Ambassador Tracy: American Chamber of Commerce Policy Speech

Ambassador Tracy: AmCham Policy Speech

I am honored to be representing the United States of America here in Armenia – and I have been keeping very busy during my first two and a half months here.  I think I have now met with every minister as well as many other representatives from across the Armenian government and parliament.  I have also met civil society groups, students and members of this Chamber.  These meetings all helped me understand first-hand the incredible breadth of our bilateral relationship.

Just last week, our two governments recommitted to strengthening that relationship during the U.S.-Armenia Strategic Dialogue here in Yerevan.  Foreign Minister Mnatsakanyan hosted a high-level U.S. delegation, with representation from the U.S. Agency for International Development and the Department of Commerce, as well as several State Department bureaus.  Our talks focused on how we could deepen cooperation on a range of issues, from global and regional security to promoting mutual prosperity, and from law enforcement to assistance in support of democratic reforms.  We had a positive agenda, focused on the opportunities, but also addressed the challenges.

Following the strategic dialogue, we were pleased to sign assistance agreements of up to $16 million.  We also launched a new USAID initiative to support Armenia’s democratic reform agenda.  We will develop the details of this initiative in consultation with stakeholders, but broadly speaking, we intend to offer technical assistance to the government, promote economic empowerment and community development, facilitate small-scale infrastructure and service delivery improvements, and strengthen information campaigns on Armenia’s reform and development process.

But that’s not all.  During last week’s dialogue, we showed our commitment to assisting in the development of a transparent, fair, and independent criminal justice system by dedicating the Armenian-American Friendship Hallway in Armenia’s Justice Academy.  We also committed to expanding English language training for Armenian students and teachers, and agreed to establish a Master’s degree program in American Studies at an Armenian university.

I am very pleased with the fruitful and frank discussions between our delegations last week, and I am proud that our dialogue resulted in a number of tangible outcomes.  Of course the question now is, how do we continue to build upon this dialogue?   Since my arrival, I have often been asked about my plan; about what I hope to accomplish as U.S. Ambassador to Armenia.  The short answer is this: It is my job to represent the interests of the United States in Armenia, and it is in our interest to support the development of a sovereign, democratic nation.

The fact of the matter is the United States has supported democratic processes and institutions in Armenia for the last 27 years – ever since we officially established diplomatic relations.  That priority has been consistent.  What has changed is Armenia itself.  I don’t need to tell you that democracy in Armenia is stronger than ever.  And as the events of last spring showed us, change starts with and is driven by Armenians.  It was the people of Armenia who flooded the streets last April.  It was Armenians across the country who stood up and demanded the right to live in a free and democratic country; the right to live in a country where government, civil society, and businesses work together in a free, fair, and transparent manner to create a more prosperous future for all.  And while I am proud that the United States was the first foreign country to provide elections assistance after the events of last spring, it was the people of Armenia who exercised their right to vote in a free and fair democratic election last December.  I plan to continue to support the Armenian people as they make choices to develop and solidify their democracy in a way that bolsters the rule of law and protects human dignity.

I have spent the last few months in listening mode because I wanted to hear the voices of Armenians and the future they envision for their country.  I wanted to learn about Armenia’s priorities so I could determine how the United States can best capitalize on our shared values to ensure a mutually beneficial path forward.

I am especially encouraged by the government’s efforts to root out corruption and promote transparency.  This will help level the playing field and signal to the international community that Armenia is a country that respects the rule of law and is open for business.  This is particularly important given the strong potential for an improved U.S.-Armenian economic relationship.  A stronger trade and investment relationship will support our mutual desire to secure sustainable and inclusive economic growth, achieve greater economic diversification, and foster competition and innovation.  And of course, innovative, dynamic business leaders and entrepreneurs contribute their expertise to help grow the domestic economy and compete internationally.

We can point to several recent successful developments in these areas.  Over the past few years, we have witnessed sustained U.S. business interest in the Armenian market in the hydroelectric, IT, finance, retail and agricultural sectors.

This includes ContourGlobal’s purchase of the Vorotan Cascade Hydro Power Plant, a deal involving $250 million worth of investment.

