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View across the Border

Policy and Society in Georgia and Armenia

View across the Border


Policy and Society in Georgia and Armenia

Tbilisi
2014

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Project Director: Tornike Turmanidze


Project Coordinator (Georgia): David Aprasidze
Project Coordinator (Armenia): Ara Tadevosyan
This collection of papers by independent authors is published as part the project Crossing the Border: Networking Armenian and Georgian Experts, funded by The Black Sea Trust for Regional Cooperation, A Project of the German Marshall Fund of the United States (grant no. 3936). Opinions
expressed in the written or electronic publications of this project do not necessarily represent those
of the Black Sea Trust, the German Marshall Fund, or its partners.

The Black Sea Trust


for Regional Cooperation

2014
-
BTKK Policy Research Group
www.btkk.ge

Armenian Center for Transatlantic Initiatives
www.natoinfo.am
ISBN 978-9941-0-6980-2


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Foreword
Although Georgia and Armenia are neighboring countries, the two societies tend to know little
about each others domestic political life, economic development, social issues, civil society, media
environment, public policy priorities and, sometimes, even foreign policy agenda. Media in both Armenia and Georgia rarely pay attention to the events taking place just across the border except for
major political events such as elections or visits by high-level government officials. Hence, neither
Georgian nor Armenian experts/commentators have a profound understanding of the developments
in, respectively, Armenia and Georgia.
BTKK Policy Research Group (Tbilisi) and Armenian Center for Transatlantic Initiatives (Yerevan)
- Georgian and Armenian NGOs - decided to address this issue of the lack of knowledge between the
two societies by implementing a project titled Crossing the Border: Networking Armenian and Georgian Experts. The goals of the project were: to establish a new network of Georgian and Armenian
experts and NGOs working or conducting research in such fields as foreign policy, media, public policy, civil society and economy; to increase awareness and quality of knowledge of Georgian and Armenian experts about major political, economic and other developments in these countries; and to
encourage future cooperation between Georgian and Armenian civil societies in general.
In the course of the project, BTKK Policy Research Group and Armenian Center for Transatlantic
Initiatives each selected four experts to write research papers on issues related to the neighboring
countrys foreign policy, media, economy, public policy and civil society. The four Georgian experts
traveled to Armenia and, similarly, the four Armenian experts visited Georgia for a two-week research/study tour, during which they gathered data and conducted face-to-face interviews with representatives of government, opposition, business, NGOs, think tanks and academia for their research.
The result of their work is this collection of papers, translated respectively from Georgian and Armenian into Russian, with their executive summaries also translated into English.
BTKK - Policy Research Group and Armenian Center for Transatlantic Initiatives would like to thank
The Black Sea Trust for Regional Cooperation, a Project of the German Marshall Fund of the United States for financing this project, as well as the following organizations in Georgia and Armenia for
their generous help in hosting the experts: Georgian Institute for Strategic Studies (GISS), Media Development Foundation (MDF), Caucasus Institute for Peace, Democracy and Development (CIPDD)
and Economic Policy Research Center (EPRC) in Georgia, Mediamax News Agency and Paradigma
Armenia Company in Armenia.
BTKK Policy Research Group
Armenian Center for Transatlantic Initiatives
Tbilisi-Yerevan, September 2014


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Authors
David Batashvili, Political Analyst (Tbilisi)
Vahram Ter-Matevosyan, Visiting Professor at the American University of Armenia,Senior Researcher at the Institute of Oriental Studies,Armenian National Academy of Sciences (Yerevan)
Tamar Khorbaladze, Executive Director, Media Development Foundation (MDF) (Tbilisi)
Anna Barseghyan, Editor of Media.am, Media Initiatives Center (Yerevan)
Tamaz Akhobadze, Director, Institute for Nonviolent Communications (Tbilisi)
Narine Daneghyan, Reporter, Mediamax News Agency (Yerevan)
Irina Guruli, Program Manager, Economic Policy Research Center (EPRC) (Tbilisi)
Susanna Karapetyan, Labor Market and Pension Advisor at USAID PALM Project (Yerevan)


Table of Contents

:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

David Batashvili

Armenias Path towards Eurasian Union: Causes


and Prospects. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . 21

- : . . . . . . . . . . . 23
Vahram Ter-Matevosyan Turkish Policy in Georgia: Social and Economic
Implications of Integration Projects. Executive Summary . . . . . . . . . 40

: . . . . . . . . . . 42

Tamar Khorbaladze

Media Ethics in Armenia: Practice and Challenges.


Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

: . . . . . . . 60

Anna Barseghyan

Online Media in Georgia: Challenges and Development


Perspectives. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Tamaz Akhobadze

E-governance in Armenia: Achievements and Challenges.


Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

: . . . . . . . 91

Narine Daneghyan

Civic Activism in Georgia: Achievements and Challenges.


Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

: . . . . 105

Irina Guruli

Pension Reform in Armenia: Opportunities and


Challenges. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

: ? . . . . 124

Susanna Karapetyan

Georgia: Why And How To Reform The Pension


System? Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

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1. Agence France-Presse, Putin slashes gas price to Armenia amid anti-Russian protests, 3
December 2013, http://www.globalpost.com/dispatch/news/afp/131202/putin-slashesgas-price-armenia-amid-anti-russian-protests
2. Analytical Centre on Globalization and Regional Cooperation (ACGRC). Armenian Foreign
Policy Agenda. Yerevan 2014
3. Danielyan, Emil. PM Cites Another Hurdle To Armenian Entry Into Russian Bloc. Radio Free
Europe Radio Liberty (Armenian edition), 4 February 2014, http://www.azatutyun.am/content/article/24892837.html
4. Danielyan, Emil, and Sargis Harutyunyan. Russian Arms Sails to Azerbaijan Painful for
Sarkisian. Radio Free Europe Radio Liberty (Armenian edition), 10 July 2014
5. Fox News, NATO Official Says Russia Now and Adversary, 1 May 2014, http://www.foxnews.com/world/2014/05/01/nato-official-says-russia-now-adversary/
6. Giragosian, Richard. Armenias Strategic U-turn. European Council on Foreign Relations,
April 2014
7. Rucinski, Tracy. NATO Says Russia Considers It an Opponent, Prepares Ukraine Aid. Reuters, 15 June 2014, http://www.reuters.com/article/2014/06/15/us-nato-ukraine-russia-idUSKBN0EQ0G020140615
8. STRATFOR, The Next Stage of Russias Resurgence: The Caucasus States, 10 February 2012,
http://www.eurasianet.org/node/65000
9. STRATFOR, Turkish Relations with Russia Hinge on Iran, 13 December 2013, http://www.
naturalgaseurope.com/turkey-russia-relations-iran-resurgence
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20

David Batashvili
Armenias Path towards Eurasian Union: Causes and Prospects

Executive Summary
Armenian President Serzh Sargsyans statement on 3 September 2013 about Armenia joining the
Customs Union was unexpected for many people both in Armenia and in the West. This decision is
going to have serious implications for the geopolitical environment in the Caucasus, as well as for the
national interests of Armenia. The Customs Union which, according to its creators plans, is going to
become the Eurasian Union on 1 January 2015, is an attempt to institutionalize the Russian sphere of
influence. It is, therefore, clear why the Kremlin wants to enlarge the Customs/Eurasian Union, but
the present work aims to review this process from the point of view of Armenian interests.
The obvious goal of the Russian government is to re-establish some form of control over the
post-Soviet states, which concerns the nations of the South Caucasus, among others. The reason
for this is the Kremlins will to control the transit corridor running through this region, to isolate the
North Caucasus from the rest of the world, and to gain a geopolitical buffer with the West and the
Middle East.
The Russian interest towards Armenia in particular is explained by its interest towards the South
Caucasus as a whole. Armenia is of no great economic interest to Moscow, but it is important from
the geostrategic point of view. More specifically, Russia needs Armenia as its military-political outpost
in the South Caucasus. Thus, it is clear why the Kremlin wishes to keep Armenia in its own sphere of
influence. The Russian interests, however, may, in some cases, not coincide or even directly contradict the national interests of Armenia.
Russia has numerous levers in Armenia. Among them are Russias total domination in Armenian
economy and important ties with the Armenian political elite. Besides, Armenia depends on Russia
for its security. It buys Russian weapons and is a member of the same military alliance the Collective
Security Treaty Organization (CSTO). There are also Russian military bases in Armenia, as well as Russian border guards controlling Armenian-Turkish and Armenian-Iranian borders. In addition, Russia
is using soft power in Armenia - through influence over Armenian media and cultural cooperation.
All these levers were aggressively used by Russia in order to prevent Armenia from signing the Association Agreement with the EU and make it declare its intention to join the Customs Union. Armenia started the process of negotiations on the Association Agreement with the EU in 2010. Since then,
Armenian officials made numerous statements to the effect that Armenia was really going to sign the
Association Agreement and was not going to join the Customs Union. The series of such statements
continued through August 2013. Considering this, it is quite obvious that President Sargsyans statement of 3 September 2013 about joining the Customs Union constituted a radical change in the foreign policy of Armenia.
Russia achieved this change by simultaneous employment of various levers. One of them was intentional worsening of Armenias security problems by selling a large amount of Russian weapons to
Azerbaijan. The latter, due to its greater financial resources, has been constantly changing the military balance in its favor even without that. Considering this as well as regular fighting in Karabakh, it
is clear why the sales of additional Russian arms to Azerbaijan became a cause of concern for the Armenians. By this move, has Russia increased Armenias dependence on it in security issues.
Russia also actively used the levers it has thanks to its close ties to the Armenian political and oligarchic elite. In 2013, various forces in Armenia became more active in opposing the signing of the

21

Association Agreement with the EU and supporting pro-Russian policies.


