By Areg Bagdasarian

After the fall of the Soviet Union, Armenia has retained strong ties with Russia, while at the same time finding areas of political, economic and social cooperation with Europe. These relations between the European Union and Armenia are governed through the framework of the EU-Armenia Partnership and Cooperation Agreement signed in 1996 and implemented in 1999. With the continued enlargement of the European Union, the EU launched the European Neighborhood Policy Instrument which Armenia became a part of in 2004. Specifically, the Armenian government finally adopted ENPI on November 14, 2006. A national indicative program (NIP) was also adopted by Armenia, covering the period from 2007 to 2010 with a total sum of 98.4 million Euros allocated.

Along with the ENPI national program, Armenia has benefited from the ENPI regional and interregional programs, plus other thematic programs like the European Instrument for Democracy and Human Rights (EIDHR)

But before analyzing the relevance of these EU actions and progress in terms of political will, political conditionality and the channeling of aid to government structures and NGOs, it's important to analyze the current state of affairs in Armenia. Specifically, understanding the state of democracy/rule of law, human rights, and the growth of civil society in today's Armenia will provide the basis for understanding whether EU cooperation through ENPI, EIDHR and NIP have been effective.

In terms of democracy and the rule of law, Armenia's recent objectives have been to strengthen the stability and effectiveness of institutions guaranteeing democracy and the rule of law through judiciary reform, civil service reform and intensifying the fight against corruption. Reforms related to the 2005 Constitutional reforms were undertaken in 2007 - this lead to the improvement of the legislative framework regarding inter alia the separation of powers (including increased powers for the National Assembly and improved local self government), the independence of the judiciary, the Human Rights Defender (HRD) and freedom of the media. The new legislation will need to be effectively implemented and further legislative amendments are needed to comply with the requirements of the new constitution.[] Improvements to local self-government have also been made with the draft law on the city of Yerevan allowing for indirect elections of the city's Mayor being approved in early December of 2007.

Parliamentary elections were held in May of 2007 in accordance with Armenia's OSCE commitments and general democratic standards for elections. The 2008 presidential elections in February were conducted mostly in line with international standards (according to the OSCE); however the public still has concerns about the election process with respect to some voter fraud allegations and the unequal treatment of presidential candidates. After the elections a 20 day state of emergency was declared in Yerevan, with several injuries and around 8 deaths; temporarily shaking the confidence of the European Commission on the recent democratic gains made in Armenia.

In terms of economic and social reform, Armenia's macroeconomic framework has been solid through 2007 and into 2008. Overall the economy grew at a double digit rate for the sixth consecutive year with growth driven mostly by the construction sector, service sector, and remittances from abroad. The overall growth rate through the end of 2007 was 13.7%.1 According to the Central Bank of Armenia, the overall growth rate for the second half of 2008 (3rd and 4th quarters) is forecast to be between 10 - 13%. Specifically, the 16 - 17% growth in the construction sector forecast in the second half of 2008 can be attributed to expected investments in the transport, communication, energy metallurgy and chemical industries. For the 1st quarter of 2009, the overall growth rate of Armenia is forecast to be 8 - 11%. In the 1st quarter of 2009, the construction sector is forecast to grow 12 - 14%. On the services side, the real value added growth in the services sector is expected to reach 10 - 12% in 2008 as a whole. The rate of increase in the services sector is estimated at 10.7% for January-June 2008. A rate of increase of 11.5%-13% in the services sector is forecast for the first half of 2009. Finally, the real value added growth of industrial output in Armenia was 2.7% in the 1st half of 2008. The growth was mainly due to high rates of increase in the production of alcoholic beverages, building materials, as well as due to the recently recorded uptrend in energy output. But again, industrial output lags far behind the real drivers of Armenian growth - namely construction, services, and investment/remittances from abroad and there is some concern that economic growth should be driven more by industrial output; especially if there is a slowdown in the construction boom that's been happening in recent years. Other general concerns for the Armenian economy include the appreciation of the AMD, the depreciation of the US dollar, and the general tightening of the world credit markets as exacerbated by the housing crisis in the United States.

In terms of overall fiscal and monetary policy, the central bank raised its refinancing rate twice, and there was a budget surplus of .1%. Unemployment in 2007 was reported at 7% of the workforce. Also of note, many international donors' assistance programs are supporting the agricultural sector in Armenia with the hope of increasing employment in the rural areas and increasing the efficiency of the agricultural sector although agriculture represents a smaller portion of GDP in 2007 than it did in years past. Finally, Armenia has reduced the poverty rate with the proportion of the population still living under the poverty line dropping steadily to 29% in 2007 with those in extreme poverty now at only 6.5% of the population