It also includes the work of our Overseas Private Investment Corporation, or OPIC, which has recently provided three loans worth $20 million to the First Mortgage Company – the first private residential mortgage finance company in Armenia.  OPIC has also supported the expansion into Armenia of the Gazelle Fund, an investment fund that provides business advice to small and growing Armenian enterprises and provides the financing they need to expand their businesses and create jobs.

But, there is still a great deal of untapped potential in our economic relationship.  Armenia’s strong economic growth in recent years, over 7% in 2017 and 5% in 2018, demonstrates the potential for ongoing robust growth – but only if the business environment is conducive to sustained economic activity, investment, and innovation.  Businesses are looking for Armenia to continue its efforts to create a fair, predictable, and transparent investment climate.  We look forward to seeing the Armenian government pursue serious reforms that eliminate corruption, strengthen institutions, and bolster the rule of law.

For our part, the U.S. Embassy will continue to engage the Armenian government and private sector as we pursue business facilitation efforts and demonstrate the very best of what U.S. companies have to offer:  their world-class technology, unrivaled know-how, and highest standards of business culture.  We engage with U.S. companies every day as they look to Armenia as a destination for making new investments and expanding their operations.  We will continue to support them as they seek out new partners here and we will advocate on their behalf where appropriate as we deepen our trade and investment relationship.

Investment and innovation in the IT and STEM fields as a means to drive economic development is just one of many shared values between our countries.  Armenia stands out on the world stage for its deep stock of human capital.  The Armenian people are known as innovators and visionaries in numerous fields.  Of course, maintaining this prized position requires constant attention and effort, and I have every confidence Armenia is up to the challenge.

I recently attended my first hackathon – a remarkable, innovative concept where teams of technologically-minded young people get together to solve pressing problems facing their country.  For me, it was the perfect example of how government, civil society, and youth can work constructively together to improve government transparency, accountability and efficiency through the innovative use of technology.  I was proud that the U.S. Embassy was behind this initiative and that we could offer small seed money to the winners to develop the projects they dreamed up at the hackathon.  One group came up with a prototype of an electronic mechanism to improve irrigation systems – a project that would ensure more effective use of scarce water resources and support Armenia’s critically important agricultural sector.  Again, the government cannot carry out all the needed reforms on its own – in a democracy, it needs help from the people.  It needs vibrant and robust partnerships among all sectors of society.

One constant refrain I hear in my conversations with Armenians about the economy is that economic development outside of Yerevan is vital to Armenia’s overall economic success.  I believe them.  I’ve already met Armenians from all over the country who are innovative, motivated, and eager to contribute to their country’s prosperity – and that motivation needs to be nurtured.  Especially when those ambitions are coming from young people – the future of this country.  We must do all we can to keep them in Armenia, and to empower them to achieve their dreams.

One young woman I met during a recent trip to Gyumri is doing just that.  Gayane Ghandilyan is spearheading the development of Armenia’s IT sector as a Chief Operating Officer at the software development company Digital Pomegranate.  Her work is directly tackling the challenge of attracting talent to Gyumri.  The Embassy is committed to supporting leaders like Ms. Ghandilyan in their efforts to drive economic recovery and development in Gyumri and in other regions of Armenia.  But it is important for local and national government to also work to create the necessary conditions to recruit and retain talent outside of Yerevan.  It would be a shame to overlook the tremendous talent and potential contributions of Armenians all over the country.

The United States has shown our commitment to regional development in Armenia through our assistance programs.  Through collaboration with our Armenian partners, these programs help this country grow as a sovereign and democratic state.

Since 1992, the U.S. government has provided more than 2 billion dollars in assistance funding to improve the lives of the Armenian people, supporting their efforts to strengthen democratic, economic, and social governance.

In 2018, the United States provided $26.7 million in assistance funding to Armenia.  But this does not tell the whole story, since so many of our assistance projects span multiple years.  Right now, the total value of all of our active USAID grants and contracts in Armenia is $66 million.