Russian economic pressure was also important. Its obvious example was blackmailing Armenia
with the natural gas prices. In May 2013, the price for 1000 cubic meters went from $189 to $270. After Armenia agreed to join the Customs Union, the price went back to $189. This was combined with
the threats to ban Armenian products in Russia, stop private transfers to Armenia through the Russian banking system, and deport Armenian expatriates from Russia.
After Armenias entrance into the Customs Union, and, therefore, the Eurasian Union, Russian
control over Armenian foreign policy will grow. Armenias ties with other international players will
weaken as a result. At the same time, the chances of solving the Karabakh conflict and the problems
in the Armenian-Turkish relationships will decrease significantly.
Internally, the membership in the Eurasian Union will hinder the processes of reforms and democratization in Armenia. At the same time, the trade policy of the Customs/Eurasian Union will harm
Armenian economy. All of this will complicate rapid and successful development of Armenia, which
could make the existing negative demographic tendencies there even worse.
It must be considered that Russia is in a deep internal systemic crisis. It has also engaged in a conflict with the West during the last several months. The sum of these factors makes future prospects
of Russia questionable. And this makes being strategically tied to Russia without any alternative particularly dangerous for Armenia.
As a result of membership in the Eurasian Union, Armenia will have to face three negative factors
simultaneously, once Russia is no longer able to continue its current geostrategic activities in South
Caucasus. These factors are: 1) serious foreign challenges in the form of the conflict with Azerbaijan
and bad relations with Turkey; 2) the lack of strong ties with states other than Russia that would help
Armenia neutralize these foreign challenges; 3) the lack of internal resources to withstand these challenges as a result of internal problems and weaknesses.
In such a case, Armenia may have to face the problems with Azerbaijan and Turkey without sufficient foreign support and in the situation when Armenia itself is weak internally. Taking into consideration that Armenias entrance into the Eurasian Union is obviously a Russian initiative rather than
an Armenian one, it can be said that today Russia parasitizes on the national interests of Armenia in
order to achieve its own geostrategic objectives. By doing so, it puts long-term security of Armenia
under risk.

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Ahmet Davutolu, Stratejik Derinlik: Turkiyenin uluslarasi konumu, Kre Yayinlari, Istanbul, 2001; Blent Aras
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in the SouthCaucasus, Insight Turkey, v. 16, n. 2, 2014, pp. 43-52.
2
Mickael Hikari Cecire, The Merchant Hegemon: Georgias Role in Turkeys Caucasus System in Georgian Foreign
Policy: The quest for Sustainable Security, eds. K. Kakachia and M. Cecire, Tbilisi, Konrad Adenauer Stiftung e.V,
2013, p. 111
3
Mitat elikpala, Turkey as a Regional Power and the Caucasus, Insight Turkey, 2007, vol. 9, no. 2, p. 27-28 Bayrarm
Balc, Strengths and Constraints of Turkish Policy in the SouthCaucasus, Insight Turkey, v. 16, n. 2, 2014, p. 49
4
Blent Aras and Pnar Akpnar, The Relations between Turkey and the Caucasus, Perceptions, 2011, v. 16, n. 3, p. 63
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Saakavili Grcistann Yeni Elilik Binasn At, Chveneburi, at http://www.chveneburi.net/tr/default.
asp?bpgpid=1370&pg=1
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Bayrarm Balc, Strengths and Constraints, p. 50
7
Cecire, The Merchant Hegemon, pp. 115-116
8
Ibid, pp. 119, 123
9
Interview with Mikheil Saakashvili: Georgias Westward March, Turkish Policy Quarterly, 2013, v. 12. no. 1. , p. 21
10
Saakashvili Speaks of Importance of Close Ties with Turkey, Civil Georgia, 14 March 2006, http://www.civil.ge/
eng/article.php?id=12061
11
Interview with Saakashvili, Turkish Policy Quarterly, p. 19
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Turkey, 2008, v. 10, n. 1, p. 80

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Cooperation, GMF, June 2013, p. 2
14
, 7 2014 .,
15
National Security Concept of Georgia, 2005, http://www.parliament.ge/files/292_880_927746_concept_en.pdf
16
National Security Concept of Georgia, 2011, http://www.mfa.gov.ge/index.php?lang_id=ENG&sec_id=12
17
Irakli Alasania, Forward in Georgian Foreign Policy: The quest for Sustainable Security, eds. K. Kakachia and M.
Cecire, Tbilisi, Konrad Adenauer Stiftung e.V, 2013, p. 7
18
Ibid

27

2012 -
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, http://www.geostat.ge/
index.php?action=page&p_id=140&lang=eng
23
- Ivane Chkhikvadze, Zero Problems With Neighbors: The Case Of Georgia, Turkish Policy Quarterly,
2011 Summer, p. 6
24
20 , .
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Financial Indices of Commercial Banks, https://www.nbg.gov.ge/index.php?m=404
Case Studies: Germany, Greece and Turkey: Country background and research hypotheses, A report prepared
by the Enhancing the Role of Georgian Migrants At Home project (ERGEM project), Danish Refugee Council and
International Centre of Migration Policy Development, 20/9/2013
30
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31
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28
29

30

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39.
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- Kerem ktem: Projecting Power: Non-conventional Policy Actors in Turkeys International
Relations in Another Empire? A Decade of Turkeys Foreign Policy under the Justice and Development Party, eds.
Kerem ktem, Ayse Kadioglu and Mehmet Karsli, Istanbul, Bilgi University Press, 2012, pp. 77-108
35
TIKA 2012 Annual Report, Turkish Cooperation and Coordination Agency, ed. N. Yildiz, http://store.tika.gov.tr/
yayinlar/faaliyet-raporlari/tika2012AnnRep.pdf, pp. 158-165
36
Ayhan Kaya, Yunus Emre Cultural Centers: The AKPs Neo-Ottomanism and Islamism, http://www.tr.boell.org/
web/51-1725.html
37
The Tbilisi Yunus Emre Turkish Cultural Centre Opened, http://www.yev.org.tr/turkiye/index.php?lang=en&pag
e=7&newsCat=1&newsID=297
38
The Tbilisi Yunus Emre Turkish Cultural Centre Opened, http://www.yev.org.tr/turkiye/index.php?lang=en&pag
e=7&newsCat=1&newsID=297
39
Trkiye-Grcistan Kltrel likileri, 24.10.2012, http://tbilisi.emb.mfa.gov.tr/ShowInfoNotes.aspx?ID=164753
33
34

31

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40
enol Korkut, The Diyanet of Turkey and Its Activities in Eurasia after the Cold War, Acta Slavica Iaponica, 2010,
Tomus 28, pp. 117-139
41
ktem, Projecting Power, p. 89
42
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43
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32

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,
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,
, 06 2014,
Interview with Saakashvili, Turkish Policy Quarterly, pp. 20-21
46
Goksel, p. 5
47
Cross-country datasets, http://caucasusbarometer.org/en/cross-country/
44
45

33

48.
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50
elikpala, p. 28
51

52

53
Ibid
54
Political Aspects of Islam in Georgia, Irakli Menagarishvili et al., Strategic Research Institute, 2013, p. 107
55
Islam in Georgia, pp. 107-108
56
, : , http://www.kp.ru/daily/adjara
48
49

34

. 2014 311 57,


, . 2009 , 184 , 140 58.

, .

