ENTERPRISE DEVELOPMENT AND MARKET COMPETITIVENESS PROJECT FINAL REPORT

December 2014 This report was produced for review by the United States Agency for International Development. It was prepared by the USAID Enterprise Development and Market Competitiveness Project implemented by The Pragma Corporation and its partners. 0

Table of Contents

ABBREVIATIONS ...... 2 EXECUTIVE SUMMARY...... 6 IMPLEMENTATION STRATEGY ...... 10 VALUE CHAIN COMPETITIVENESS ...... 13 Bio-Pharmaceuticals ...... 13 Food Processing ...... 19 Tourism ...... 24 Information Technology...... 31 WORKFORCE AND ENTREPRENEURSHIP DEVELOPMENT ...... 36 Center for Entrepreneurship and Executive Development (CEED) ...... 40 Empowering Armenia’s Women Entrepreneurs ...... 45 BUSINESS ENVIRONMENT IMPROVEMENT ...... 48 ACCESS TO FINANCE ...... 58 Small Enterprise Assistance Funds...... 63 Appendix A: Financial Report, by Line Item ...... 65

Appendix B: List of EDMC Stakeholders and Supported Companies ...... 66

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ABBREVIATIONS

3DMU 3D Modeling Union ABB Armenian Business Bank ADR Alternative Dispute Resolution AGBU Armenian General Benevolent Union AGG Armenian Guides Guild ASA Air Services Agreements ATF Access to Finance ATS Association of Technologic Startups B&B Bed & Breakfast BDS Business Development Services BEI Business Environment Improvement BSSRC Black Sea Silk Road Corridor CAPA Corrective and Preventive Action CAPD Civil Aviation Policy Department Team CDCS Country Development Cooperation Strategy CEED Center for Entrepreneurship and Executive Development CEFE Competency-based Economies through Formation of Enterprise CEO Chief Executive Officer CGF Caucasus Growth Fund CIS Commonwealth of Independent States CJSC Closed Joint Stock Company CRM Customer Relationship Management CTD Common Technical Document CTS Caucasus Travel Show DB Doing Business DCA Development Credit Authority DRC Domestic Research Cost EBRD European Bank for Reconstruction and Development EDMC Enterprise Development and Market Competitiveness 2

EIF Enterprise Incubator Foundation EMMP Environmental Mitigation and Monitoring Plan EU European Union FAO Food and Agriculture Organization of the United Nations GEDF Gyumri Economic Development Foundation GDCA General Department of Civil Aviation GC Gas Chromatography GITC Gyumri IT Center EIF Enterprise Incubator Foundation GFSI Global Food Safety Initiative GCP Good Clinical Practices GDP Good Distribution Practice GLP Good Laboratory Practice GMP Good Manufacturing Practices GPP Good Pharmacy Practice GSP Good Storage Practice GOAM Government of Armenia HACCP Hazard Analysis and Critical Control Points HDIF Homeland Handicraft Development Initiative Foundation HMS Hotel Management System HPLC High Performance Liquid Chromatography HR Human resources ICARE International Center for Agribusiness Research and Education ICT Information and Communications Technology IFC International Finance Corporation IPM Integrated Pest Management ISO The International Standardization Organization ISO/IEC International Organization for Standardization/International Electrotechnical Commission IT Information Technologies

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RA Republic of Armenia R&D Research and Development RCI Regional Competitiveness Initiative (USAID funded project) LLC Limited Liability Company MEET Middle East Education through Technology MIC Microsoft innovation Center MoE Ministry of Economy MOU Memorandum of Understanding MPIU Medicine Producers and Importers Union NCFA National Competitiveness Foundation of Armenia NGO Non-Governmental Organization NPPO National Plant Protection Organization NSS National Statistical Service NTO National Tourism Organization OXFAM Oxford Committee for Famine Relief PCI DSS Payment Card Industry Data Security Standard PERSUAP Pesticide Evaluation Report and Safe Use Action Plan PCI DSS Payment Card Industry Data Security Standard PFIs Partner Financial Institutions PIC/S Pharmaceutical Inspection Co-operation Scheme PMP Performance Monitoring Plan PNA Product Network Analysis PPP Public-Private Partnership PSC Procurement Support Center ODR On-line Dispute Resolution QS Quick Start SCDMTE Scientific Centre of Drug and Medical Technology Expertise SCPEC State Commission on the Protection of Economic Competition SEAF Small Enterprise Assistance Fund SME Small and Medium Enterprise

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SME DNC Small and Medium Entrepreneurship Development National Center SPS Sanitary and Phytosanitary TRF Tatev Revival Foundation SSFS State Services for Food Safety STTA Short Term Technical Assistance SWOT Strengths, Weaknesses, Opportunities, and Threats TO Tour Operator ToT Training of Trainers TVET Technical Vocational Education and Training UCO United Nations World Tourism Organization UITE Union of Information Technology Enterprises UITO Union of Incoming Tour Operators UNWTO United Nations World Tourism Organization USA United States of America USAID United States Agency for International Development USDA United States Department of Agriculture USEPA United States Environmental Protection Agency USSR Union of Soviet Socialist Republics VC Value Chain WB The World Bank WED Work Force and Entrepreneurship WFTGA World Federation of Tourist Guides Associations YSMU Yerevan State Medical University YSU Yerevan State University

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EXECUTIVE SUMMARY

The Enterprise Development and Market Competitiveness (EDMC) project was a three-year USAID-funded project and implemented by a consortium of international and Armenian development consulting companies under the leadership of the Pragma Corporation. EDMC sought to facilitate the development of competitive enterprises and value chains by stimulating innovation, improving management capacity, enhancing workforce skills in key occupational niches, accelerating new enterprise formation, improving access to finance, and addressing critical shortcomings in the business environment. The overall goal of EDMC was to assist the Armenian private sector to sustainably transform the competitiveness of high potential value chains in the Armenian economy in a manner that drives major increases in private investment and export growth, and expands employment. This was to be achieved through the identification of value chains with strong growth potential; and the analysis and prioritization of critical growth constraints limiting the capacity of firms in these value chains to improve productivity and fully realize their growth potential. The project incorporated an intensive focus on targeted technical/training support to effectively address firm- level constraints to competitiveness enhancement. At the same time EDMC utilized the strategic information on growth constraints generated at the firm and value chain level to identify and prioritize major legal/regulatory, training/workforce development, and development finance impediments to sustainable firm growth in high potential sectors. This provided a unique vantage point for the project from which to effectively prioritize and target institutional strengthening support efforts in a manner which would yield maximum impact in stimulating enhanced competitiveness for firms in our key value chains. The EDMC implementation strategy fully supported USAID/Armenia’s new Country Development Cooperation Strategy (CDCS) for 2013 – 2017. EDMC supported CDCS Development Objective 1: Inclusive and sustainable growth enhanced by working directly with anchor firms in high potential value chains, extending the reach of our technical assistance into all ten regions of Armenia (“going local”), advances regional integration, (tourism regional corridor development) and increases our outreach to women and youth for workforce development and employment in all four value chains. EDMC also supported CDCS Development Objective 2: More participatory, effective and accountable governance through our engagement of the private sector, government and civil society (including Diaspora groups) as co-partners in the implementation of our activities and as recipients of grants. EDMC delivered a strategically focused and prioritized yet opportunistic approach and program to increase jobs, incomes and exports, placing the Value Chain competitiveness component at the project’s helm; while other components organized their efforts in a manner that effectively addressed the competitiveness enhancement needs of enterprises in the selected sub-sectors, and made differences on cross-sectorial challenges. As a result, EDMC met or exceeded all targets for the Export, Sales and Employment growth in all target value chains. This is underscored by the transformation success that EDMC achieved across a range of project areas. These included playing a lynchpin role in moving forward the historic reform in the aviation area. This is an area in which the donor community was advocating for reform over many years; and which EDMC played a key role in moving forward to the point where the GOAM is in the course of implementing an historic Open Skies Policy. Similarly, the GOAM was long advocating for GMP compliance on the part of major pharmaceutical companies in Armenia. As a result of strong and well-received EDMC assistance, the GMP certification process for local pharmaceutical companies was successfully completed. This is widely viewed by the public and private sector in Armenia as an historic breakthrough, and one in which EDMC played a key role. Similarly, EDMC jumpstarted the nascent SME equity fund market with major equity investments in SME