Now that I’ve thrown a bunch of numbers at you, let me explain what all this funding does.  The goal is to help develop a more engaged, prosperous and well governed Armenian society through Armenian-led reforms and initiatives.  Fifty percent of assistance is programmed through the Government of Armenia and local organizations.  This strategy means projects are more cost-effective, more sustainable, and more relevant to local populations – because they start with Armenians.  And the impact of this assistance extends far beyond the immediate beneficiaries – it is a catalyst for additional investment which will drive inclusive and sustainable economic growth and create a brighter future for Armenians.

For example, I recently had the opportunity to participate in the launch of the USAID-funded Rural Economic Development-New Economic Opportunities Program to support Armenia’s critical agricultural sector by helping to improve the performance of rural businesses and their ability to meet quality standards.  This project will benefit at least 100 rural businesses in at least 60 rural communities over the next five years – creating economic opportunity all over Armenia.

This is just one example of the many positive outcomes of our bilateral relationship.  Of course, like in any relationship, we do not agree on everything – and that’s OK.  The important thing is that we have open lines of communication on all issues – even the more challenging ones.  And we do!  Open and honest dialogue between friends ensures that our relationship will continue to progress.

Progress, in our view, means strengthening Armenia’s democratic institutions, which will drive economic development and opportunity, which in turn ensures Armenia’s sovereignty and security, giving you the freedom to make your own choices, including choosing to move toward further integration with the West.

Armenia has already shown its commitment to partnering with the United States in the international arena in many ways.  For instance, we value Armenia’s work with NATO in the Partnership for Peace – including your participation in NATO missions, such as the Resolute Support Mission in Afghanistan.  Armenia is a solid partner with the U.S. European Command, promoting regional stability in Kosovo.  And Armenia’s strong partnership with the state of Kansas and the Kansas National Guard has resulted in fifteen years of fruitful exchanges that have brought our countries closer together.

Of course, we recognize that our relationship does not exist in a vacuum.  We understand and appreciate that Armenia has a plethora of bilateral and multilateral international relationships, and, as a sovereign, democratic country, makes choices according to its own national interest.  We also understand that as a reality of geography and history, Armenia maintains strong ties to Russia.  But I think most Armenians agree with me that the Armenia-Russia relationship should not and does not preclude Armenia from also pursuing strong, mutually beneficial relations with the United States, the European Union, and other potential partners.  And while Armenia’s geography and history link it to Russia, your values connect you to the West.  These relationships are not mutually exclusive.  Foreign affairs is not a zero-sum game.

So just as we seek to strengthen coordination and cooperation with our European allies, we will continue to work with Russia on issues of common interest, including working together toward a resolution to the Nagorno-Karabakh conflict under the auspices of the OSCE Minsk Group format.

Today, I am more encouraged than ever with the Minsk Group process.  It has been a long road and there are no easy solutions, but the events of recent months have led me to believe that progress is possible.  High-level meetings between the sides, a reduction in violence and tensions, agreement on next steps and a commitment to continued dialogue show that progress is not out of the realm of possibility.  And I am hearing from Armenians – especially young Armenians – that they are ready for progress.

It is because of this enthusiasm and great potential of this generation of Armenians that the U.S. Embassy remains committed to investing in the youth of Armenia.  Some of you may have seen my introductory video that outlined a few key U.S. policy priorities.  At the beginning of that video, I met a young woman named Yeva – she is an alumna of our FLEX exchange program for high school students.  Yeva is a perfect example of why we invest in these types of programs – we are investing in Armenia’s human potential – men and women.  Yeva is committed to her country and proud to return to Armenia and use her U.S. experience to better herself and create opportunities for others.  The Embassy will continue to invest in programs like this that broaden horizons and build human potential through experience in the United States.

The good news in Armenia is of course, as I have mentioned, the motivation to continue to drive change in society is alive and well.  As I have seen repeatedly in my brief time in Armenia, Armenians are invested and engaged in improving their future.  They already know that change starts at home.  Solidification of the democratic gains that have been achieved in the last year depends on Armenians.  But I pledge to you that the United States is here as your friend and partner to support you as Armenia continues to move forward, develop its democracy, strengthen its economy, and build space for peace and prosperity.