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.
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-
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40,
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, , ,
Diyanet leri Bakan Grmez, Grcistan Ortodoks Kilisesi Patrii ll. liay kabul etti, 02.05.2014 http://www.
diyanet.gov.tr/tr/icerik/diyanet-isleri-baskani-gormez-gurcistan-ortodoks-kilisesi-patrigi-ll-ilia
58
Islam in Georgia, pp. 119
59
Ibid, pp. 122-123
60
Ibid, pp. 128
61
Beka Mindiashvili, Decisive battle for Oshki, Tabula, 2012, no. 16
57

35

, , ,
,
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,
1936 .
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.

62
Georgian Patriarchate Suggests Turkey Allow Services In Christian Churches In Return For Allowing A Mosque
To Be Built In Georgia, http://www.pravoslavie.ru/english/60586.htm
63

64
Ibid

36

,
,

,
,
(GRASS)

, ,

, , ,
,

,
(GISS)

,
(GFSIS)

,
(GISS)

, (CRRC)

, ,
.


1. Aras Blent and Akpnar Pnar, The Relations between Turkey and the Caucasus, Perceptions, 2011, v. 16, n. 3, pp. 53-68; Bayram Balc Strengths and Constraints of Turkish Policy in
the SouthCaucasus, Insight Turkey, v. 16, n. 2, 2014, pp. 43-52.
2. Aras Blent, Turkeys Policy in the Former Soviet South: Assets and Options, Turkish Studies,
2000, v. 1, n. 1, pp. 36-58;

37

3. Ayhan Kaya, Yunus Emre Cultural Centers: The AKPs Neo-Ottomanism and Islamism, http://
www.tr.boell.org/web/51-1725.html
4. , : , http://www.kp.ru/daily/
adjara
5. Case Studies: Germany, Greece and Turkey: Country background and research hypotheses,
A report prepared by the Enhancing the Role of Georgian Migrants At Home project (ERGEM project), Danish Refugee Council and International Centre of Migration Policy Development, 20/9/2013
6. Cecire Mickael Hikari, The Merchant Hegemon: Georgias Role in Turkeys Caucasus System
in Georgian Foreign Policy: The quest for Sustainable Security, eds. K. Kakachia and M. Cecire, Tbilisi, Konrad Adenauer Stiftung e.V, 2013, pp. 65-78
7. Chkhikvadze Ivane, Zero Problems With Neighbors: The Case Of Georgia, Turkish Policy
Quarterly, 2011, v. 10, n. 2
8. elikpala Mitat, Turkey as a Regional Power and the Caucasus, Insight Turkey, 2007, vol. 9,
no. 2, pp. 25-30;
9. Cross-country datasets, http://caucasusbarometer.org/en/cross-country/
10. Davutolu Ahmet, Stratejik Derinlik: Turkiyenin uluslarasi konumu, Kre Yayinlari, Istanbul,
2001;
11. Davutolu Ahmet, Turkeys New Foreign Policy Vision, Insight Turkey, 2008, v. 10, n. 1, pp.
77-96;
12. Diyanet leri Bakan Grmez, Grcistan Ortodoks Kilisesi Patrii ll. liay kabul etti,
02.05.2014,
http://www.diyanet.gov.tr/tr/icerik/diyanet-isleri-baskani-gormez-gurcistan-ortodoks-kilisesi-patrigi-ll-ilia
13. Financial Indices of Commercial Banks, https://www.nbg.gov.ge/index.php?m=404
14. Interview with Mikheil Saakashvili: Georgias Westward March, Turkish Policy Quarterly,
2013, v. 12. no. 1. , pp. 17-25
15. Irakli Alasania, Forword in Georgian Foreign Policy: The quest for Sustainable Security, eds.
K. Kakachia and M. Cecire, Tbilisi, Konrad Adenauer Stiftung e.V, 2013, pp. 7-8
16. Georgian Patriarchate Suggests Turkey Allow Services In Christian Churches In Return For
Allowing A Mosque To Be Built In Georgia, http://www.pravoslavie.ru/english/60586.htm
17. Gksel Diba Nigar, Turkey and Georgia: Zero-Problems?, On Wider Europe, Black Sea Trust
for Regional Cooperation, GMF, June 2013
18. Kirii Kemal, The Transformations of Turkish Foreign Policy: The rise of the trading state,
New Perspectives on Turkey, 2009, vol. 40, no. 36, pp. 29-57;

38

19. Kerem ktem, Projecting Power: Non-conventional Policy Actors in Turkeys International
Relations in Another Empire? A Decade of Turkeys Foreign Policy under the Justice and Development Party, eds. Kerem ktem, Ayse Kadioglu and Mehmet Karsli, Istanbul, Bilgi University Press, 2012, pp. 77-108
20. Mindiashvili Beka, Decisive battle for Oshki, Tabula, 2012, no. 16
21. National Statistics office of Georgia, Economy, http://www.geostat.ge/index.php?action=page&p_id=137&lang=eng
22. National Statistics office of Georgia, Foreign Direct Investments, http://www.geostat.ge/index.php?action=page&p_id=140&lang=eng
23. National Bank of Georgia, Statistics, https://www.nbg.gov.ge/index.php?m=306#monetarystatistics
24. National
Security
Concept
of
Georgia,
files/292_880_927746_concept_en.pdf

2005,

http://www.parliament.ge/

25. National Security Concept of Georgia, 2011, http://www.mfa.gov.ge/index.php?lang_


id=ENG&sec_id=12
26. Saakavili Grcistann Yeni Elilik Binasn At, Chveneburi, at http://www.chveneburi.
net/tr/default.asp?bpgpid=1370&pg=1
27. Saakashvili Speaks of Importance of Close Ties with Turkey, Civil Georgia, 14 March 2006,
http://www.civil.ge/eng/article.php?id=12061
28. enol Korkut, The Diyanet of Turkey and Its Activities in Eurasia after the Cold War, Acta
Slavica Iaponica, 2010, Tomus 28, pp. 117139
29. Political Aspects of Islam in Georgia, Irakli Menagarishvili et al., Strategic Research Institute,
2013, p. 107
30. The Tbilisi Yunus Emre Turkish Cultural Centre Opened, http://www.yev.org.tr/turkiye/index.php?lang=en&page=7&newsCat=1&newsID=297
31. TIKA 2012 Annual Report, Turkish Cooperation and Coordination Agency, ed. N. Yildiz,
http://store.tika.gov.tr/yayinlar/faaliyet-raporlari/tika2012AnnRep.pdf, pp. 158-165
32. Trkiye-Grcistan
Kltrel
likileri,
ShowInfoNotes.aspx?ID=164753

24.10.2012,

http://tbilisi.emb.mfa.gov.tr/

33. Yavuz Hakan, The Turkish Identity and foreign policy in flux: The rise of Neo-Ottomanism,
Critique: Critical Middle Eastern Studies, 1998, v. 7. n. 12;

39

Vahram Ter-Matevosyan
Turkish Policy in Georgia: Social and Economic Implications of Integration
Projects

Executive summary
On 6 May 2014, Tbilisi hosted a trilateral summit of the Georgian, Azerbaijani and Turkish presidents. During that meeting, a set of questions of trilateral dimensions was discussed pertaining to
the issues of strategic cooperation. That event also served as an opportunity for the political and social circles in Georgia to revitalize discussions about the peculiarities of the Turkish-Georgian relations
and about their future prospects. Those discussions indicated that, along with obvious achievements
in bilateral relations, there are also some problematic aspects which need to be addressed.
The aim of this paper is to explore the dynamics of Turkish-Georgian relations with a particular
emphasis on the period that followed the most recent change in power when the United National
Movement (UNM) was voted out by the Georgian Dream coalition (GD). The paper discusses a number of questions, including: which factors are responsible for deepening relations between Turkey
and Georgia, are they related only to observable (geo)political factors or are there more unexplored
factors which define the intensity and complexity of those relations? The paper also looks at the manifestations of the Turkish soft power politics in Georgia, discusses various projects that have been
carried out in the cultural and educational spheres and touches upon political and social perceptions
of those projects in Georgia. The paper also addresses the question of Adjara which emerges from
time to time in Turkish-Georgian bilateral relations. The paper discusses the disputed issues which
make Turkish-Georgian relations problematic, and shows how central and local governments as well
as the Georgian Orthodox Church deal with emerging challenges.
The first part of the paper explores Turkish political priorities in Georgia and views the expectations Georgia has with regard to Turkey. It argues that, despite some election and post-election
statements of anti-Turkish nature and those directed against regional projects, the new government
formed by the Georgian Dream coalition largely continues the policy of the UNM in relation to Turkey.
Of course, in some instances of bilateral relations, the previous administration of Mikheil Saakashvili was an outspoken supporter and a protagonist of even greater Turkish presence in the Georgian
economy and in the whole region. During his presidency, Saakashvili authored a few statements expressing great admiration for Turkey and Turkish political and historical figures and, so far, these
statements remain unmatched. He is also known for opening the doors of the Georgian economy to
the Turkish investors who brought capital and opportunities for Georgia. However, the government of
the Georgian Dream coalition, albeit trying to display more cautious attitude towards Turkey, accepts
that, at least in the foreseeable future, Turkey will continue playing an undeniably significant role in
the Georgian economy and the Georgian Dream cannot afford alienating Turkish capital.
The second part of the paper deals with the Turkish soft power politics in Georgia and argues
that since 2003, i.e. after the Rose Revolution, Turkey has steadily increased its presence not only in
the Georgian economy but also in the cultural and educational spheres. In terms of trade turnover
and FDI, Turkey has been one of the top partners of the Georgian government for more than a decade. The paper exemplifies this claim by indicating those spheres of the Georgian economy where
Turkish businesses dominate. In light of these relations, Turkey has become an important destination
for Georgian seasonal migrants who are employed in Turkey and send regular remittances to their
families in Georgia.
This part also discusses the steps that the institutions affiliated with the Turkish government un-