6 companies; significantly increased sales and exports across a network of value chain companies in the sectors in which EDMC was working; and played a major role in driving development and initial implementation of a dynamic tourism attraction strategy which helped drive major additional tourism inflows from a major client markets. The Value Chain competitiveness component played the leading role within EDMC in prioritizing competitiveness-related issues, problems and opportunities, and worked jointly with the other EDMC components to effectively address them. Based on our rigorous value chain analysis, in year-one, Information Technologies, Bio-Pharmaceuticals, Tourism, and Food Processing were identified as the sectors with the greatest potential for increasing employment, incomes and exports. Further using targeted technical assistance and grants funding EDMC assisted, directly or indirectly, hundreds of small and medium enterprises (especially women owned businesses) making EDMC the “go to project” for the private sector. Across the project, an “account manager” relationship between our staff and client firms was established to work towards shared goals on a firm-level basis. This empowered individual EDMC staff to draw on resources from the entire project (value chains, legal, finance and workforce) for their clients benefit and hold each firm and account manager accountable for the agreed upon results in the PMP. EDMC assisted over 200 IT companies and startups (more than 50% of the sector) in strategic marketing and technological entrepreneurship development through networking events in Armenia and abroad to enhance product commercialization and market expansion (exports). EDMC supported Armenian startup companies to present their products and services to new clients in more than 20 IT product promotional events in Armenia and abroad, including in the DigiTech Expo, DigiTech Business Forum, ArmTech, CeBIT Germany, Hannover Messe and Georgian IT Innovation Event, that resulted in partnership agreements, awards and future avenues of cooperation. EDMC supported the development of a network of IT mentors for startups and provided intellectual input and support for targeted contests (Imagine Cup, StartUp Cup and others) that resulted in the creation of more than 50 value added or new IT products and prototypes. Through our grant mechanism, 12 new and innovative IT products were developed (web solutions and mobile apps). Demand driven advanced programming skills training was delivered for more than 130 participants. As a result, two new regional company branches were opened in Gyumri and Goris, enhancing HT diffusion and increasing HT career options to other regions of Armenia. Given the critical need for GMP compliance and the industry’s focus on exports, EDMC’s support for the pharmaceutical sector had two main directions: at the company and policy level. Focused one-on-one, firm-level technical support (mentoring) for Good Manufacturing Practices (GMP) compliance resulted in two firms receiving GMP certification and the third company expected to receive certification in 2015. As a result of EDMC assistance the Ministry of Health’s Drug Agency has been recognized by its international peers as having the qualifications to conduct GMP inspections of Armenian medicine producers. EDMC delivered series of specialized trainings on GMP, GDP, GCP, GPP, CTD environmentally sound pharmaceutical waste management to more than 400 participants. EDMC assisted firms received onsite coaching to verify and implement their CAPA plans. Over 90 participants completed an online course in international Good Clinical Practice (GCP) for the first time. EDMC assisted three generic medicine producers and two research organizations in developing action plans to address gaps in conducting bio- equivalency studies. Six companies improved their marketing plans for targeted international and domestic markets through EDMC technical support. EDMC support the processed, fruit, vegetable and herb value chains through industry-specific technical training and export enhancement-oriented activities such as participation in world trade fairs, certification and standards compliance, and food safety. International standards were at the crux of EDMC’s work which resulted in our assistance for a dozen of companies that received 7

Hazard Analysis and Critical Control Points (HACCP) pre-audits and gap analysis. EDMC, jointly with IFC, trained 10 companies and eight business development services (BDS) providers in Global Food Security Initiative standards. Armenian National Accreditation Body was assisted in implementing ISO/IEC-sound management and documentation system, and State Service for Food Safety was supported to approximate the Armenian phytosanitary regulations with EU guidelines. EDMC supported the improvement of laboratory services offered by the publicly owned Veterinary-Sanitary and Phyto-Sanitary Center. EDMC assisted eight organic food producers in meeting their organic certification requirements and these firms to international. Through targeted EDMC assistance 11 food processing SMEs received auditing and consulting services from a local BDS provider to enhance their export marketing capabilities. EDMC conducted the first Pesticide Evaluation Report and Safe Use Action Plan (PERSUAP) in Armenia to cover all of USAID’s current and future agriculture projects and programs. EDMC accomplished a comprehensive set of new product development and promotional activities at the local and regional levels, serving as a bridge between the Ministry of Economy’s Tourism Department and public-private partnership National Competitiveness Foundation of Armenia (NCFA). Tour product inventories were completed and regional tourism guides and maps were developed for all Marzes. EDMC effectively introduced a destination management approach for Armenia. Several tourism site management plans and architectural design plans were prepared for regional tourism development in key tourism destinations (such as Tatev Monastery and its 10 surrounding villages, Noravank and Areni cave area, Mozrov cave and 5 other destination), which will serve as a precursor to the World Bank’s $50 million Tourism Economy. EDMC also supported the GOAM in developing various strategies and master plans, including the Armenia’s Tourism Development Strategy, the Tourism Marketing and Branding Strategy and Action Plan, as well as Armenia’s second Visitor Survey, which were developed as instruments for the international promotion of Armenia. The national tourism portal, which was developed by EDMC in partnership with NCFA, incorporated the tourist attraction concept and the outreach approach, as well as look and functionality based on the strategic, yet actionable recommendations outlined in the Marketing and Branding strategies. EDMC advised the GoA on the re-structuring of NCFA’s Tourism Department into the National Tourism Organization (NTO). EDMC, in close coordination with the private sector and the GOAM, developed detailed guidelines for tourism signposting nation-wide. The project also facilitated linkages between tourism value chain actors through targeted market- driven training initiatives that addressed constraints and connect with market opportunities. EDMC promoted rural and cultural tourism initiatives through the development of new tour packages and products, and by supporting the organization of several regional and rural festivals (Arts and Crafts Festival in Gyumri, Sheep Shearing festival in Tatev area and a number of other festivals). EDMC promoted Armenian Tourism branding and visibility in foreign countries assisting local tour operators to participate in a major European travel exhibition in Italy and Russia, and supporting the organization of a major regional travel exhibition in Armenia. In cooperation with TBS (www.armhotels.am), EDMC installed the new Hotel Management System software in 30 hotels and B&Bs outside of Yerevan. Thanks to EDMC assistance the Armenian Tour Guides Guild (AGG) won a competition to host the establishment of the WFTGA's International Training Center for students from the Eastern Europe region in the premises of the Yerevan State University. In addition more than forty Armenian cultural, historical and natural sites were marked with 389 high quality directional signs, information panels, trail markers, and walking tour plaques by EDMC grantee - the Black Sea Silk Road Corridor (BSSRC) project. These sites will also be listed in an online directory of the Silk Road and will thus be available to international tourists.

