Ambassador Richard M. Mills
American Chamber of Commerce
Tuesday, October 09, 2018
This is a bittersweet evening for me. While I am delighted to be here once again at the invitation of the American Chamber of Commerce in Armenia, I know it is for the last time, as my tenure as the U.S. Ambassador to Armenia is rapidly drawing to a close.
It is tempting, at a time of imminent departure, to place the focus on the past, gazing back with a hint of nostalgia. But I don’t want to spend too much time looking back this evening – Armenia is firmly focused on its future, and rightfully so.
But before I share my thoughts about the future trajectory of the U.S.-Armenia relationship, I do want to bring you back to the four priorities I formulated during my first year in Armenia to guide the Embassy’s work during my tenure as Ambassador.
No good bureaucrat would ever risk giving his or her work a public report card, but I do want to assess those priorities as I leave Armenia and what has been accomplished.
Some of you will remember that I outlined these priorities during my first speech to this Chamber after spending months listening to Armenian officials, members of the business community, including those from AmCham, the Armenian-American diaspora community, and everyday Armenians – young and old – whom I met during my travels across this magnificent country.
These four priorities established my framework for broadening and deepening our ties with the Armenian government, business community, civil society, and people.
I want to start with two of my priorities that dovetailed in the past year with the remarkably peaceful transition of power that transpired in April and May: The first priority was partnering with Armenians to fight corruption, and the second was working to strengthen democratic institutions, human rights, and civil society in Armenia.
Now, let me be clear – I am not clairvoyant. Contrary to what many on social media have speculated, neither I nor my staff at U.S. Embassy predicted the events of April and May. But what I did know, after speaking with people all over Armenia was that there was a growing sense of frustration in the country. Frustration with a political system that many Armenians felt no longer represented the will of the people and allowed corruption undermine democracy and economic progress.
This growing sense of public demand for change was in the air. We – like all of you – were aware of it, and if I confess that I did not initially see the “My Step” movement as the agent for change, we knew that change was imminent. And it was this sense, voiced over and over by the Armenian people that propelled me to speak out against corruption and the Embassy to support Armenian voices, groups, and those in the previous Armenian governments who wanted to make Armenia a fairer, more transparent society.
So while I could not have predicted the transition would happen when it did, I saw the seeds of change. I am fortunate to have seen those seeds blossom into a new, evolving Armenia that has given so many Armenians hope for the future of their country.
I like to think that in a small way, by helping over the last decades to amplify the Armenian voices fighting corruption and giving support to Armenian groups and those government officials who wanted to make Armenia a fairer place, the U.S. Government and Embassy helped those seeds of change take root and grow into the peaceful events of last Spring. But have no doubt – those events were Armenian-led and Armenian-driven movements, despite what some social media trolls and others in foreign media may claim. The Armenian people and those around the movement that launched last April and May are responsible for its success – and now responsible to ensure its success. Anyone who argues that there were outside influences or conspirators behind those events denies the free will and the power of the Armenian people to chart their own course.
And I have learned that betting against the power of the Armenian people to affect change and persevere is always the wrong bet and bad history.
The Government of Armenia has asked us for support in its fight against corruption – through our sharing of U.S. legal assistance on implementing corruption investigations, how we track stolen assets, and use corruption prosecutions to recover stolen funds. We are doing that. And we are also actively looking for creative ways to provide advice to the Armenian Government on policy reforms particularly through USAID, as well as through the legal reform programs implemented by the Embassy’s Office of International Narcotics and Law Enforcement.
We want to assist Armenia in making long-lasting, sustainable institutional changes in the justice sector and law enforcement that will assist in achieving an Armenia free of the corruption that stifles investment and economic growth.
This leads me to what was my next priority, which, being here today with the American Chamber of Commerce, I would be remiss if I did not emphasize: To deepen business and trade relations between our two countries, in order to boost Armenia’s prospects for economic growth. And I am pleased that the Embassy made considerable progress on this front – often working alongside AmCham, whose efforts have been invaluable to advancing our shared goal of fostering trade and investment ties between the United States and Armenia.
In particular, I would like to salute the AmCham for its work on the “Responsible Business Network” project, which has been nominated by the American Chambers of Commerce in Europe for a Creative Network Award.