40

dertook in religious, educational and cultural spheres in Georgia. It cites examples of the projects
which have been designed, financed and implemented by the Turkish government. It also touches upon the instances when non-governmental institutions are engaged in educational programs in
Georgia.
The paper also brings views and insights from different politicians and expert groups in Georgia
concerning Turkish political, economic and cultural projects. These perspectives are important as
they shed light on the dominant political and social discourse in Georgia concerning the aforementioned problems.
The paper concludes that, by building closer bilateral relations, Turkey and Georgia pursue different objectives deriving from different (geo)political realities and ambitions. The paper also argues
that, generally speaking, the Georgian political and social elite have a positive view of Turkish policy in
Georgia, however, there is a visible and increasing opposition on the part of some political forces and
circles affiliated with the Georgian Orthodox Church with regard to inherent problems that Georgia
faces by allowing greater Turkish presence in strategically important domains of Georgia.

41

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49

Aravot.am, Armlur.am, Armversion.am, Asekose.am Galatv.am Haynews.am, Irates.am, Panorama.


am, Report.am, Shamshyan.com, Tert.am, Times.am, Yerkir.am, 168.am 1lur.am.
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1. Freedom House, Map of Freedom 2014, : http://
www.freedomhouse.org/sites/default/files/MapofFreedom2014.pdf
2. : http://handbook.reuters.com/index.
php?title=Main_Page
3.

--: http://www.bbc.co.uk/editorialguidelines/

4. : http://www.rjionline.org/MAS-Press-Councils-Sweden
5. :
http://stakeholders.ofcom.org.uk/broadcasting/broadcast-codes/broadcast-code/

56

6.
Journalists (SPJ)) http://www.spj.org/ethicscode.asp

(Society of Professional

7. : : http://www.osf.am/wp-content/uploads/2013/11/
OSF-Media-Report-Armenia-04-17-2014-RU-final-WEB.pdf , . 18
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http://www.ypc.am/upload/GLOSSARY_eng.pdf
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http://www.pinkarmenia.org/en/publications / . 36-38
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Preferences_eng.pdf
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18. : http://www.foi.am/
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codices/997.htm
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: http://www.spj.org/ethics-papers-plagiarism.asp
21. - : media.am http://media.am/en/armenian-onlinemedia-statement
22. :
http://khosq.am/en/2014/03/14/statement-of-journalistic-associations/

57

Tamar Khorbaladze
Media Ethics in Armenia: Practice and Challenges

Executive Summary
Over 350 codes of media ethics exist in the world today. Media outlets have in-house guidelines
for their journalists (for example, Reuters, BBC). There are media councils and institution of media
ombudsman operating in various countries, as well as the broadcasters codes of conduct and ethics which are binding self-regulatory documents, for example, in the United Kingdom. International
practice shows that the lower the degree of freedom in a country, the higher the risk of government
(not journalists) stepping in to ensure trustworthiness of media, to prevent media from abusing its
own power, to act as a watchdog of human rights violations by media. This may lead to press coming
under strict government control.
The goal of the research was to evaluate the situation in terms of media ethics in Armenia and
identify the challenges which media face in this respect; to find out whether Armenia uses - and how
successfully - internationally tested self-regulation models; how prepared the Armenian media-community is to take steps in this direction; whether there are any signs of enacting legislation and/or applying government control to regulate issues of media ethics in the country.
Primary and secondary research methodology was used to prepare the paper. The secondary
research involved the analysis of materials prepared on this topic by international and local organizations as well as available statistical information. Within the framework of the primary research,
self-regulation practice in Armenia was analyzed; structure and topics of cases, the practice of court
cases, details of existing legislation were studied; in-depth, semi-structured interviews were conducted with media representatives, experts and lawyers working on this topic, representatives of academic circles and non-governmental organizations in total, 13 respondents.
The research has showed that Armenia, much like the entire world, sees the start of print media
and partially broadcasting media ceding their position to online media. However, according to 2013
survey, television was a primary source of information for 79 percent of Armenias population. As of
2014, some 43.57 percent of the population uses the internet. This means that TV media, with 18 national broadcasters and nine regional broadcasters, still retains much influence in Armenia, though
only two of those channels are more or less critical of the government. Online media are free in terms
of both special regulations and content. This poses new challenges to media ethics as, according to
the research, internet-media account for most of the violations of ethics (the conclusion has been
drawn from complaints and respondents opinions; no accurate statistics exist).
Armenian media rarely report about ethnic and religious minorities, while hate speech makes up
only one percent of the entire media content. One of the reasons of rare coverage of monitories is
the ethnic and religious composition of the population (the majority comprises more than 90 percent
of the population). However, the use of incorrect terminology prevails in reporting on the relations
with Azerbaijan and Turkey. LGBT groups are also rarely covered whilst, when covered, around 80 percent of reporting is of discriminatory nature (misuse of terms, lack of balance and diverse opinions, et
cetera). Discriminatory language is also rare towards different religious and ethnic groups. The latter
topic is especially exploited in pre-election political context.
Among the main challenges to media-ethics in Armenia, media and media experts emphasize
the following: plagiarism, problems related to the topic of ethnic conflicts, dissemination of personal

58

data, issues concerning civil activity of journalists, etc.


The Armenian parliament decriminalized defamation in 2010. According to the monitoring conducted by the Committee for the Protection of Freedom of Speech, Armenias courts, over the period from 2010 to 2013, considered the total of 97 cases against media, mainly concerning defamation
(under Article 1087 of the Civil Code of Armenia). Over one fourth of complainants were politicians;
a substantial share of complaints was filed by businesses. The number of upheld complaints is significantly fewer than of those that were rejected. Nevertheless, each and every respondent in the
research which was conducted on the basis of fully or partially upheld complaints noted that court
rulings posed a significant threat to media freedom in Armenia as fines imposed by courts on media
outlets were as high as 10,000 15,000 and even 20,000 euros. Media representatives declared that
those amounts delivered hard economic blows on media. After the Constitutional Court of Armenia,
in November 2011, issued a decision and explanation on the complaint filed by the ombudsman, the
amount of fines was reduced significantly, now ranging within the limit of three-digit numbers. The
court practice proved that it can be used against the freedom of media.
In the past few years, two legislative initiatives were drafted concerning ethics or a neighboring
topic: one was drafted by a group of journalists, envisaging toughening of punishment for plagiarism.
The parliament adopted the amendment. Another initiative designed to expose so-called fakes was
drafted by legislators themselves, though the initiative was called off because of the position of the
media. The media communitys stance on the amendment regarding plagiarism is mixed.
The following self-regulation institutions operate in Armenia: the Code of Conduct of Media Representatives elaborated on the initiative of Yerevan Press Club and a segment of media in the spring
of 2007, and the Declaration on Election and Referendum Coverage Principles. As of now, these documents are signed by 45 entities representing 48 media outlets of Armenia, as well as nine media organizations. The signatories are mainly newspapers and opposition TV channel as well as all regional
media outlets. The Media Ethics Observatory (MEO), which was elected by the signatories, considered six complaints in 2007, five complaints in 2008-2009, eights complaints in 2010, three in 2011,
four in 2012 and only one in 2013. Given the declining number of complaints, an effort was made to
invigorate the MEO: four open discussions on ethical issues were held on the initiative of the Observatory, all four were streamed live. Media and participants in the process themselves admit that the
MEO actually fails to perform the function of self-regulation in reality.
Armenia tries to apply other means as media self-regulation tools as well, for example, roundtable discussions among professionals (jointly with Media Initiatives Center); closed Facebook groups
for professionals; expert conclusions on media ethics and court cases (Media Freedom Center).
The Public Broadcaster does not have its code of conduct. The executive director confirms the intention to adopt the code of conduct, but fails to specify the timeframe for the adoption.
The research showed that since 2007, Armenia has undertaken steps towards the implementation of media self-regulatory mechanisms, though so far the society tends to rely more on court practice than self-regulatory systems. Among the reasons for such tendency are: the passivity of society
and representatives of the media; a bulk of TV channels and online media not being among signatories; MEO decisions often failing to influence the media content of violators of ethical standards,
et cetera. The existing situation shows that regardless of ethical problems existing in the media, the
translation of self-regulation idea into practice will be difficult unless new concepts and ideas are created. In this regard, we consider the development of a code of conduct of the Public Broadcaster and
establishment of a self-regulatory body in it important. This may prove to be an interesting practice
for the media.
The research also revealed a higher degree of readiness of the Armenian media for drawing up
editorial codes of conduct than using a self-regulatory body. Supporting this readiness will also be
important.