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Specific issues that impeded the competitiveness of companies within the selected sectors with regard to workforce development, legal and regulatory constraints and access to finance, were addressed in a comprehensive manner. EDMC successfully promoted a new dynamic between the private sector, and academic and training institutions which generated a more cohesive and transparent dialogue on competitiveness enhancement strategy. Particularly, EDMC provided professional and skills development trainings to more than 2,000 specialists leading to their employment in the four targeted value chains. More than 50 education institutions and vocational training providers were supported with curricula development, capacity building and Quick Start training, career fairs, internships and other technical assistance. Through EDMC support, more than 30 enterprises introduced innovative technologies and managements processes and established new branches outside of Yerevan. EDMC drove major improvements in the legal/institutional framework, working with progressive forces within the GOAM and in the private sector in the fields of civil aviation reform, customs law reform, helping exporters, public procurement, competition, copyright, reform of the law on medicines, business restructuring, food safety law reform, work with the Regulatory Guillotine, e-commerce facilitation, inspection reform, improving Armenia’s Doing Business score, promotion of alternative dispute resolution etc. In this regard more than three hundred legal recommendations were made, 261 accepted by counterparts (185 were harmonization or approximation measures), and 37 measures were adopted in Decisions of the GOAM. EDMC’s strategic approach to access to finance was a “double-sided” approach to increasing utilization of financial services— on the one hand working directly with companies in the target value chains to improve their bankability and financial management; while simultaneously working with financial institutions and stakeholders to improve the efficiency and cost-effectiveness of their SME outreach and risk analysis processes. As a result, EDMC documented 500 financial transactions between the PFI (and even one additional bank) totaling more than $20 million during the 30 months of operation of the ATF component. The project directly supported the development of equity fund institutional capacity and leveraged major equity fund resources through the establishment of a branch office of the Small Enterprise Assistance Fund (SEAF) in Armenia. SEAF successfully secured several equity investments in Armenia. Gender and the environment were priority cross-cutting themes throughout the life of the EDMC project. EDMC piloted the innovative Women in Development Interns and Young Professionals programs that other USAID implementers have since replicated. EDMC also implemented the recommendations emanating from our Initial Environment Examination (IEE) analyses in the Tourism, Food Processing and Pharmaceuticals value chains. A Pesticide Evaluation Report and Safe Use Action Plan (PERSUAP) for Armenia were completed as well. EDMC had a “green office” policy for all its internal operations based on international best practices. The project promoted competitiveness enhancement with the strategic knowledge and experience of financial sector and training partners CEED and SEAF, and via the expert competitiveness enhancement services of EDMC key local subcontractors Grant Thornton and Global SPC, as well as several BDS providers. Our network of civil society partners included business associations, universities and non-government organizations which EDMC partnered with through our short-term technical assistance and grants portfolio. EDMC maintained a strong reputation as a credible partner with strong working relationships with several GOAM ministries (Economy, Finance and Justice) and the Office of the Prime Minister. EDMC’s place within USAID’s portfolio was unique among the Mission’s many projects and programs based on EDMC size and scope encompassing four value chains and three supporting components for legal reform, training and access to financing. EDMC concludes its activities with the submission of this final report to promote the sustainable replication of our results following program wrap-up. 9

IMPLEMENTATION STRATEGY The EDMC team of experts addressed competitiveness-enhancement challenges in a strategic and at the same time practical manner. EDMC utilized rigorous value chain analysis and selection criteria to assess the comparative advantage characteristics of different value chains, and to evaluate the prospects for converting those comparative advantages into dynamic competitive advantages for the Armenian economy. The project focused on mapping-out critical competitiveness enhancement-related reforms and institutional strengthening measures required for Armenia to drive increased investment, exports and employment in the Hospitality, Biopharmaceutical, Information Technologies and Food Processing value chains. Taking a value chain approach necessitated a clear understanding of the market system in its totality: the firms that operate within an industry from input suppliers to end market buyers; the support markets that provide technical, business and financial services to the industry; and, the business environment in which the industry operates. Such a broad scope for industry analysis was needed because the principal constraints to competitiveness often lie within any part of this market system or the environment in which it operates. In order to achieve the value chain development goals, the Value Chain Competitiveness team went step-by-step through the value chain development process to design, map and implement a support program that effectively targeted and addressed the key constraints to sustainable VC expansion. EDMC also focused on defining and effectively addressing the key knowledge, skill and networking gaps that was limiting the expansion of investment, jobs and exports in high potential value chains; prioritizing and helping implement critical enabling environment reforms that significantly improved the competitiveness landscape for the private sector; and facilitating bankability of SMEs and developing innovative value chain financing products that promoted investment financing in selected value chains. EDMC’s ultimate goal was to unleash the competitive potential of the selected value chains, and to help permanently transform private sector competitiveness in Armenia. The project collected significant information on the selected sectors and held direct meetings with sector companies in order to better understand their constraints and gather more and deeper information on the workings of the relevant value chains. Based on this strategically acquired information and critical constraints identified, a short-term (annual work-plans) and project life Action Plans were formulated and a series of critically important start-up activities for each VC were developed. Implementing the activities defined in each year’s work plan and working together with key subcontractors, additional opportunities for strategic institution-building interventions for EDMC in each VC and component was identified and prioritized. Together with the continuing market research and analysis that was conducted in each area, this in turn guided the formulation of comprehensive sector strategies during project life. Project Structure Through the Value Chain Competitiveness component, EDMC provided targeted technical and training support designed to improve strategic and operational management capacity, encourage technology transfer, strengthen quality control capacity, and enhance market linkages for enterprises in the selected value chains. The program also included three additional components designed to reinforce the impact of the direct enterprise level assistance on value chain competitiveness.

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The Workforce Development component focused on defining and effectively addressing the most critical labor supply shortfalls in key occupational skill niches that were limiting factors to enterprise competitiveness in the key value chains and improving the responsiveness of the vocational education and training systems in Armenia to respond to priority labor market training needs. EDMC also worked with Value Chain Competitiveness the Center for Entrepreneurship and Executive Development Information Bio-Pharmaceutical (CEED) in launching a specialized Technologies entrepreneurship mentorship

Food Processing program in Armenia, drawing upon Tourism the resources of the successful USAID-financed Eastern European mentorship network developed under prior CEED programs in eight Eastern European countries Business Workforce and (including four EU member Access Environment Entrepreneurship to Finance countries). Improvement Development The Business Environment Improvement component focused on prioritizing and effectively addressing the key legal and regulatory constraints that were limiting the volume and efficiency of private investment flows in Armenia and restricting the expansion of investment and productivity in key value chains. In this regard, the project focused on defining and working with the private sector and with relevant public sector institutions to eliminate key fiscal , financial regulatory, and commercial law-related bottlenecks that curtailed private sector competitiveness. Finally, EDMC’s Access to Finance component focused on working with innovative commercial finance institutions to expand the sustainable availability of SME financing and develop cutting edge value chain financing products that effectively scaled-up to dynamically increased investment financing for high potential value chains. In addition, the project supported the development of equity fund institutional capacity and leveraged major equity fund resources through the establishment of a branch office of the SEAF. In this regard, EDMC worked to expeditiously identify priority SME investment opportunities in key value chains for SEAF's new Caucasus Growth Fund. Value Chain Selection An in-depth study was undertaken for the purpose of helping to identify those VCs within the Armenian economy that had the greatest potential for increasing incomes and employment through expanding exports. This identification occurred through a combination of objective qualitative and quantitative analyses centered on the tools of domestic research cost (DRC) analysis, strengths/weaknesses/opportunities/threats (SWOT) analysis, and product network analysis (PNA). Numerous studies related to the various economic sectors in Armenia were collected and studied, and the methodology for an initial selection of economic sectors and subsectors was identified. The final selection, based on both qualitative and quantitative results, was both realistic and flexible based on criteria that had been previously established as the project’s objectives. The outcome was a list of priority value chains and amalgamations of value chains that offer the best potential for success. The general approach used in the study was to start with a broad number of potential candidates, chosen because they passed a threshold of average exports over the past five years equal to at least 500,000 USD. This pool was then narrowed down through a pre-selection process to 20 subsectors comprised of 40 individual value chains, defined sufficiently narrowly so that objective 11 qualitative and quantitative analyses could be undertaken, with the quantitative portion centered on the tools of DRC analysis. The goal of the DRC exercise was not only to see whether a country had a comparative advantage or disadvantage in producing a particular product but also to rank that product relative to other products. The results of the DRC analysis were then combined with those of the qualitative analysis using a system of weighted points, reflecting the EDMC project’s various objectives as expressed in the project documentation. Based on the survey results from a pool of hundreds of interviewed companies, a Domestic Resource Cost (DRC) analysis was prepared for each value chain. A separate VC Summary Sheet was prepared for each VC, designed to bring important information together, the structure of value chain (VC size/distribution, exports, linkages), quantitative indicators (exports, export growth, sales, employment), DRC indicator, comparative and competitive advantage-disadvantage (Strength/Weakness), growth potential (Opportunities/PNA), major constraints (Threats), and EDMC areas of potential assistance. The resulting ranking was used, along with the combining of some individual value chains into more manageable units for purposes of implementation, in order to identify the leading candidates for project assistance. This process and its results were presented to and discussed with USAID in order to arrive at the following groups of value chains that were selected for EDMC intervention: Information Technologies, Bio-Pharmaceuticals, Food processing and Tourism.