With respect to human rights, Armenia's recent objectives have been to strengthen respect for human rights and fundamental freedoms while ensuring the independence of the media. This has been accomplished by strengthening the independent regulatory body for public and private broadcasters, promoting freedom of assembly and ensuring the equality of men and women in society and economic life. For example, amendments to the law on television and radio in February 2007 were created to balance the mix of the national television and radio committee. New legal provisions under the criminal code introduced in April of 2007 seek to create conditions whereby hindering the professional activities of journalists is punishable by law. Although the government has made a strong effort to promote the right of assembly, many opposition rallies were denied permission by the authorities and were confronted by police force during the run-up to the 2008 presidential elections. In fact, recent amendments to Armenia's Assembly law raise serious concerns.[] The amendments to the Law of the Republic of Armenia on Conducting Meetings, Assemblies, Rallies and Demonstrations, passed on 17 March 2008, were reviewed by the ODIHR's Expert Panel on Freedom of Assembly and the Venice Commission following a request from the Speaker of the Armenian Parliament.

"On the basis of a preliminary assessment, the Venice Commission and the OSCE/ODIHR Expert Panel on Freedom of Assembly do not consider the proposed amendments to be acceptable, to the extent that they restrict further the right of assembly in a significant fashion", says the joint opinion2.

This recent amendment is a threat to free speech, because it tightens provisions concerning spontaneous assemblies, as well as limiting the chance that a small event will develop suddenly into a bigger assembly. However, the disapproval of these measures as expressed by the Venice Commission and the OSCE/ODIHR has been shared with the National Assembly of Armenia on March 28th, 2008 and hopefully some action will be taken to make freedom of assembly an easier and less restricted task.

For women's rights, the national action plan of 2004-2010 is being implemented for "Improving the Situation of Women and Enhancing their Role in Society" since women remain underrepresented in the country's political life compared to men.[]

With some background on the current socio-political situation in Armenia, we can begin to look at how well various instruments such as ENPI and EIDHR are being implemented.

ENPI in Armenia is now focused on three major areas - Support for democratic structures and good governance, support for regulatory reform and capacity building, and support for poverty reduction efforts. ENPI addresses a limited number of priorities which are relevant to Armenia, but also have a regional impact on the Caucuses at large.

There are many examples of implementation capacity and political will visible in ENPI projects for Armenia. For example, a set of 5 thematic programs will be available under the new set of instruments. These will include Food Security, Migration and Asylum, Investing in People, Local Actors in Development, Environment and Sustainable Management of resources including Energy. There will also be a Stability Instrument for providing flexible integrated responses to crisis. The Stability Instrument will be particularly relevant to Armenia in the case of Nagorno Karabakh and to peacefully settling the political conflict there. The situation in Karabakh has been locked in stale-mate with a cease fire but no real lasting peace - thus the Stability Instrument may augment the negotiations currently underway through the OSCE's Minsk Group. The Stability Instrument will also compliment the civil society and "person to person" initiatives that are going on Nagarno Karabakh today including the joint works of the Yerevan and Baku National Press Clubs.

In the "EU - Armenia Action Plan", European Community assistance priorities become even more specific and drill down deeper on the topics of reforming democratic structures and good governance, support for regulatory reform and capacity building, and support for poverty reduction efforts. These specific assistance priorities now include: strengthening of democratic structures of the rule of law, strengthening respect for human rights and fundamental freedoms, encouraging further economic development/enhancing poverty reduction efforts and social cohesion, further improvement of the investment climate, strengthening of private sector led growth, further convergence of economic legislation and administrative practices, development of an energy strategy including early decommissioning of the Medzamor Nuclear Power Plant, contributing to a peaceful solution of the Nagorno Karabakh conflict, and enhanced efforts in the field of regional cooperation. These assistance priorities apply to all assistance instruments and programs which will or might be available for Armenia[].

While many ENPI initiatives are in the works for Armenia between 2007 - 2013, there has already been progress in certain areas. With respect to the ENP Action Plan, good progress has been achieved in the areas of judiciary reform, the administration of elections, and the Ombudsperson Institution. Besides the above mentioned areas, there has been some significant progress on conflict prevention and crisis management. The government has decided to re-launch the ratification process of the Rome Statute of the International Criminal Court. Armenia also continues to cooperate with the UN and NATO in exchanging information on terrorism issues through the assessment mission by the UN Counter Terrorism Committee Executive Directorate in Yerevan.

For education reform, Armenia continues along the line of the Bologna Process to modernize its curricula and make improvements to the administration and organizational structures of universities. Armenia has also drafted an updated action plan for the modernization of vocational training for 2008 - 2010 to improve governance and financing and introduce merit-based standards and quality monitoring examples.

There clearly have been many reforms that have been adopted and implemented in Armenia according to the above information and the April 2008 EU Commission Progress Report for the ENP Action Plan first year implementation. However, there are a growing number of independent Armenian civil society experts who believe the EU Commission's report on these reforms overlook the true situation on the ground and exaggerate the progress that has actually been made in the first year. These civil society experts have written their own report on these disparities. The main areas of disagreement or "points of divergence" are focused on: Democracy and the rule of law, human rights and fundamental freedoms, economic and social reform, market and regulatory reform, and finally, transport, energy, and environmental reform.

