it.
What better way for the government to work for and with the people than in a federal direct democracy?
The government lacks transparency, legitimacy, meritocracy, and resources.
Also, what about corrupt and incompetent officials? A federalist system has two unique benefits, when the pinnacle of power lays in hands of the people. Elected officials on all levels are forced to become transparent, and as public servants in the true sense of the words, must provide data to the public. The Swiss government publishes videos, articles, and other information for the public to access, on why they should or should not make a certain choice in voting, how they are managing funds, etc. The division of powers in the federalist system of governance, makes it nearly impossible for any corrupt politician, as each level of governance can be held accountable.
When Armenians say, “If not Pashinyan then who?” This is the wrong way to think about things. After thousands of years of survival at the crossroads of civilizations, there should never be a situation where we can only rely on one man, or one party for our future. When it comes to who, we all are the who, but what we do not have is the how.
How can we train officials to become more meritocratic?
Meritocracy is an ancient concept founded in China 2,600 years ago, is based on Confucian concepts, and has become popular in Asian bureaucracy. Meritocracy emphasises civil servants should be chosen based on their merit, which is their skills, independence, professionalism, and given tenure, while they should be removed if they fail any of these areas. Essentially, it is the belief that the best skilled, and best educated person for the job is the most qualified, and their duties should be measured by their effectiveness at doing their tasks.
In a federalist system, the highest skilled people begin by working from the bottom. By gaining experience at the lower community levels, and building a track record with the people above and below, the public servant can move up to the canton or regional level. It is once they are at the regional level, that they are qualified to be chosen as one of a handful of ministers to conduct national level affairs. While some may argue that creating more levels of governance, would make governance less efficient, instead, what is created is a system that rewards effective leadership, and punishes poor leadership. The division of powers allows for no one person or group to become strong enough to influence affairs.
What we are experiencing today in Armenia, is in effect a legitimacy crisis. A federalist system which encourages meritocracy, helps to solve legitimacy, but these days we can integrate technology to become even more efficient and save resources.
You may not know this, but since 2005, Estonians have been able to vote online, and from anywhere in the world, with the use of block chain. Estonians have integrated block chain solutions in governance, since before people knew what block chain was. Estonians can log in with their digital ID card, and vote as many times as they want, before the deadline, with each vote cancelling the last. This technological solution has helped to protect Estonian voters against fraud, and promote trust in the government.
Branding itself the first “digital republic” in the world, Estonia has digitized 99% of its public services. And, in an era when trust in public services are declining across the globe, Estonia persistently achieves one of the highest ratings of trust in government in the EU. The Estonian government claims that this digitization of public services saves more than 1,400 years of working time, and 2% of its GDP annually.
Voting online is just the start. Estonia offers the most comprehensive governmental online services in the world. More specially, Estonia uses block chain technology to protect e-services such as the e-Health Record, e-Prescription database, e-Law and e-Court systems, e-Police data, e-Banking, e-Business Register and e-Land Registry. No more taking time off work, running around, filling out paperwork, lining up to get it stamped, now, everything can be done from your smart phone.
These e-services are part of the broader e-Estonia program, a movement to facilitate citizen interactions with the state using electronic solutions. One particular initiative that has been praised by its innovativeness and potential, is the e-Residency program, which was launched in late-2014, and allows non-Estonians to access services such as company formation, banking, payment processing, and taxation. It is aimed towards location-independent entrepreneurs such as software developers and writers.
By adopting block chain to assist almost all the functions of governance, we are on the cusp of a revolution in democracy and efficiency, the decentralization of governance. In the same way a few decades ago, people could not imagine how computers will become such a vital role in our daily lives, block chain technology is the next step in our digital revolution. Block chain technology is not only the most efficient, it provides transparency, is easy to setup and interact with, but most importantly boosts public trust.
The diaspora is not fully incorporated with the state of Armenia.
Regardless of where you are from, or where you are going, we are all part of an increasingly digital age, and as such, should search for digital solutions. Technology allows us to turn each weakness, into a strength, and the diaspora is no different.
Armenia is facing a brain drain, constant emigration, and the diaspora has been left feeling like nothing more than a helpless bystander to the Armenian nation. But, what if the fact that Armenians are employed in 140 different countries around the world, could be our greatest asset?
In a post Covid-19 world, the business community has been forced to accelerate a longer-term trend that was well in the making, a shift to online. The barriers between our co-workers have fallen, as more and more people can work from home and interact online. The diaspora is full of talented, well-educated, and successful individuals, instead of trying to bring them to Armenia, what if we brought Armenia to them?
What the diaspora needs most is just organization. Across the globe, a new economy is forming, a freelance economy, allowing people to take on jobs and roles across the planet. Famous websites such as Fiverr and Upstart, allow you to hire people from almost any country for your business, and pay per gig. What the Armenian diaspora is missing, is a similar site, where only Armenians can create profiles, upload resumes, advertise skills, discuss ideas and opportunities, all while collecting feedback from users.
A secretary in Glendale, can hire an assistant to help with data input from Yerevan. A lawyer in Brussels can use a translator in Rio De Janeiro, a convenience store owner in New York can hire an accountant in Seattle. A start-up in Armenia can seek investment from an investor in Moscow. The possibilities are endless, this is already occurring, and will only increase in the future as we become more interconnected. So, why don’t we have a site to engage all the talented Armenians of the world?