Tripartite Working Groups EDMC’s goal for each value chain was to focus on sustainable and results-oriented networked inter-linkages between specialized academic/training institutions, professional associations, BDS providers, regional/international mentorship/market networks, and tripartite VC Working Groups, in a manner that facilitated the formulation and successful execution of targeted institutional strengthening programs. In this regard, EDMC initiated the formation of VC specific tripartite working groups. In close cooperation with the Ministry of Economy, Bio-Pharmaceuticals and Information Technologies/Precision Engineering sectorial working groups were established to implement export-led industrial strategies adopted by GOAM in 2012. The working groups were effective platforms for discussing priorities of each sector, their bottlenecks, issues and next steps among representatives from the GOAM, private sector and EDMC. In 2012, EDMC, with OXFAM, initiated the establishment of the Agriculture Alliance to ensure a collaborative partnership and promote closer cooperation between food processing private companies, BDS providers, civil society and international organizations. This alliance became an important player from which mobilizing parties joined efforts towards the sustainable development of the food processing sector. EDMC, with NCFA, also set up the tourism development steering committee to coordinate tourism development activities. The committee was meeting regularly each month to discuss ongoing activities and next steps.

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VALUE CHAIN COMPETITIVENESS

EDMC worked to support selected value chains to overcome critical constraints through activities targeted at: facilitating private sector efforts to enhance competitiveness; support productivity of enterprises and value chains by stimulating innovation; introduction of new technologies; enhancement of managerial skills; compliance with international standards; greater cost-efficiency; and, effective product differentiation and related market access support to help reach new or niche markets. EDMC analyzed and grouped constraints and opportunities for each broadly-defined value chain into eight categories, which are important for its competitiveness:  Market access  Technology/Product development  Management and organization  Workforce and skills  Input supply  Business enabling environment (policy, regulatory framework)  Access to finance  Infrastructure These categories were utilized further in project’s work to systematically look at all areas that typically affect the success of a business and the overall competitiveness of a given VC.

Bio-Pharmaceuticals Armenia’s pharmaceutical industry is one of the fastest growing sectors in the country. In 2011, the Armenian Government included the pharmaceutical sector in its “Export-Led Industrial Policy of RA with Action Plan for 2012-2015”. The vision is the doubling of local pharmaceuticals shares in the Armenian market, becoming an import substituted industry and an expanding export market from CIS to EU and neighboring countries, in parallel adopting international best practices in the Armenia. Armenia is a medicine importing country, with only 7-10% (about 300 medicines) of the pharmaceutical market is comprised of local products. There are 17 licensed pharmaceutical producers that are all specialized in the production of generic drugs and buy most of their raw materials and chemical compounds from the European Union and the United States. There are about eight major companies that are generic producers, out of which six companies (Liqvor, Pharmatech, Arpimed, Medical Horizon, EscoPharm, and Yerevan Chemical-Pharmaceutical Firm) encompass local sales and exports, with the final two producing only for local market. Armenia produces approximately 300 medicines, 50-57% of which are exported. The average annual export growth was 24% over the last decade. The CIS countries are the major markets for Armenian companies. EDMC’s objective was to increase market share of local pharmaceutical firms from 10 to 20% of the domestic market and expand exports to CIS, EU and neighboring countries. This growth depended on the adoption of international best practices through the implementation of GMP to ensure the safety, quality and efficacy of medicines produced, thus making them competitive both in local and international markets. Given the critical need for GMP compliance and the industry’s focus on exports, EDMC’s support for the pharmaceutical sector had two main directions: at the company and sector/policy levels.

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GMP compliance and implementation moved forward both by the Government and pharmaceutical manufacturing companies.

GMP System Implementation in Armenia

Company Level- Sector Level- Pharmaceutical Manufacturer Government of Armenia

GMP Compliance Development & Adoption of Legal Acts/Regulations

GMP Pre-audit – Identification of critical and major deficiencies Capacity building of Drug Agency Mentoring/Consultancy - Development and implementation of CAPA Plans GMP joint PIC/S Inspection Membership

Professional skills development - Training of sector specialists GMP Certification Preparation/Publication of EU GMP and CTD Dossier Guidelines in Armenian

Company Level Support to Pharmaceutical Manufacturer EDMC, in close cooperation with the Armenian Drug Agency, organized a pre-audit of GMP compliance in conjunction with the SCDMTE. Two qualified international inspectors were hired for the inspections. A total of five companies - Liqvor, Pharmatech, Arpimed, EscoFarm and Medical Horizon - were inspected for GMP compliance in the beginning of project. The received inspection reports highlighting the critical, major and other deficiencies for GMP compliance. Based on the conclusions from the inspection reports, EDMC initiated additional assistance on preparation and implementation of CAPA plans (including issues on concept design, validation systems in sterile and non-sterile production, as well as GMP documentation system) for five Armenian pharmaceutical companies that resulted in the upgrade of their production quality and safety measures that were required for GMP certification. The international expert mentored the companies’ staff, provided pre-audit, consultancy and recommendations for each company how to meet GMP requirements. The focus on one-on-one, firm-level technical assistance for GMP compliance was the best approach for Armenian pharmaceutical companies to enhance their capacity.

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Enhancing Companies’ Capacity

EDMC collaborated with the GXP Center of Excellence in order to build the GMP capacity of company employees in the pharmaceutical and biotechnology value chains and facilitate compliance with GMP requirements. 12 specialized training courses were delivered by local and international expert trainers on GMP, GDP, GPP, GSP, and GCP to 350 participants increased professional skills of sector specialist, ensuring product quality. Over 90 participants completed an online course in international GCP for the first time. EDMC supported this training in collaboration with the GXP Center of Excellence, allowing them to design and conduct clinical trials of medicinal products before they were brought to the market. This is a new area of practice for Armenia and is expected to increase the number of professionals employed. Export of Armenian EDMC provided initial onsite pharmaceutical Pharmaceutucal Products marketing assistance to more than 20 employees by Region at six pharmaceutical companies (Liqvor, Pharmatech, Arpimed, Escopharm, Medical Horizon, Vitamax E). The efforts were provided to 1% CIS strengthen marketing skills that would lead to EU 37% increased sales and exports. EDMC’s international Asia 58% expert focused mainly on a gap analysis of the Georgia marketing/sales functions at the pharmaceutical 1% Other companies and provided support to the 3% development of marketing plans and recommended improvements to both marketing tools and market entry plans for the targeted international and domestic markets. At the same time, there was an acute need to improve infrastructure in the private and public sectors of Armenia for clinical trials, particularly bioequivalence studies, in-line with international GCP/GLP best practices that require all medicines, regardless of whether they were innovative or generic, undergo a scientific evaluation process to establish their safety and efficacy before they were marketed and sold to the public. In order to secure registration and, ultimately, approval for the sale of generic medicinal products both locally and internationally, a company must provide data demonstrating the quality, safety and efficacy of their product. Generic medicines must be

15 bioequivalent to the innovator brand or well-known generic before they can be marketed in the local and export markets – this is an international regulatory requirement. Bioequivalence study is a type of clinical study directed to healthy volunteers as part of GCP guidelines. EDMC completed an assessment of three pharmaceutical companies and two research organizations, delivered on job training and consultancy in order to help the companies address gaps as well as supported local pharmaceutical producers and government to improve their systems. EDMC supported the translation into Armenian and adjustment of the EU GMP regulation and drafting of new domestic regulation based on GMP by ensuring its compliance and harmonization with Armenian laws. This document supports private companies to meet GMP compliance. As a part of the required overall GMP compliance process, registration dossiers of medicinal products must be submitted in the EU CTD format. To support producers in meeting this requirement, EDMC supported the translation into Armenian and adjustment of the EU CTD guidance with a two-day training on procedures outlined in this 300-page document. In parallel with GMP implementation, domestic pharmaceutical companies developed strong regulatory affairs capabilities and tools as part of their overall corporate objectives to increase sales of Armenian-produced products in domestic and international markets. EDMC supported five Armenian pharmaceutical producers in their regulatory affairs and drug development function. Enhancements of this function increased the approval rates for marketing authorization of medicines that were sold in the Armenian and export markets. The international expert reviewed and assessed the regulatory affairs activities/capabilities, including product development processes, for six companies and delivered reports with recommendations for each company. Now the Armenian companies register dossiers of medicinal products in the EU CTD format. Promoting Pharma Products in International Markets In order to assist Armenian pharmaceutical companies to enter new and/or expand their existing markets and strengthen their ties with industry colleagues abroad, EDMC supported their participation in BRIDGE EXPO in Tbilisi, Georgia in April 2012 and International Exhibition PharmMedExpo, in Tashkent, Uzbekistan in September, 2013. The exhibitions contributed to the establishment of sound business connections and mutually beneficial agreements. The companies met and negotiated with partners, started preparatory work for the registration of their medicinal products and concluded the new contracts expending the volume of export. Linking Information Technologies to Pharmaceutical Business In its third year, EDMC has moved from individual sector assistance to encouraging the successful cooperative links between the project value chains. With rising sales, exports and investment potential EDMC supported the development of tools to make the pharmaceutical industry more efficient and strategically focused. To assist the pharmaceutical industry meet these increases in supply and demand, EDMC grantee Bever LLC used Microsoft Dynamics CRM in the development of a tool for the automation of manufacturers’ business activity within the pharmaceutical industry. This solution increased the productivity and efficiency within the industry, and reduced current expenses and loss during the functioning of the company users throughout the medicinal value chain as well as improve company-customer relationships. The system connected manufacturers and distributors with local pharmacies, hospitals, clinics and doctors to each other, managing processes and tracking key performance indicators that can be applied in different services for each user. Besides providing these tools, the company also created a package in which trainings will be delivered, alongside the provision of a well-researched user guide meant to ensure a self-sufficient working environment wherein IT specialists were available to tweak the program to fit the company’s specific needs. Bever LLC will also provide lifetime maintenance of the program to its network of users.