In terms of democracy and the rule of law, the EU Commission report stated that both the parliamentary elections of May 2007 and the presidential elections of February 2008 were in line with OSCE norms. The civil society experts however, claim that "vote bribing and use of administrative, media and human and other resources were not given due attention and proper assessment by international observation missions." Also, civil society experts say that the OSCE assessment was an effort to "legitimize an illegitimate election and was much criticized." []

On the topic of Economic and Social Reform, the EU Commission stated that Armenia had improved its business climate, yet the civil society experts argue that in 2007, tax authorities and other state agencies exercised pressure against businesses/media such as Royal Armenia and Radio Hay because of their disobedience towards imposed control from state officials. Also, civil society experts criticize the practice of collecting tax credits, and the strict tax rules levied against small and medium sized businesses - while large businesses with strong government ties are not held to the same tax standards.

For the area of Transport, Energy and the Environment, the EU Commission says that a "national action plan to implement the Aarhus Convention is under preparation and nine Aarhus Centers are in operation."4 But Civil Society experts argue nearly the opposite, that the government of Armenia does not comply with the commitments under the Aarhus Convention or the implementations of the Aarhus Convention's Compliance Committee adopted in March of 2006. All in all, a growing number of civil society experts from organizations as diverse as the Yerevan Press Club to Transparency International, agree that there is room for improvement in a lot of Armenia's ENPI reforms.

For the EIDHR (European Initiative for Democracy and Human Rights), the program was launched in 2003 with the aim of supporting NGOs in Armenia. The initiative has completed 11 projects successfully. These 11 projects received grants of 498,033 Euros in total, and were selected from a total of 48 projects that were up for consideration. The 11 selected projects chosen were:

1. "Campaign Against Corruption/Friendly Legal and Social Settings in Armenia" (Centre for Counterterrorism assistance)
2. "From Equal Rights to Equal Opportunities" (Havat)
3. "Introduction of European Charter on Local Self Government in the Legislation of Armenia as the Basis of Democratization and Development of Local Government" (Communities Finance Officers Association)
4. "Armenia and Azerbaijan on the Crossroads of neither War nor Peace: How to Overcome the Stereotypes" (Association of Investigative Journalists of Armenia)
5. "Interactive Human Rights" (Youth for Achievements Association)
6. "Strengthening the Role of Media in Promoting the Rule of Law in Armenia" (Femida)
7. "Towards New Leadership: Measures Facilitating the Peaceful Conciliation of Group Interests" (International Centre for Human Development)
8. "Human Rights Radio Series" (Antenna-Assistance to Electronic Mass Media)
9. "Accountability to Community" (Information Educational Centre for Supporting the Development of Local Government)
10. "Creation of Armenian Economic Court Web Information Centre" (Armenian Public Relations Association)
11. "Human Rights and Knowledge to Action" (Helsinki Committee of Armenia)

The programs that make up the EIDHR have been successful enough since their 2003 launch, that they will continue at least into the 2007 - 2010 time frame with a new and improved response strategy. This strategy will continue to enhance respect for human rights for countries where those rights are most at risk. Civil society will continue to be strengthened, as will supporting actions on banning torture and the death penalty. Also, the new 2007 - 2010 response strategy will enhance the transparency of democratic electoral processes through electoral observation.

With respect to NGOs, the EIDHR has one distinct advantage in that it can offer assistance to NGOs WITHOUT the need for government consent. This is a critical feature of cooperation with civil society organizations at a national level especially in the sensitive areas of democracy and human rights.[] Also, the new EIDHR strategy provides more flexibility to respond to changing circumstances, and to support innovation. This is in contrast to the long-term programming approach of the EIDHR's geographical programs.

But one of the drawbacks of EIDHR with respect to NGOs is that it remains one of the only tools for NGOs to participate in EU funded projects. It is the hope of many there will be other political instruments in the future that will allow NGOs to participate more fully in EU funded projects.

In conclusion, much of the European Union's initiatives being undertaken in Armenia currently and in the near future are based on the success of previous initiatives. Whether in the areas of economic development, rule of democracy or the preservation of human rights, these EU initiatives under the ENPI umbrella will only be effective if the people and the government of Armenia effectively use the money and resources given to them to make positive changes for the future. Just as important as how these initiatives are implemented, is a very candid analysis of whether these initiatives are actually successful, or if further reform is needed. The Republic of Armenia has demonstrated that they have successfully implemented some ENPI initiatives and further investigation of ENPI successes is certainly warranted to see how future EU cooperation can help unlock the rest of Armenia's socio-economic potential.

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