59

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64

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1. http://www.worldbank.org/en/country/georgia
2. http://transparency.ge/en/node/3501
3. https://idfi.ge/en/internet-freedom-in-georgia-report-n2-54
4. http://caucasusbarometer.org/en/cb2013ge/FRQINTR/
5. http://www.epfound.ge/files/media_report_final_eng_print_1.pdf
6. http://transparency.ge/en/post/report/who-owns-georgian-media-power-networks-and-corporate-relationships
7. http://transparency.ge/en/advertising-market

68

Anna Barseghyan
Online Media in Georgia: Challenges and Development Perspectives

Executive Summary
Along with increased internet access, online media are steadily evolving in Georgia, though in
a country with a population of 4.477 million, television continues to remain the main and primary
source of news and information for the majority of the population (for 9 out of every 10 inhabitants).
Despite the growth trend, limited internet access remains one of the main challenges for the development and impact of online media.
According to the UNs International Telecommunication Union, based on the data from 2012, only
45% of Georgias population has internet access. While according to the Caucasus Barometer 2013
survey carried out by the Caucasus Research Resource Centers Georgia, 45% of the countrys population has never used the internet.
The internet today is the most free media space in Georgia in terms of both the absence of political interference and the existence of pluralism.
There have been no recorded cases of persecution, pressure or censorship on freely expressing an
opinion or publishing anything online by the ruling authorities.
The authorities not putting direct pressure on online media is due, to some extent, to the impact
of online media: unlike traditional media, the authorities are skeptical of the likelihood of online media having a great impact on public opinion given its small audience.
Though there is no censorship in the classic sense in online media, self-censorship is one of the
problems that prevail in the Georgian media.
The Georgian Orthodox Church and ethnic, sexual and religious minorities tend to become topics
where self-censorship is exercised. Many journalists avoid criticism of the Georgian Orthodox Church
and do not express in their articles any attitude other than critical towards ethnic, sexual and religious minorities.
Apart from publishing unverified facts, deliberately distorted information, defamation and Facebook status updates, the biggest ethical problem of Georgias online media is tied to plagiarism and
hate speech.
Unlike broadcast media, which is required by law to have a code of conduct and self-regulatory
mechanisms, online media has no such obligation.
Operating in the country is the Georgian Charter of Journalistic Ethics which tries to solve existing
problems through self-regulation of the media.
The 250 journalists who signed the Charters 11-point code of ethics are obliged to comply with
the decision of the self-regulatory body: to apologize and publish this apology in their news outlet
when violating ethics.
There is no need to obtain a license to establish an online media outlet, which means that anyone
can enter the market unimpeded and engage in journalistic activity. This becomes especially evident
during certain political events (for example, elections), when, suddenly, a large number of new websites of unknown origin appear, containing no information about themselves and shutting down once
the political event ends.

69

Online media also have no obligations under the law to publish information about its owners and
revenues in contrast to broadcast media, information about the owners and revenues of which is
transparent and known as prescribed by law.
The freedom of online media is sometimes used against media representatives. Different political
figures seek revenge on journalists and civil society activists through online media, viewing the internet as a resource favorable to publishing compromising materials. In response to negative publicity
about them, public officials use online media with the purpose of discrediting media representatives.
Social media are a source of information for online media as well as an effective platform to disseminate websites journalistic output and to attract new readers. A significant part of the traffic of
Georgias online media comes from Facebook, the most prevalent social network in the country.
However, along with having a positive effect on online media, social media also adversely affect
them: Facebook is online medias most serious competitor today and not only in terms of the
speed at which it shares news. A significant part of online advertising is directed to this social networking site. Facebooks accessibility, low advertising costs, and the possibility of a more targeted audience represent a more attractive offer for advertisers.
Online media in Georgia are entering a new development stage, but modest financial capabilities
slow down the steps online media have taken in this direction.
Though some sites are technically and technologically updated and create their own mobile applications, while multimedia materials, infographics, and data visualization are gradually coming to
replace text-based content accompanied by photographs, the majority of online news outlets do not
have the human and financial resources to keep up with global media trends.
Newsrooms do not have the financial means to cover the costs of journalists acquiring new media
tools and skills, and journalists, in turn, are not interested in self-improvement, since additional professional skills do not have an effect on the amount of their remuneration.
The financial problems of online media are due to not only the factor of a small market, but also
the gaps in news outlets marketing and sales departments: many news outlets do not have marketing and sales experts who would ensure the medias advancement, develop a marketing strategy and
attract new advertisers.
Given the social situation, the audience, in turn, is not yet prepared to pay for the journalistic
product it consumes.
One of the biggest concerns of online media representatives today is the Georgian Ministry of Internal Affairs unrestricted access to mobile and internet providers infrastructure, which allows the
ministry without a court ruling, in real-time to wiretap the phone calls and read personal letters and
messages of any citizen, thus creating a favorable environment for self-censorship in the media.
Another concern is tied to the technical opportunities by the state, regulatory body, or internet
providers to arbitrarily filter or restrict websites, which is not sufficiently regulated by law.

70


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74

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76

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78

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81

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82

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1. http://www.opengovpartnership.org/country/armenia
2. https://www.e-gov.am/en/
3. http://www.oecd.org/mena/governance/36853121.pdf
4. http://www.opengovpartnership.org/countries
5. http://www.ethics.am/hy/
6. http://www.armeps.am/epps/home.do
7. https://www.e-register.am/am/
8. http://www.opengovpartnership.org/sites/default/files/legacy_files/country_action_
plans/OGPAP_Armenia_English.pdf
9. http://www.azdarar.am/
10. http://www.datalex.am/
11. https://www.e-payments.am/hy/
12. http://www.gov.am/en/
13. http://www.dasaran.am/
14. http://www.foi.am/en/bulletin/

86

15. http://www.foi.am/en/years/
16. http://www.foi.am/en/about-award/
17. http://givemeinfo.am/en/
18. http://www.ogp.am/en/news/item/2014/04/15/workshop/
19. http://www.ogp.am/en/FOI/item/2012/10/17/minicipalities/
20. http://www.ogp.am/en/FOI/item/2013/03/12/EFOI/
21. http://esgitem.am/
22. http://www.internetworldstats.com/asia.htm#am
23. http://www.ega.ee/files/Raport16_dets2013_08012014.pdf
24. http://www.ega.ee/files/Raport16_dets2013_08012014.pdf
25. http://www.transparency.org/country#ARM
26. http://www.doingbusiness.org/rankings