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Sector level support to the Government of Armenia Development and improvement of legal acts was a critical issue for the sector. Support was provided to develop the new regulations, as well as revision of the draft law on Medicines. Out of 49 recommendations provided by the project international expert, 32 were reflected in the draft law and submitted to the National Assembly of Armenia for approval. In order to facilitate the Drug Agency inspectors’ capacity building and membership in PIC/S, EDMC supported the participation by Armenian EDMC met or exceeded all targets for inspectors in the seminar on “Manufacturing the Export, Sales and Employment Audit of Medicines on Batch Records” in Saint growth in Bio-pharmaceutical Petersburg, and joint pharmaceutical facility value chain inspections in Ireland to learn best practices from the Irish Medicines Board. During the inspection Average annual expansion of sales in of local pharmaceutical companies three Bio-Pharmaceuticals value chain above international inspectors from PIC/S were hired the industry average with the participation of four local Drug Agency 14% 12% inspectors, who received “hands-on” training 12% 11% 11% 10% 10% from the expatriate advisors. The Armenian Drug 10% Agency inspectors are now qualified to conduct 8% inspections at production sites. The Drug Agency 6% would not have this capacity without EDMC 4% support over the three years. 2% 0% Company and sector level technical support for Year 1 Year 2 Year 3 GMP compliance resulted in first two firms, Liqvor and Arpimed, obtaining GMP certification Percentage change of total exports in and increased sales and exports; the three other Bio-Pharmaceuticals value chain firms expected to follow in 2015 . This was the big 25% achievement for Armenia, which would not 19% 20% 20% happen without USAID support. 15% 15% Promoting Parma Industry-Relevant Key 10% 6% Meetings and Conferences 5% 3% The annual Meetings without Ties, supported by 0% EDMC, became a tradition and was an effective Year 1 Year 2 Year 3 platform for the Armenian pharmaceutical businesses, including local producers and Average annual expansion of employment in importers and key government and public sector EDMC assisted firms in Bio-Pharmaceuticals representatives to discuss local production value chain compliance with GMP requirements, sector 10% 9% other pressing issues/priorities, recent 8% developments and next steps for future 6% achievements. Based on discussions and findings 4% EDMC in close cooperation with Government of 2% 2% 2% 1% Armenia and MPIU updated the sector 0% development action plan and took measures on Year 1 Year 2 Year 3 implementation and appropriate support that would aid the companies in meeting the Target Actual

17 requirements faster and increase the sales and export. EDMC supported the fifth International Pharmaceutical Competitiveness Conference in order to discuss common issues and new projects as well as to create and strengthen partnerships. Many of the issues involve regulatory, production, marketing, and product development issues. Participants included over 20 exhibitors (including domestic firms and international companies such as Pfizer, Abbott Laboratories, Teva Pharmaceutical Industries, Astellas Pharmaceuticals, etc.) and 500 doctors, representatives of pharmacies, and scientists and experts from Armenia and abroad. Encouraging Sustainable Pharmaceutical Environmental Practices The development activities in the pharmaceutical VC might potentially result in increased solid waste and water pollution. Therefore, the EDMC mitigated potential impacts on the environment by providing a capacity building and training program for 29 representatives from the pharmaceutical producers, distributors, the Armenian Drug Agency, university lecturers, students, and the MPIU. The international expert introduced the international pharmaceutical environmental best practices and the concept of green pharmaceutical production in order to assist the sector representatives integrate them into their own procedures. Regional Hub for Biosciences R&D and Industry EDMC supported the assess to the potential for developing a biotechnology cluster in Armenia, and developed the road map to establish Armenia as a regional hub, as well as an eventual world player in the Bioscience (Biopharmaceutical, Bioengineering, bioinformatics) Research and Development, alongside the industry as a whole. This ten year perspective provides plans for Public-Private Partnership “green-field” investment in the country and answers to the questions: “What is the potential for developing a biotechnology cluster in Armenia, and what must Armenia do to realize it?” It is based on a detailed assessment of the current industry landscape and comparator biotech clusters, with recommendations and action plans derived from Armenia’s strengths, as well as an overview of the difficulties and the actions required addressing its weaknesses. The proposed project has a major economic impact as it would bolster employment opportunities and increase bio-products and/or services for local use and export. For such an approach to succeed, Armenia needs to: 1) establish directed R&D programs within 2-3 years to yield results in near to midterm duration; 2) start to develop an educated work force within three years; and, 3) establish a sustainable and adequate source of funding to drive innovation. It was recommended to create a Biosciences Advisory Council and Bi-national Biosciences Funding Agency, followed by the establishment of a Biosciences R&D Center. Once completed, the creation of graduate-level education programs in biosciences would enhance and sustain the sector. Pharmaceutical Investment Guide Upon request of the Ministry of Economy EDMC developed Armenian Pharmaceutical Sector investment guide to promote the Armenian economy and investment possibilities internationally. This guide was issued as a pharmaceutical sector specific supplement to the Armenian Investment Guide developed by EDMC in 2013 providing additional detailed information to foreign investors about the Armenian pharmaceutical sector’s potential.

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Food Processing

Food processing is one of Armenia's leading economic sectors and is a high priority for the Government of Armenia. The sector's strengths include the high quality of local agricultural products, availability of qualified workers, and relatively low labor costs. Experts consider the Armenian food processing sector to have high development potential, particularly through the promotion of foreign cooperation and investments. Armenia has great potential to increase the manufacturing of the high-value and organic production, processed fruits and vegetables with modern packaging and compliance with the international food safety standards and expanding the volume of export to CIS, EU and other markets. In 2011, the Armenian Government included the food processing sector in its “Export-Led Industrial Policy of RA with Action Plan”. Most of the current crop used by agro-processing companies was established during the 2000- 2006 period to be worked with outdated Soviet industrial facilities and equipment. In spite of the production capacity, utilization typically ranges between 30% and 60%, though the sector has a significant potential to grow. With EDMC support in recent years, there was substantial growth in the number of companies operating in this sector, with an annual average exports increase by about 20%. The major country for export was Russia with 70%, followed by USA with 10%, Georgia and Ukraine with about 5% and EU 2%. The major constraints on the sector’s ability to export are food safety compliance issues and the lack of strong linkages between value chain players. EDMC emphasized compliance with internationally accepted and required standards as a prerequisite to encouraging exports within Europe, the Middle East and other significant potential markets. Hence a variety of activities are being implemented to promote these standards and encourage certification. Without compliance with international standards (indicatively HACCP and Organic), it virtually impossible to export products to Europe, the US and Middle East. Considering the existing outdated facilities and equipment, introduction of new technological approaches and practices was a fundamental requirement. EDMC’s strategic support targeted sub-sectors with greatest competitive potential by opening markets through food safety certification, food quality, marketing/sales skills development, new product development, and technical skills upgrading. EDMC supported the processed fruit, vegetable and herb value chains through industry and firm- specific technical training and export enhancement activities. Anchor firms participate in trade fairs and receive technical assistance for certification and standards compliance, marketing assistance, and introduction of food safety standards and protocols. Company Level Support to Food Processors Enhancing Companies’ Capacity Armenia has an exceptionally wide range of locally grown fruits and vegetables for canning, which are in demand in many countries. There are about 28 fruit and vegetable canning enterprises operating across the country. According to observations and based on the number of field visits of international expert identified that fruit and vegetable growers, marketers, and agriculture extension agents in Armenia lack adequate training and technical information on many aspects of crop production and post-harvest care in order to have consistent supplies of high quality products, which is required for success in both the domestic and export markets. Existing

