Armenia, named country of the year by the Economist Magazine in 2018, has led a peaceful transition of power, introducing significant reforms in an inclusive and democratic manner. Nikol Pashinyan, MP and opposition leader, was elected Prime Minister on May 8, 2018. The new administration has identified anti-corruption efforts, free and fair parliamentary elections, and greater equity as its priorities.
Armenia’s economy is gaining strength, growing at over 5.2% in 2018. The growth has been supported by global recovery and a strong rebound in domestic demand. However, the country remains plagued by the twin evils of high unemployment and poverty. The fruits of growth are not shared across the nation.
A country rich in natural resources, particularly copper, molybdenum, gold and dimension stones, Armenia has 27 metal mines. These mines employ 9,000 people in rural areas, while metals and gems represent over 60% of total exports. Indeed, copper ore alone accounts for over a third of all exports. While Armenia has the accurate regulatory and legal framework in place to support the sector in a way that benefits its citizens, enforcement is far from ideal.
Early challenges
Against this backdrop and recognizing that extractive industries can drive economic growth and poverty reduction, the Prime Minister at the time, Hovik Abrahamyan, announced on July 28, 2015 the government’s commitment to make Armenia become compliant with the globally recognized transparency standard in the extractives sector, the Extractive Industries Transparency Initiative (EITI). The government met with both the mining industry and civil society, inviting them to participate in the process by presenting nominees for a Multi-Stakeholder Group. Such a group had never been created before to agree a joint approach to the mining sector.
With issues of trust from civil society and apprehensions from industry, it appeared that the EITI process might fail to engage all parties. Following a stalemate of many months, the World Bank, funded by the Extractives Global Programmatic Support (EGPS) Multi-Donor Trust Fund, organized a workshop which brought together government, industry and non-governmental organizations for the first time. Stakeholders agreed to create a multi-stakeholder group to implement the EITI standard, with equal voting power for each party. Armenia’s first EITI report was approved and published in January 2019, covering 2016-2017 fiscal years.