87

Tamaz Akhobadze
E-governance in Armenia: Achievements and Challenges

Executive Summary
Research represents analysis and evaluation of the development of E-governance in Armenia. As
you know, since the mid-twentieth century, especially from late 90s, democratic countries, for the
simplification of access to public services, have started working on the development of electronic services. In addition to the simplicity, E-governance has many other advantages. Among them are: the
cost reduction, quality of services, shorter time needed for receiving services, community involvement in developing public programs and budgeting them. As a result, the government gets a society
that is actively involved in its activities, which reduces the risk of improperly conducting the public
policy and the risk of corruption in public institutions.
For the purpose of conducting this research, the author visited the Republic of Armenia. Interviews were held with individuals involved in the development of E-governance as well as with other
stakeholders of E-governance in Armenia. In addition to the interviews, resources available online,
previous studies and publications - courtesy of Armenian colleagues - were studied.
The development of E-governance in Armenia started in 2000s. The most important step forward
for Armenia was joining the Open Government Partnership (OGP) in 2012. As a result, the Armenian
government has made certain commitments to develop E-governance in the country. The Armenian
government established a working group which is composed of governmental agencies and representatives of the NGO sector. The Prime Ministers Office took the responsibility of coordinating the
working group. Immediately after joining the OGP, the working group has developed an action plan.
Armenias government moved quickly to meet its commitments. As a result, within two years Armenia has moved to a new level and developed a new action plan which included a commitment to finalize the old obligations and undertake some new ones.
Armenia, as any other country, has experienced difficulties in the process of development of
E-governance. The country had to improve its regulations, develop infrastructure and train human
resources. Like all innovations, the electronic government has been received with reluctance within
some segments of the society. The situation was especially difficult in rural areas.
In 2000s, mostly in the context of combating corruption, Armenia slowly began to develop e-services. The main task was to unify these services. For this reason, Armenia has launched government
websites and portals which include all electronic services for the citizens. Also, the ministries and local authorities have begun to create their own web pages, making them comply with common standards and, most importantly, using them in everyday working processes. Governmental web pages
publish all government decisions so that citizens and interested parties can have an opportunity to
learn about these decisions as soon as possible. If citizens have questions, they can write a letter to
government officials by using the portals.
For the purpose of effectively fighting against corruption, it was especially important to introduce
a completely transparent e-procurement web site. The Armenian government has made a commitment to announce a tender for the procurement of any product or service needed by the government
and to open such tenders to everyone. Electronic procurement not only reduced corruption but also
sharply decreased government spending. Another notable innovation in the fight against corruption
was the public disclosure of the property declarations submitted by public servants. In accordance
with the new Armenian government commitment, the number of public servants required to fill out
a financial declaration has been increased to 800. As a result of introducing the Freedom of Informa-

88

tion Law, the government structures have become more transparent. The government transparency improved due to the initiative to promote action plans and budgets of governmental agencies on
websites. Interactive budgets give citizens an opportunity to participate in their planning.
Armenia showed a very remarkable progress in terms of simplification of business licensing and
registration procedures. Reduction of time and expenses motivated local and foreign investors to
start business in Armenia. The simplification of real estate registration procedures is also noteworthy. With regard to the easiness of starting business index, Armenia had a notable progress and ranks
6th in the world. Armenia also has an advanced position (5th) in easiness of registration of real estate.
The work of the State agencies became simple and quick as a result of the introduction of electronic document management system (Mulberry) in 2008. In addition to the comfort for public officials, the system enables citizens to track their appeals and, in case of questions, directly contact the
responsible body of the government. As of 2013, 45 out of 48 municipalities are equipped with a fully
operational system. The system was introduced in 179 rural communities as well.
The electronic tax system became very popular among the citizens of Armenia. The system unifies
more than 40 state agencies. This is a simple and fast way to pay taxes and to send tax reports from
anywhere through the internet.
The use of e-governance in Armenian schools is very interesting. Armenias 1358 schools run electronic journals where marks, attendance and homework are being entered. The success of the system
has proved fundamental: since the beginning of the project, 13% of the pupils have improved their
marks and 22% have improved their attendance rate. Based on the results, the Ministry of Education
establishes an approval rating of schools. Schools are encouraged to become more successful. It is
a competitive environment that guarantees that schools will use this opportunity more productively
and successfully.
Armenias non-governmental sectors role in the development of open government is very significant. The Freedom of Information Center NGO promotes public awareness in freedom of information
through various campaigns. The organization actively monitors the government of Armenia: it sends
FOI requests for public information to different government agencies, analyzes the received data and
publishes them on its own website. The Freedom of Information Center has a black list which consists of those public officials who violate the right to the freedom of information. On the other hand,
however, the organization rewards the agencies that are most transparent with regard to the freedom of information.
There are several major challenges related to the development of E-governance in Armenia. However, with the efforts of the Armenian government, NGOs, the private sector and international organizations these challenges can be overcome. The challenges of E-governance development in Armenia are as follows:
Small number of Internet customers
Although the Internet usage in Armenia has grown in recent years, only 60% of the population are
using the internet. The Armenian government and the private sector represented by the communications companies are working in order to increase access to the internet in all regions and villages of
Armenia. The second problem is the lack of knowledge of how to use the internet among the citizens
of Armenia. The Ministry of Education works to educate pupils in information technologies in schools,
and the government, with the help of the non-governmental sector, provides trainings to develop the
skills required to use electronic services.
Low rate of citizens participation in electronic governance
Armenia has a very weak position in terms of societys participation in E-governance -135th place

89

among 170 countries. In order to increase citizens involvement in electronic governance, the government has to implement more intensive campaigns. Also, electronic portals have to be simpler, customer-oriented and easy to use (user-friendly).
Private / Personal data protection
Simplicity and speed are the advantages of E-governance but this entails the risk of vulnerability
of personal data. To avoid this risk, the Armenian government has to find a balance between transparency and personal data protection. We should note that Armenia has not yet established a personal data protection office.
Cyber Security
Armenia has not yet established a national cyber security response team. Accordingly it is hard
for the government to fight against cyber attacks. The new action plan includes the establishment of
a cyber security center.

90

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http://www.eurasianet.org

Narine Daneghyan
Civic Activism in Georgia: Achievements and Challenges

Executive Summary
Though civil society has long been formed in Georgia, the phenomenon of civic activism started
intensively developing only from the 2000s.
Rose Revolution in 2003 can be considered one of the first achievements of civic activism when
the civil society was involved in its implementation at a rather serious level.
After the revolution, the ruling power was mainly formed by the same civic activists and was referred to as the government of public organizations/Soros government.
Civic activism in Georgia is developing especially intensively in the following areas: protection of
national/ethnic minorities, protection of sexual minorities and women, environmental activism, political activism etc. The research dwells upon each of the areas.
Presently, civic activism in Georgia faces a number of problems. The research tries to bring together all the problems and challenges that Georgian civic activists fight against. Particularly, it touches upon the subject of excessive dependence of activists and NGOs on international donors and the
lack of domestic funding sources.
It is an important problem as, when civil activists and NGOs fully rely on international funds, they
become directly dependent on these funds and, in the event the funding is no longer available, activists become passive or stop their activities altogether.
The research also touches upon the option of creating local funding sources as well as promoting
civic activism on volunteering basis.
The issue of experience and leaders as well as lack of instruments of consolidation of masses is
another problem on the path of development of civic activism in Georgia.
The problem of leaders does not imply the lack thereof. Moreover, there are many leaders among
civic activists in Georgia but they have few levers for consolidating people.
National minorities do not appear to be active in civic movements in Georgia, which is conditioned by the closed nature of both the communities of national minorities and the Georgian society
as a whole.
The research also touches upon concentration of political activism in the capital and major cities.
Currently, civic activism is concentrated in the capital of Georgia, Tbilisi, and a number of major cities, which forms a dividing line among them and the regions and becomes a reason for isolation the
regions from civic activism. However, local NGOs and foreign donors are taking steps to remedy this
situation.
As for the difficulties related to shifting from online activism to offline space - even though Facebook and other social networks play an important role in the development of civic activism in Georgia
- the number of those who press Like buttons on Facebook is considerably greater than the number
of those taking real actions.
There are very few examples demonstrating the achievements of civic activism but they do exist.
For instance, combating the operation of a gold mine in Sakdrisi.

103

The Vake Park movement has also been successful. The actions of the movement activists resulted in the candidates of various parties running for local self-government elections competing on who
will plant more trees.
The authorities also started taking interest in environmental issues. It should be noted that election campaigns did not make any environmental promises in recent past while much work has been
done in the area over the past two years. There are many people in the society now for whom environment plays an important role. Consequently, a large number of like-minded persons can be consolidated around the issue.
Many experts link the results of the 2012 parliamentary elections to the role of civic society gaining greater prominence. Thus, the footage showing humiliation of prisoners in one of the Georgian
jails that was disseminated a few days before the elections evoke a large wave of protest and had a
considerable effect on the results of the elections.
However, despite the aforementioned examples, the achievements of the civic activism are not
sufficient to secure for it the status of a decision-maker and the main goal of the activists in this context is to prove they also make decisions and can affect the decision-making process if needed. It will
prompt the authorities to reckon with civic activists and meet their demands in some cases. But it is
clear that the process has begun and, if there are no extra obstacles, we will probably be able to talk
about a well-established civil society in Georgia in a few years time.