19 constraints in production practices, cultivar selection, harvesting procedures, post-harvest temperature management, and packaging results in less than ideal product appearance and an abbreviated market life. Together with CARD a Global GAP Analysis Training was conducted in April 25-27, 2012. The training gathered 36 EDMC exceeded all targets for Export, participants from a number of food processing Sales and Employment growth in companies, state agencies and agricultural Food Processing value chain cooperatives. The Global GAP training course covered topics such as: the adoption of Good Average annual expansion of sales in Food Agricultural Practices, requirements for Global Processing value chain above the industry GAP certification, proper pre- and post-harvest average requirements, cleaning, sorting, grading, cooling, 25% 20% and packing. 20% Together with RCI, the training on EU Market 15% Access Requirements was delivered on June 12- 10% 10% 7% 12% 13, 2012. The training had 39 participants from 5% the herbal, fruit and vegetable processing sector, 5% agricultural cooperatives, and representatives of 0% the State Service for Food Safety. Year 1 Year 2 Year 3 (Q1, Q2)

The training included the food safety and quality standards of EU retailers, trends and Percentage change of total exports in Food developments in the EU food processing sector, Processing value chain EU legislation and Inco Terms, trading and 33% 35% payment terms, EU distribution channels, buyer 30% requirements. 25% 20% 20% In close cooperation with the International 15% 10% Center for Agribusiness Research and Education 10% 3% 3% (ICARE) BDS provider the training course on 5% 0% food processing/production technologies for 0% Year 1 Year 2 Year 3 (Q1, Q2) canneries and dried fruits and vegetables producers was prepared and delivered to help

Average annual expansion of employment in meet the demand by companies for these skills. EDMC assisted firms in Food Processing value The comprehensive assessment was conducted chain with 30 selected companies, and special training curriculum was developed to appropriately 10% 8% address the respective skill requirements of the 8% companies. Overall, 26 food technologists from 6% 5% 20 canneries and dried fruit and vegetable 4% 2% producing companies participated in the technical 2% 1% 1% trainings which covered a variety of topics ranging 0% 0% from the selection of quality fruits and vegetables Year 1 Year 2 Year 3 (Q1, Q2) to the production of high quality juices, jams, and Target Actual other preserves. Technologists discussed the use of vegetative raw materials, the making of natural vegetable conserves, methods of bacteriological Note: Food processing component ended in March, control, and packaging, labeling, and related issues. 2014. For that reason the Year 3 Target and Actual As a result of the training, participants had the numbers are covering only the initial six months of Year 3 (first and second quarters). capability to review the technical processes of processing raw materials in order to improve 20 quality and final appearance of products. Now they are able to reduce waste, as well as heating costs, develop a new product using the remnants of existing ones, regulate the quantity of inverted sugar used in syrups, and, more importantly, improve sterilization and hygiene. In order to enhance companies capacity on export marketing capabilities and increase the volume of Organic Certification export, eleven food processing SMEs (Byurakn, Bio- Process Universal, Nektar-Bonus, Avshar Prod, ABDA, Levon Introduction of LLC, Yervandashat, Mirg LLC, Gegham Sahakyan LLC, Organic Standards Arthur and Edita LLC, Rozfrud LLC) assisted in receiving auditing and consulting services from the local Business Support Center BDS provider. The Pre- audit project was carried out in three-stages: audit, training and consulting/mentoring for each company Field training to companies individually. The training and mentoring equipped the and their suppliers on companies with the proper expertise and capacity in organic production rules export marketing to develop foreign partnerships. Within the project the seminar was organized together with SME DNC to present the Enterprise Preparation of Europe Network opportunities for the beneficiary Management Plan SMEs. In the end of the project Business Support Center supported the companies to enhance the Inspection vertical and horizontal links within the value chains.

Dried fruit and vegetable production in Armenia has Review of Inspection Results great potential for exports. In order to be competitive in the global market the Armenian dried fruit have to be proposed to an acceptable price which depends of Certification course from many variables, among them taste, packaging, appearance once the major requirements are fulfilled (i.e. product safety). EDMC provided specific targeted interventions in dried fruit and vegetable sub-sector worked closely with SME DNC and food processing companies to improve the quality of dried fruit products that can be sold to the EU and other demanding, high value end markets. Projects were completed in three regions (Ararat, Armavir, and Syunik marzes) that involve specific measures to address quality deficiencies in dried fruit production by introducing optimized technological models, standards, certification market entry approaches, and publication of fruit drying manuals that incorporate modern techniques, and best practices. This activity builds upon a ToT series of sessions that had been previously delivered concerning drying technologies and the quality standards of dried fruits and vegetables in Armenia and ensures the sustainability of this work.

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Meeting International Standards International standards were at the crux of EDMC’s work which resulted in assistance for 11 companies that received Hazard Analysis and Critical Control Points (HACCP) pre-audits. The report on the pre-audit highlighted the results of eleven companies with his initial findings on gaps and requirements for compliance to HACCP. Two common major issues raised from the pre-audit were problems associated with the poor physical condition of buildings and industrial facilities, and with the obsolete equipment and Global Food Safety Initiative (GFSI) inventory at these production facilities. Both of the is an umbrella system, created by the leading above mentioned factors had a significant adverse global retailers and manufacturers, to effect upon food safety. The action plan and cost harmonize the standards on quality and food estimates for each company on what was safety. GFSI is not a standard itself, it rather required/recommended for HACCP compliance defines requirements for producers for provided and the expert consulted/mentored with standards and further certification. The companies that join GFSI will equally recognize each individual company on how they would best certificates of any standard recognized by meet the requirements. GFSI. The project was driven product differentiation in Basic level (30% compliance to the competitive food markets through organic standards) - requires implementation of laws certification by providing support to Armenian and regulations adopted in the country of organic herbal and fruit juice producers through origin (in our case Republic of Armenia), ECOGLOBE, the only company in Armenia certified sanitary rules and regulations of specific to issue organic certification. branches. Medium Level - mandatory implementation The eight herbal producers met their organic and compliance with the requirements of certification requirements and received approval. HACCP. Upon successful introduction and Certification allows these firms to gain entry to new after having a positive audit report, the markets and increases local employment and rural supplier can be promoted to the next level. incomes. The world received its first taste of The third level is an advanced one, which Armenia’s organic products at the BioFach organic implies transition to a quality control system in world trade fair in Nuremberg, Germany. EDMC accordance with one of the GFSI recognized supported the participation of herbal organic standards (BRC, Dutch HACCP, Global producers and EcoGlobe to exhibit their products Standard Version 5, FSSC 22000 etc.). At this at BioFach 2013 and 2014. Seven new contracts level, requirements need to be met on were signed for increased sales and exports to the document management and implementation of corrective actions on audit results. EU, South Africa, Russia, Ukraine, Georgia, and the

United States. An introductory session on Global Food Security Initiative standards (GFSI) for food processing companies was organized on October 26, 2012, with participation by canneries and dried fruit processing companies. Next steps included working with the producers on introducing Level I of the GFSI standard using the trained BDS companies. The goal was for the companies to reach Level 3, which includes certification for one of the possible food safety standards: HACCP, IFS, ISO 22000, and BRC.