Over the course of my tenure, the U.S. Embassy has supported many new U.S. investments in Armenia, large and small, and we’ve facilitated new opportunities for partnership with the United States in a range of sectors, including renewable energy, agriculture, tourism, and information technology.
We have seen hundreds of millions of dollars’ worth of investments come from the United States in recent years — clear evidence of a deep and abiding interest in Armenia and its future. I take pride in our efforts to support Contour Global, for example, which is investing $250 million to rehabilitate the Vorotan Hydroelectric plant.
This investment continues to create jobs and support Armenia’s energy security. Major hospitality brands from the United States have continued to expand their holdings in Armenia, which will help build the country’s tourism industry. And my colleagues and I have been able to bring together representatives from U.S. business and U.S. government to discuss how to ensure Armenia has a responsible mining sector, create opportunities for U.S. companies to open franchises in Armenia, and how to bring world-class technology from the United States to grow the country’s agriculture sector.
Through USAID’s My Armenia cultural heritage tourism program, we are bringing new life to rural communities and bringing new sources of revenue to Armenian families.
In August, the Executive Vice President of the U.S. government’s Overseas Private Investment Corporation, David Bohigian, traveled to Yerevan to promote U.S. investment in Armenia. He helped launch the Gazelle Fund, an investment fund that provides business advice to small and growing Armenian enterprises and provides the financing these enterprises need to expand their businesses and create jobs, but often can have trouble accessing.
And of course we remain committed to furthering our bilateral cooperation through the Trade and Investment Framework Agreement, or “TIFA,” Which was signed between the governments during my first year in Armenia. TIFA remains vitally important as we seek to expand trade and investment opportunities between our two countries.
These examples, plus many others, speak to the strength of our economic relationship and the great potential for its future, provided we continue to work together, remain focused on our mutual interests, and the Armenian Government provides a stable, rules-based business environment in which Armenian and U.S. business can operate. I’ll return to this latter issue shortly.
My final priority as Ambassador – improving our communication of U.S. foreign policy to Armenian audiences – is the most difficult to evaluate. But it is no less important. Developing mutual understanding between Armenians and Americans is crucial to deepening the bilateral relationship. Over the last three years, I made a point to travel all over Armenia and speak to various groups, from school students to government officials.
I encouraged my staff at the Embassy to do the same – and they did so. Last year, both American and Armenian Embassy staff members covered the country, meeting with beneficiaries of U.S. assistance programs from Gyumri and Vanadzor to Kapan and Meghri in celebration of the 25th anniversary of the establishment of diplomatic relations between the United States and Armenia. Their travels highlighted our partnership with the Armenian people, the legacies of U.S. assistance in Armenia both positive and negative, and sparked ideas from Armenian about what the U.S. Government’s role in Armenian’s development should be in the future. Ideas we have taken on board at the Embassy and in Washington, D.C.
We also discussed policy issues at our five American Corners – more than 70,000 Armenians visited our corners last year to hear about U.S. foreign policy and share their views back.
Did this effort help Armenians understand the United States better? I can’t assess that now, and it’s a long-term effort of course, but what I do hear when I speak with Armenian students, business people, and journalist is a better understanding of U.S. policies in the region and around the world. I also hear Armenian who are more informed about specific concerns that they may have about U.S. policies and about the role they want Armenia to play in the world. I think that is positive and good news for our relationship.
I am proud of what our Embassy has accomplished over the past three years together with the Armenian people. But I know – as will my successor — we should not let past achievements overshadow the work that still needs to be done.
Armenia has undergone remarkable changes in the past six months. As the country continues to evolve and charts its own democratic path, know that the United States will stand with you as a steadfast partner and friend – that is the message my successor will bring with her from Washington. Now that the Armenian people have clearly stood for change, the hard work of achieving a successful, peaceful, and lasting transition for Armenia lies ahead. As we look ahead, I want to share with you what will be the measure for the U.S. Government of a successful transition.
I think the priorities I had during my time here will provide the framework for our assessment. A successful transition will ensure continued progress in the fight against corruption.
A successful transition will produce a multi-party parliament, chosen in credible elections, with a loyal opposition in place, and a clear public mandate to take action. A successful transition will create opportunity in a variety of economic fields and produce jobs for this and the next generation of Armenians. And a successful transition will help foster an inclusive, open economy that will give foreign and Armenian companies and businesses the confidence they need to invest and grown their businesses in Armenia.