104

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17 2014 . 23.06.2014
2
Ghazaryan, A., Tolosa, G. Remittances in Armenia: Dynamic Patterns and Drivers. International Monetary Fund.
23.06.2014
3
Armenian Development Agency. FDI Statistics 2013. http://www.ada.am/eng/for-investors/fdi-statistics/
23.06.2014
4
US Department of State. 2013 Investment Climate Statement-Armenia. http://www.state.gov/e/eb/rls/othr/
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108

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Stanic, K., Karapetyan, S. Guarantees within Pension Systems. 2010. Multi-pillar Pension System: Implementation
Challenges and the International Practice. USAID. Pension and Labor Market Reform Project (PALM) http://www.
epension.am/__vfs/106
19
Singlatery, R., Investable Instruments For Pillar II. 2010. Multi-pillar Pension System: Implementation Challenges
and the International Practice. USAID. Pension and Labor Market Reform Project (PALM) http://www.epension.
am/__vfs/106

113

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Singlatery, R., Investable Instruments For Pillar II. 2010. Multi-pillar Pension System: Implementation Challenges
and the International Practice. USAID. Pension and Labor Market Reform Project (PALM) http://www.epension.
am/__vfs/106
21
Armenia: Deems Pension Reform Unconstitutional, Eurasianet, April 2, 2014. Retrieved on July 14, 2014. http://
www.eurasianet.org/node/68222
22
Pay Time: Public Sector Employees to Start Making New pension payments after July 1 rise in Salaries,
ArmeniaNow.com,
http://www.armenianow.com/society/pensions/55687/armenia_pension_law_application_
public_sector. 01.07.2014. Retrieved on July 14, 2014.
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114

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1. Armenian Development Agency. FDI Statistics 2013. http://www.ada.am/eng/for-investors/
fdi-statistics/
2. Armenia: Deems Pension Reform Unconstitutional, Eurasianet, April 2 2014. http://www.
eurasianet.org/node/68222
3. Ghazaryan, A., Tolosa, G. Remittances in Armenia: Dynamic Patterns and Drivers. International Monetary Fund.
4. National Competitiveness Report of Armenia 2013-2014. Growth Imperative and Constraints. EV Consulting. Economy and Values Research Center, 2014.
5. Pay Time: Public Sector Employees to Start Making New pension payments after July 1
rise in Salaries, ArmeniaNow.com. http://www.armenianow.com/society/pensions/55687/
armenia_pension_law_application_public_sector
6. Singlatery, R., Investable Instruments For Pillar II. 2010. Multi-pillar Pension System: Implementation Challenges and the International Practice. USAID. Pension and Labor Market Reform Project (PALM) http://www.epension.am/__vfs/106
7. Stanic, K., Karapetyan, S. Armenian Pension System Overview. 2010. Multi-pillar Pension
System: Implementation Challenges and the International Practice. USAID. Pension and Labor Market Reform Project (PALM) http://www.epension.am/__vfs/106
8. Stanic, K., Karapetyan, S. Fiscal Effects on the Tax and Pension Reform. 2010. Multi-pillar
Pension System: Implementation Challenges and the International Practice. USAID. Pension
and Labor Market Reform Project (PALM) http://www.epension.am/__vfs/106
9. Stanic, K., Manukyan A., 2010. Introduction of Mandatory Funded Pillar in Armenia and Possible Risks. 2010. Multi-pillar Pension System: Implementation Challenges and the International Practice. USAID. Pension and Labor Market Reform Project (PALM) http://www.epension.am/__vfs/106;
10. Stanic, K., Karapetyan, S. Guarantees within Pension Systems. 2010. Multi-pillar Pension System: Implementation Challenges and the International Practice. USAID. Pension and Labor
Market Reform Project (PALM) http://www.epension.am/__vfs/106

120

11. US Department of State. 2013 Investment Climate Statement-Armenia. http://www.state.


gov/e/eb/rls/othr/ics/2013/204593.htm
12. . . http://www.worldbank.org/en/country/armenia/
overview.
13. .
. 2013. http://www.armstat.am/en/?nid=82&id=1516
14. .
. http://armstat.am/en/?nid=126&id=08001&submit=Search
15. , . 2010, ?
, .
. http://www.nplg.gov.ge/gsdl/cgi-bin/library.exe?e=d-01000-00---off-0ekonomik-00-1--0-10-0--0-0---0prompt-10--.%2e-4----4---0-0l--11-en-10---10-about-50--00-3-1-000-00-11-1-0utfZz-8-10-0-11-1-0utfZz-8-10&a=d&c=ekonomik&cl=CL4.2&d=HASH01102d428fe5f220a31b5580.7.2

121

Irina Guruli
Pension Reform in Armenia: Opportunities and Challenges

Executive Summary
The purpose of the research is to analyze the implementation of the pension reform in Armenia.
More specifically, to examine those challenges that the Government of Armenia (GoA) faced during
the planning and implementation phases. The research at hand assesses the success of the pension
reform and evaluates the degree to which it shall stimulate the economy, ensure job creation and ultimately economic growth in the country. The study consists of three chapters, six subchapters and
ends with conclusions. The paper presents economic overview of Armenia, analyzes existing pension
system, evaluates the taxation system and investment opportunities, and examines the scheme and
characteristics of the implemented pension reform.
The study applied both primary and secondary research methods. The secondary research comprised the study of materials prepared by international donor organizations on the topic as well as
the analysis of relevant statistical information. Within the primary research, 13 in-depth semi-structured interviews were conducted with the experts working on the issue, representatives of the government, academia and non-governmental organizations.
The necessity of implementing the pension reform in Armenia was dictated by a number of factors: the existing system was unstable and risky, and was characterized by systemic problems. Moreover, against the background of aging population, the ratio of active labor force and the number of
pensioners changed significantly. The migration processes exacerbated the existing picture. As a result, the budgetary burden was increased; the social expenditures to gross domestic product (GDP)
ratio was gradually increasing. Ultimately, the international donor organizations together with the
GoA started working on the creation of a new pension model. The goal of the project was to establish a multi-pillar pension scheme in the country. The working process on the pension system reform
took 10 years.
In 2010, the Armenian National Assembly adopted five laws that created the basis for the
multi-pillar pension system. The Law on Funded Pensions officially entered into force starting from 1
January 2014. According to this law, the mandatory pension contributions apply to all citizens of 40
years and younger (born after 1974). Those who are older than 40 can participate on the voluntary
basis. Once a citizen joins the system, he/she is unable to change the pension scheme, even in case
of job loss. According to the new scheme, the amount of contributions is 10 percent of gross income.
Pension contributions are made by employees. At the same time, a participants contribution is
5 percent, while the remaining 5 percent is a cost-share contribution provided by the government.
However, there is an upper cap for the contribution provided by the government 25 000 Armenian
Drams (AMD). The mobilized sums shall be managed by two asset management companies that shall
invest the accumulated amount. In parallel with the above-mentioned initiatives, a taxation reform
was conducted, a unified income tax was introduced; the social insurance fund was abolished that
was responsible for distributing the insured pensions.
The governmental initiative caused a protest movement to surge in the country Dem.AM (I am
against!). The protest of the participants was prompted by a decrease in their monthly disposable
incomes due to the mandatory pension contributions and by the mistrust towards the government.
In line with the protests, four opposition parliamentary parties turned to the Constitutional Court,
since, in their view, the newly adopted law was anti-constitutional. This was the very first case in the
history of independent Armenia when a civil society initiative succeeded in its endeavor. According