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Food Processing Sector Level Support Together with IFC, the project organized a ToT on Global Food Safety Initiative (GFSI) on October 23-25, 2012, for 20 participants from eight BDS companies. Enhancing the capacity of BDS companies EDMC goal was using the local business development services for food processors on compiling international standards and obtaining food safety certification. The twinning of EDMC’s international consultants with local BDS helped to ensure the sustainability of this work. Armenian National Accreditation Body was assisted in implementing management and documentation system according to ISO/IEC 17011 that enables laboratories in Armenia to certify HACCP compliant companies in the food processing value chain. The EDMC expert provided assistance by completing an initial gap assessment and the implementation of initial systems. National Accreditation Body’s management system conformity to ISO/IEC 17011, will provide functional services for a range of different laboratories in Armenia, including those with food testing capabilities, making HACCP certification easier for value chain companies. Food safety improvements need to be reinforced and driven through the availability and diffusion of laboratory analytical practices that are provided by laboratories operated by government agencies. Local provision of such laboratory services gives processors current and very specific food safety related data which will improve the quality and safety of Armenian-produced food. EDMC supported the improvement of laboratory services offered by the Republican Veterinary- Sanitary and Phyto-Sanitary Center for Laboratory Services (SNCO) staff of the State Services for Food Safety (SSFS), in accordance with international standards for food safety control. This support was related to equipment received from FAO that, due to a lack of trained specialists, was not utilized. EDMC’s international consultant provided a two-week training/mentoring to teach the staff how to operate the equipment, allowing them to analyze the food for the pesticide residues determination of aldrin in food with Gas Chromatography (GC) with Electron Capture Detection (ECD) and GC software operation, as well as benzoic acid and antibiotics in food with High Performance Liquid Chromatography (HPLC) with UV-detection and HPLC software operation. As a result of this technology transfer, the laboratory staff knows how to do analysis and prepare samples according to the international standards.

Pesticide Evaluation and Safe Use Action Plan In Armenia, as in other developing countries, there are challenges regarding the use of pesticides. These challenges are derived primarily from a lack of knowledge and lack of safety equipment for use during pesticide applications. In high-value agricultural regions such as the Ararat valley, older persistent organochlorine agrochemicals are still found in the soil, water, and can enter the food production chain. Newer chemicals in use today also present risks. In accordance with 22 CFR 216.3(b), the preparation of a PERSUAP is mandatory for all USAID funded projects and activities which may involve the “procurement or use, or both, of pesticides.” Use is interpreted broadly to include what is used on demo farms as well as which chemicals are discussed or promoted during trainings. EDMC conducted the first-ever Pesticide Evaluation Report and Safe Use Action Plan (PERSUAP) in Armenia. The PERSUAP guides users on the production and use of a state-of-the-art preventive and curative (pesticide) Integrated Pest Management (IPM) Plan. PERSUAP also evaluates the active ingredients in all 449 pesticides currently registered in Armenia for human and environmental impacts. The Safe Use Action Plan, which is very much like an Environmental Mitigation and Monitoring Plan (EMMP), provided a management guide with recommended actions to reduce risks for USAID projects that work in any aspect of the agriculture value chain. This included where and how pesticides are to be used, risks, rotation of pesticides, and recommended

23 mitigation and monitoring measures that can be used to avoid, prevent, and reduce risks to human health and environmental resources. Such risks are present not just with the use of pesticides, but also microbicides and disinfectants (defined as pesticides by USEPA) used for processing crop and livestock products in Armenia. Agriculture projects will need to do IPM and pesticide safety trainings, as well as find ways to get safety equipment to farmers and get them to use it. Strengthening the Phytosanitary System To strengthen the phytosanitary system in Armenia for ensuring phytosanitary safety of import and export of plants and plant products EDMC invited the international consultant to build the National Plant Protection Organization (NPPO) capacity to conduct PRA using a computer program called CAPRA and to improve cooperation between the NPPO and other authorities and agencies of Armenia. The first one, the PRA training, was conducted for five days from March 18 to 22, 2013; whereas the second one was composed of three workshops: for stakeholders, for the faculty and students of Armenian Agricultural Academy and for the Agricultural Teaching Center students of ICARE (to strengthen the BDS providers capacity). Now the participants has sufficient capacity to use the CAPRA program for conducting PRA and can teach other local experts to ensure the sustainability of this work Promoting Armenian Processed Food in International Market Upon request from the Ministry of Economy, the Armenian Food Processing Sector investment guide was developed to promote the Armenian economy and investment possibilities internationally. This guide was issued as a food processing sector specific supplement to the Armenian Investment Guide developed by EDMC in 2013, providing additional detailed information to foreign investors about the Armenian food processing sector’s products, potential and opportunities. The guide for processed food exporters was developed in a manner to cover all the domestic procedures, as well as the applicable market entry requirements. In order to ensure greater accessibility, the guide will be written in plain language and illustrated, where possible, with process maps, charts, and sample documents. In addition to the guides, interactive process maps were developed to guide the exporter through the whole process starting with preparation for export domestically, including all of the export procedures and thereafter to the entry requirements of the country where the goods will be imported.

Tourism Tourism has been growing gradually in Armenia since 2000. The positive growth of tourism arrivals in Armenia in 2009, while many other destinations saw a decline, is a positive indication of Armenia’s competitiveness. According to Armenia’s NSS and the UNWTO statistical database on Armenia, the tourism inflows are on a non-stop growing trend for the last decade, recording an outstanding average annual growth rate (CAGR) of 11,4% from 2008 to 2013 in the volume of incoming tourists. 2009 2010 2011 2012 2013 Incoming tourists 575.281 683.979 757.935 843.177 957.240 Outgoing tourists 509.643 613.770 714.953 806.905 906.154 Domestic tourists 435.674 456.432 489.419 514.771 669.540 Export of tourism services 366,4 445,5 473,3 473,9 470,0 (USD million) Import of tourism services 306,7 352,5 415.0 416,8 420,0 (USD million) Source: NSS and UNWTO Tourism Barometer. 24

Armenia’s tourism industry is at the center of Government and donor attention with heavy emphasis on infrastructure and promotion. The main players in the public sector are Ministry of Economy (MoE) and National Competitiveness Foundation of Armenia (NCFA). Armenia attracts people with its sense of adventure and history. Although there is a shortage of resources, Armenia has been investing in new hotels to increase tourism. Outdoor activities and scenery seem to be the primary attractions. There are many steps still to be taken across Armenia’s tourism and hospitality industries. These include workforce development, education and training, marketing and promotion, legislation and policy reform, product development and business capacity. The Armenian Diaspora has great potential for the development of tourism in Armenia and a large number of tourists are from countries where there is an Armenian Diaspora community. 95 percent of our compatriots have never been to Armenia, and taking into account the fact that their number twice exceeds the number of local residents, there is great potential for the development of tourism (according to the Prime Minister). The main objective of the tourism value chain development activities was to upgrade service quality by providing professional development opportunities for management and front-line staff of all the components, such as hotels, restaurants and other tourism service vendors as well as guides. The portfolio of tourism-related projects undertaken by EDMC was impressive and provides a solid foundation moving forward to the formulation and implementation of a sustainable national tourism development strategy. From a position where tourism interventions were piecemeal and fragmented, the body of work so far completed provides the base of a pragmatic national strategy through research and pilot projects so far completed.  A review of tourism assets.  A review of the legal and administrative framework for tourism and recommendations for its future form.  A review of the statistics and research used in tourism planning and marketing and possible recommendations as to their improvement.  A review of the competitiveness of the tourism product, particularly in respect of competing destinations.  A clear understanding of the current tourism market and its segmentation and the preparation of tourist arrival forecasts based on market segmentation and the matching of the product offer to market segments.  A marketing plan based upon the available product offer as well as current national and international trends.  Web presence and Branding.  An economic assessment of the impacts of tourism development.  An assessment of tourism infrastructure, including the accommodation sector, transport capacities and utilities supply and recommendations as to their improvement.  An assessment of the human resource base of the sector and of the current training arrangements and curricula, together with and assessment of future needs.  The preparation of a Physical Plan, identifying areas of zones for tourism development, priority projects, infrastructure provision and development guidelines.