Let me share, as a friend of Armenia, my thoughts on each of these measures of a successful transition, starting with the Armenian economy. In recent years, many resources and much attention have been devoted to developing the IT sector – and the United States is proud to have played a leading role. Since 2007, in partnership with flagship U.S. companies such as IBM, Microsoft, National Instruments and Sun Microsystems, USAID has invested $7.6 million and leveraged $11.1 million in private and public resources into Armenia’s ICT sector, as many of you know in this room.
But going forward, if Armenia really wants to create an economy that provides opportunities for all Armenians and creates the jobs needed now to halt the migration of so many Armenians to find work in other countries, then further developing the IT sector is only one part of the solution We all should celebrate Armenia’s burgeoning world-class information and communications technology sector, but the Government and Armenia’s international friends must not lose sight of the importance of developing a diverse, robust economy that generates opportunities and jobs for prosperity in Yerevan, in smaller cities, and in the rural regions.
Creating the conditions for such an economy requires facing current realities and doing the necessary hard work. I think it is a reality that growth in the IT section is important, but that sector will not provide the jobs needed right now in Armenia. That is why the Embassy remains convinced that in the short to mid-term there must be attention paid equally to the often less glamorous but job-creating sectors that have real potential in Armenia: tourism, agricultural exports, the mining sector, clean energy, and light manufacturing. I am concerned about signals I am hearing that some in Government see the IT sector and related high-tech sectors as where the Government’s limited resources should be focused. I’m aware of resources that have been shifted away from sectors like wine production, tourism, and mining for this reason.
It is ultimately Armenia’s decision what sectors of the economy it develops, of course, but I urge that attention be paid to ensuring an economy that is diverse, that benefits from the stability of many sectors, and can create employment across the country. The U.S. Government will continue to support efforts in to create that kind of economy for Armenia and Armenian workers.
In the context of Armenia’s economy, the hard but necessary work includes things like strengthening domestic competition, advancing regulatory reforms, and promoting private sector development. It is critical that Armenia overcome structural barriers in the economy such as weak protection of international property rights.
Most importantly, at this crucial moment in Armenian history, when so many foreign investors and businesses, following the events of April and May, are taking a fresh look at opportunities to do business in Armenia, it is crucial that the Government send the right signals to the investment community. Signals that it understands the need for a consistent, rule-based business environment, in which investors know they have a partner in the Government that will act in good faith to resolve disputes.
And that is why I am concerned by the current situation involving the Amulsar Mining project and its major corporate investor, Lydian International. This is the single largest Anglo-American investment in Armenia and one that I have closely followed during my time as Ambassador.
You all know the statistics – almost a half a billion dollar investment that has created hundreds of jobs, already sparked significant economic benefits to the surrounding communities, and when fully operational could be one of the largest tax payers in Armenia. Yet operations at the mine have been completely shut down – for nearly four months – in the absence of evidence of significant violations of Armenian environmental laws, nor of any evidence of corruption involving the project. Hundreds of Amulsar’s employees are now out of work.
I understand the sincere and valid concerns many Armenians have in light of the history of the mining sector in this country. Those concerns need to be heard by any Government, and it is commendable this Government is listening to them.
Foreign investors, looking at Armenia, will be sophisticated enough to understand should the Government take action against a mining project because of findings of environmental damage or corruption, but I fear they will not understand why the Government has allowed the Lydian mine to be closed by a sincere but small group of protesters, in the absence of any legal decision. And shutting down the mine now is especially premature because the project is still in its pre-mining construction phase. There is no mining activity underway now.
As a friend of Armenia, I fear that if this issue is not resolved soon it could put a large cloud over the attractiveness of Armenia as a place to do business. I know that the Prime Minister and his senior advisors understand my concerns and are attempting to balance the competing interests here to find a solution.
I urge them to do so quickly and in a way that ensures the future of the project is handled in accordance with the rule of law.