122

to the decision made on 2 April 2014 by the Constitutional Court of the Republic of Armenia, certain
provisions of the Law on Funded Pensions were considered unconstitutional and the government was
given time until 30 September 2014 to make the necessary amendments.
Those provisions in the law that were in conflict with a persons right to administer his/her possession, i.e. salary, have been recognized anti-constitutional and invalid. According to the law, a person was to make pension contributions to the private pension funds; this was the very provision that
was recognized as anti-constitutional. On 27 June 2014, President Serzh Sargsyan signed the amendments to the law. According to the amendments, starting from 1 June 2014, public sector employees
born after 1973 have to provide 5 percent of targeted social assistance. These payments shall substitute the term pension contributions and, instead of the private pension funds, shall be directed
to the state budget and only after this shall be distributed among the pension funds. Participation
shall be voluntary for those employed in the private sector up until July 2017, after which date all employed including the private sector shall be obliged to make social payments.
According to the amendments made to the law, an upper cap for social contributions has been introduced. More specifically, starting from 1 July 2014 until 1 July 2020, the upper cap for the citizens
on social assistance in 500,000 AMD (from salaries), and the annual limit is 300,000 AMD (for the income from entrepreneurial activity). Starting 1 July 2020, the monthly upper limit is defined as 15fold minimum monthly wage defined by the Law, the annual upper limit will be 180-fold minimum
wage as of 1 January of the reported year.
Moreover, if a citizen born between 1964-1974 voluntarily engages in the pension reform before
1 July 2017, the co-funding from the state shall equal 100 percent of his/her pension contribution. It
is expected that the reform shall increase the investment portfolio and institutional investments, foster business development, job creation and economic growth.
The study has revealed major hindering factors that have been disrupting the implementation
process of the pension reform starting from 1 January 2014. The pension reform model itself that
took 10 years of hard work on the part of Armenian and international experts is viewed as less problematic. However, minor legislative loopholes and challenges remain an issue.
The research has showed that the major problem was the lack of a correct, targeted information
campaign, the lack of trust towards the government, low level of transparency in the entire process.
The pension reform scheme is so complex that there was a need to present it to the citizens in an understandable way. Moreover, the proposed system lacked and still lacks flexibility it is impossible to
withdraw from the system at any time. At the same time, the interests of highly paid citizens are not
properly protected.
The mistrust of the citizens towards the pension reform was caused by the obscurity of the asset
management companies, doubts with regard to their professionalism, reliability and productivity of
their plans to invest the attracted sums in the government treasury bills, which would only increase
the domestic debt. Underdeveloped capital markets have been identified as a challenge as well.
In order to better utilize investment opportunities in Armenia, it is necessary to undertake structural reforms directed towards the alleviation of corruption and reforming the taxation system so that
a more predictable business and investment environment is created in the country.

123


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sapensio%20reporma_NEW_ENG_WEB_2.pdf
34
EU and Institute of Social Studies and Analysis (ISSA): Social Protection and Social Inclusion inGeorgia, page
130 EPRC Georgia, Do We Need a Pension Reform?, page 18, http://www.eprc.ge/admin/editor/uploads/files/
sapensio%20reporma_NEW_ENG_WEB_2.pdf
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40
, Georgian Economic Outlook, http://www.mof.ge/en/Reports EU and
Institute of Social Studies and Analysis (ISSA): Social Protection and Social Inclusion in Georgia, page 130, EPRC,
Do We Need a Pension Reform?, page 18.

136

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1. OECD: Pensions at a Glance 2013, OECD and G20 Indicators (http://www.oecd.org/pensions/
public-pensions/OECDPensionsAtAGlance2013.pdf)
2. EU Institute of Social Studies and Analysis (ISSA): Social Protection and Social Inclusion in Georgia, 2011
3. EPRC Georgia: The Social and Economic Platforms of the Political Parties and their Expert Review, 2013
4. EPRC Georgia: Do We Need a Pension Reform? 2013
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Susanna Karapetyan
Georgia: Why And How To Reform The Pension System?

Executive Summary
The pension income provision is one of the most topical and socially sensitive challenges faced
by nearly every country in the world. Factors behind reforming the pension systems may vary from
country to country, but the goal of reforms is the same: the assurance of short-term and long-term
financial sustainability of the pension system and provision of adequate retirement income.
Maintaining the balance between the adequacy of pensions and the financial sustainability of the
pension system is a challenge, especially in case of aging population. There is a trade-off between adequacy and financial sustainability: provision of generous state pensions is costly and may threaten
the financial sustainability of the pension system.
How do we ensure adequate retirement income without jeopardizing financial sustainability of
the pension system? International practice offers three main solutions: extend the working life by
increasing the statutory retirement age, provide state pensions to the most vulnerable groups and,
finally, encourage the pension savings to close the gap between the state pensions and the adequacy level.
The current study intends to describe to the readers the current pension system in Georgia,
demonstrate the challenges faced by the pension system, present the directions of pension policy
and approaches towards reforming the system.
In order to understand the socio-economic situation in Georgia, analyze the challenges of the
pension system, and draw parallels with the international practice, both primary and secondary research methods were employed: the desk research during which the existing literature was studied
was combined with 15 face-to face interviews with pension experts, representatives of state agencies
responsible for the pension policy development and implementation, representatives of private sector and civil society, political parties and independent experts.
To make the paper easy and interesting to read, the research topic has been divided into several
sub-topics. Each sub-section provides situation analysis and explanations and clarifications of pension terminology and policy approaches.
Since 2004, radical liberal reforms in Georgia were directed towards the creation of a stable macro-economic environment: the tax policy and administration have been significantly improved, the
factors hindering the free and fair competitive entrepreneurial activity have been essentially eliminated, and preconditions have been created for regional diversification of entrepreneurial activities
and generation of new jobs, which in turn, is expected to result in an inclusive economic growth.
Low, efficient and simple taxation contributed to the increase in budget revenues: the share of
tax revenues in total budget revenues constituted 93.2% in 2013 compared to 70% in 2004; the budget deficit has improved substantially as well: in 2013 it declined to 2.8% from 9.2% in 2009. However, the global financial and economic crisis certainly has impacted the economic and social development of Georgia: in 2009, economic decline of 3.8% was registered. The economy started to recover
in 2010.
Despite the efforts of the Government to maintain the economic growth and a certain degree of
success achieved as a result, the labor market outcomes in Georgia are unsatisfactory: 60% of employed are engaged in the non-formal sector of economy, mostly in subsistence agriculture.

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Poverty remains a challenging issue for the country. Despite the fact that GDP per capita comprised 3,663 USD in 2013 (compared to 1,188 USD in 2004, and, according to the World Banks classification, the country has moved from the category of low income countries to the category of low
middle income countries), the economic growth was not distributed evenly: 21.4% of the population had consumption below 60% of the median consumption in 2013, and the registered share of the
population under poverty threshold was 9.7% compared to 6.7% of 2007.
After gaining independence Georgia, like all former soviet republics, inherited a mandatory defined-benefit, pay-as-you-go pension system. However, the provision of generous pensions, the
way it was before independence, was no longer possible and, starting in mid-1990s, successive governments in Georgia initiated and implemented pension reforms. Several stages of reforming the
pension system can be identified in Georgia:

From mid-1990s to 2002 - the stage of mainly parametric pension reforms with some
attempt to implement systemic changes: the insurance and social pensions were replaced
by one flat rate universal pension (1995), the statutory retirement age was increased by
five years for both men and women (1996), legal entitlements for early retirement were
eliminated (1998), and, what is most noteworthy, the Law on Non-State Pension Insurance
was passed in 1998 and enacted in 2001, providing Georgians with an opportunity to make
voluntary pension savings;

In 2002-2003, another attempt of reforming the pension system was initiated with the aim
to implement a multi-pillar pension system in Georgia. The idea of this initiative was to
introduce the notional defined contribution system (NDC) and increase the retirement age
to 65 both for men and women. The package of laws was even adopted by the Parliament
and was to be enacted starting 1 January 2004. However, due to political changes in 2003,
it was first postponed and then declared invalid;

The next stage of reforming the pension system can be attributed to 2004-2008, when
again the transition to private pension scheme was put on the agenda. In 2008, things went
as far as the adoption of draft bills, foreseeing gradual decrease in income tax rates and
introduction of tax privileges to encourage savings. The authorities considered this a move
towards systemic reformation of the pension system, as the Laws made profitable all types
of investments, including pension ones. However, due to the changes in the Tax Code, all
types of privileges were eliminated, undermining further development of private pension
schemes as a result;

The current stage of initiated reforms, when the universal flat rate pension has been
increased to the subsistence minimum level: the adequacy in terms of meeting basic minimal
needs is considered to have been obtained and the Government is in the preparatory
stage of designing and implementing a mandatorily funded pension pillar to close the gap
between the state pension level and the level of retirement income needed to maintain
preretirement standard of living.

The need for systemic pension reform in Georgia is explained by the same factors as in the developed world: low fertility rates, improved life expectancy at birth, migratory processes and, as a result,
an aging population and a financially unsustainable pension system.
What would be the pension reform scenario in Georgia is difficult to say. However, our understanding is that two main approaches, at least for the state policy makers, are definite: implementation of the mandatorily funded pillar is a must and the mandatory contributions should not become,
by any means, an additional burden for the participants - a portion of the existing income tax should
be diverted to individual pension accounts.

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Whatever the choice made by the Georgian Government, the following considerations should be
taken into account, as they may impact the design and implementation of the reform: the size of the
pension market (number of participants, contribution rate and size of formal wages), level of labor
market informality (coverage challenges), level of development of the financial market, and the political consensus in terms of reform scenario.

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