I am confident, if issues like Lydian can be resolved quickly and in a fair way, Armenia will continue to move forward. And in so doing, this country will win the attention of U.S. and other foreign investors who will provide the capital and know-how needed to build Armenia’s economy
The other measure of success for the transition ahead will be continued progress on corruption. Let me applaud the Government and people of Armenia for the tough, concrete steps we’ve seen the few months to go after wrong-doers and send the message corruption will no longer be tolerated. I am pleased that the Armenian political leaders, in and out of the government, know that in an Armenia that is truly “open for business,” corruption will have no place.
But defeating corruption requires it be rooted out with respect for rule of law and that there be both prosecutions and systemic change. It requires holding leaders accountable and creating independent courts and strong institutions. But is also requires each and every citizen to take a hard look at the corruption they see in their own communities, to refrain from partaking in it, and to call it out when they see it.
And on that front, I am optimistic. Armenians don’t want to live in a corrupt society – I have heard that loud and clear. They want to live in a country where the rules are clear, and where they are same for everybody. We saw this in April and May of this year and again in Yerevan just a few weeks ago with municipal elections that were largely respectful, calm, free, and fair. The public trusted the results, and the parties congratulated the winners and acknowledged the elections were fair.
That attitude needs to grow and take root. I am confident that it will.
And also important to a successful transition will be Armenia’s continued commitment to a strong civil society and free media. It is crucial, in particular, that civil society retain its watch dog vigilance on institutions and government, offering practical, constructive ideas to spark debate and progress. Open and inclusive civic discourse is the key to true democracy. So I say to my civil society and media friends, don’t let your guard down or become complacent. One of the lessons of other post-transition societies is that often civil society will embrace, after years of criticism and attack from a government, a new government that is more welcoming to them and even invites some members to join the government.
The urge to be “easy on your friends” is human and understandable, but resist it – now more than ever in Armenia or any post-transition your voices are needed to ensure accountability and to expand the space for diverse opinions.
As Armenia navigates through this transition, as it works to strengthen the business environment, ensure continued success in fighting the culture of corruption, and ensure a strong civil society and free media the United States will continue to support you on the journey.
In fact, I am proud to announce this evening, that the United States will increase assistance funding for Armenia in the coming year.
The U.S. government recently provided more than $14 million in additional foreign assistance for initiatives in Armenia following the political transition, and in the coming year we intend to provide more than $26 million in foreign assistance funds, an increase of approximately $20 million above what had been requested for Armenia.
These funds will support anti-corruption efforts and strengthen civil society and the media. The funds will also advance U.S. foreign policy priorities to increase business and trade opportunities for American and Armenian companies including by supporting energy reforms as well as Armenia’s information technology industry.
These funds are a public statement by the USG that we support the Armenian people and government in their transition to the new chapter of this country’s history that is now unfolding.
Let me end by describing how personally pleased I am, as I depart to see how Armenia has become a more visible player on the international stage. From participating in the recent Summit on improving the humanitarian response to the refugee crisis in Syria, to continuously fighting for the rights of Christian minorities, to committing to Genocide Prevention work in Geneva, to participating in peacekeeping missions in Kosovo and Afghanistan, to partnering with NATO and cooperating with UN allies – I and the U.S. Government are very pleased to see you at the table on these issues of such great importance to our world. Armenia has a voice that must be heard in the global community.
Yet this increased interest in Armenia and Armenia’s growing role in global affairs also comes with challenges. As a responsible member of the international community, stepping up to make its views heard, any Armenian Government will have to make difficult decisions, take difficult stands when members of the international community engage in behavior that contradicts global norms and Armenia’s own values. That is never easy to do, and often requires balancing immediate national interests with long-term interest in global security and stability. I recognize that Armenia is in a unique geographical situation – yours is a tough neighborhood. But the guiding principle I believe that will and should govern Armenia’s foreign policy decisions in coming years is a simple one. You are a sovereign nation, beholden to no one, free to make your own decisions about what will most benefit your country and the Armenian people.
Six months ago, who would have thought we would be where we are today? A year ago, some believed that only violence would create political change. I challenged that view, because I firmly believe that political change comes from the will of the people. And that is what we saw this spring in Yerevan and across the country. And that is what we continue to see. The Armenian people are speaking out, rising up, and demanding peaceful change.
As I said, this is Armenia’s moment. Don’t let the opportunity pass. And know that you have a friend in me, eagerly watching – albeit from afar in Canada– to see how high you can soar.