 The review and preparation of investment conditions and incentives.  The preparation of a 5-Year Action Plan to implement the finding of the master plan. 25

Improving Tourism Statistics for Future Planning and Marketing

During the first year, EDMC identified the main I constrains through extensive consultations with sector stakeholders and initiated the Border Visitor Survey that was designed in collaboration with EDMC, GIZ, and NCFA. Armenia’s second Visitor Survey was completed at the end of the second year. Survey interviews took place at four land borders and two airports, seven days a month for 12 months starting from January 2013. This data on where tourists come from and duration of their stays in Armenia shaped the GOAM’s new tourism strategy review. It was found that the number of arrivals into the country has soared by 14% since 2009, 70% of whom are of Armenians ancestry. This in itself is extremely important for the country, particularly when coupled with extremely high levels of satisfaction, intention to repeat (98%), and recommend to others (96%). Out of the whole international tourism demand, two main types of visitors to Armenia were analyzed in depth: those from the Diaspora and core international tourists without Armenian ancestry. According to the analysis, about 84% of visitors to Armenia come from former USSR countries. Over half of the incoming travelers visit friends and family and prefer to lodge with relatives instead of staying at non- collective accommodations, with an average stay of 17.4 days. Furthermore, less than 3% utilize or come with packaged tours.

The final report, along with a comprehensive presentation and analysis, was delivered to the stakeholders’ and wider tourism sector. The Visitor Survey 2013 has since been published and was available to the general public. Promoting Regional and Cross-Border Tourism EDMC supported the Black Sea Silk Road Corridor (BSSRC) Project, which fosters cross-border and cultural cooperation and economic development in 100 communities in the four countries of the Black Sea Basin: Greece, Turkey, Georgia and Armenia. 43 Armenian cultural, historical and natural sites were marked with directional signs, information panels, trail markers, and walking tour plaques, which provides multi-lingual content about the site. Exactly 389 informational signs were installed across Armenia. In the same manner, a web portal was created to feature the virtual version of the trail, along with five smart-phone applications 26 with social media integration. This online directory provides an inclusive list of tourism service providers. In addition, EDMC, in close coordination with MoE and NCFA initiated, the development of detailed guidelines for tourism signposting nation-wide, including along the Black Sea Silk Road Corridor. For the first time in Armenia, this provided for the implementation of unified design, size, placement, and color scheme for each of the tourism signs. As a result, tourists will be able to easily find their way to more attractions when traveling in the countryside EDMC undertook extensive field work throughout Armenia and identified the existing and potential assets of the tourism sector. Particularly, through individual Marz assessments EDMC produced both an assessment of existing and potential tourism assets as well as a detailed guide books setting out the resources and attractions of each Marz. The work completed on the Marzes to date, and in its present form, was sufficiently detailed to incorporate into the preparation of a national strategy. At the same time, many of the potential products identified were carried forward into a detailed product development task.

Destination Capacity building inventory and Production of for destination assessment Promotional service providers materials

Introduction Development of Sales of new tour of identified new tour packages products to tour packages to with new international tour operators products operators

While tour product inventories were completed for four Marzes within the first two years of the project, EDMC initiated an enhancement of its efforts and implemented the conduction of inventories for the remaining six Marzes, with tourism product development. In addition, several management plans and assessments were prepared for regional tourism development, including: 1. Noravank Gorge, Areni Village and Areni Cave 1 site Management plan and detailed architecture design 2. Site Management Plans and detailed architecture design for the Tatev, Shinuhayr and Tandzatap heritage villages 3. Ararat Marz Assessment, Khor Virap Site Management Plans and detailed architecture design 4. Kotayk Marz Assessment and Garni/Geghard site management plans and detailed architectural plan 5. Mozrov Cave development preliminary plan 6. Sevan Outline Promotional Plan And Design Proposals 7. Outline Assessment of Tourism Development Opportunities in Akhtala and Alaverdi Mining Site as a potential tourism destination 8. Selim Caravanserai Outline Site Management Plan and Design Proposals 27

EDMC also carried out training sessions for 51 museum guides from 27 museums in Lori, Kotayk and Shirak Marzes, as well as in Yerevan. This was a complementary task to earlier support for the Armenian Guides Guild to take part in the World Federation of Tourist Guides Associations (WFTGA) bi-annual conference in Macau, China, where it made a bid for Armenia to be the host country for a WFTGA International Training Center. AGG was successful in winning the bid and the school was established in Armenia. This activity was directed to set standards of excellence in Museum Guiding Education according to the WFTGA agenda and standards. There was a significant gap in the capacity of people between the regions and in Yerevan to develop or become engaged in the tourism industry. Rural areas were dramatically influenced by accommodating tourists: this brings people from different cultural backgrounds into a previously isolated community and can help create a fresh dynamic, encouraging more proactive community engagement and entrepreneurial energy. This process could in turn serve as a catalyst for developing new ideas about attracting more clients for local businesses, such as restaurants, B&Bs, small hotels and local sites in general. However, tour products were not usually well elaborated and presented to wholesalers, both locally and internationally. This was a disadvantage of an industry that traditionally has depended heavily on internal infrastructure development to spur product development. Quality of services was also an issue, which needs to be strategically addressed to enhance industry performance. Rural festivals are known to help provide better EDMC exceeded all targets for Sales and quality, higher standard products, as well as Employment growth in Tourism value chain incentives for tour packages, bringing tourism opportunities to areas normally left Average annual expansion of sales in Tourism undiscovered by the average traveler. When value chain above the industry average organized with all stakeholders, a festival is more than a business activity with a bottom line;

30% 27% rather, it is a tool to develop a community and 25% its economy. EDMC supported the Tatev Revival Foundation (TRF) and Homeland 20% 16.5% Handicraft Development Initiative Foundation 15% 10% 10% 11% (HDIF) in two festivals this quarter. With their 10% unique community involvement methods, these 5% festivals and their implementers facilitated a 0% Year 1 Year 2 Year 3 change in the local attitudes and promoted entrepreneurship.

Average annual expansion of employment in TRF and HDIF together implemented Sheep EDMC assisted firms in Tourism value chain Shearing 2014, a community-based festival in the Tatev area. This all-day event took place just 30% 25% outside of Halidzor, the village of about 500 25% residents where the outer station for the Wings 20% of Tatev, the longest non-stop double track T 15% 10% cable car in the world, is located. This festival, 7% a 10% supported by EDMC, highlighted the tourism 5% 1% 2% l 0% offerings in and around Tatev valley aside frome n Year 1 Year 2 Year 3 the monastery and cable car, boosting the local economy with new streams of revenue andt e Target Actual increasing the local communities’ capacities. d m u s 28i c i a n s

HDIF implemented the first annual “Taraz” (classic Armenian clothing) Festival in the old village of Arpeni. This festival presented traditional Armenian attire and accessories to local and international visitors alike. Located on a scenic flat plain between Old Arpeni and New Arpeni, the festival was in a perfect site to display the crossroads between Armenia’s past and future. Berd Bears, Talin Dolls, utensils, mugs, ceramics and gifts of all types were dressed in the Armenian traditional attire, from regions around ancient and modern-day Armenia. In addition to an array of activities and performances that entertained the visiting tourists, these festivals provided educational demonstrations on the local cultures. The festivals included demonstrations by local handicraft artisans, carpet weavers and knitting designers who enjoyed sharing their crafts. Cooks from the local communities prepared and sold area specific cuisine and products to visitors. The festivals also included handicraft markets and food courts where local merchants and artisans from surrounding towns and villages sold a wide spectrum of products. In order to develop more tourism services and better products EDMC supported other traditional festivals such as “Karpet” festival in Dilijan, the annual “Food and Cuisine Festival” in Akhtala, Lory Marz and “Dolma Festival” in Armavir Marz at the Sardarapat Monument area, Arts and Crats Festival in Gyumri. EDMC, in close cooperation with TBS (www.armhotels.am), assists rural areas’ accommodation providers to better promote themselves and increase sales through the use of new technologies and systems. New Hotel Management System (HMS) software was installed in 30 hotels and B&Bs. As a part of the installation, staff members in partner hotel were trained to use the software. Upon completion of the project, “TBS” CJSC signed a contract with these hotels to act as a commission based service provider based on bookings. By installing the HMS in rural hotels and B&Bs, the industry expanded the sale of hotel rooms and other services in rural areas by contributing to invaluable marketing and sales exposure for the establishments in order to stimulate future growth. Furthermore, as part of the regional development projects, these B&Bs were introduced to Tour Operators on familiarization trips in order to build lasting working relationships for future cooperation. These efforts are already yield results. The supported hotels experienced an increase of about 20% in sales since being featured on the Armhotels.am website.

Promoting Armenia in Target Markets A Tourism Marketing Strategy and Action Plan were developed at the request of the Prime Minister and NCFA. The strategy and the action plan are instruments for the international promotion of Armenia’s tourism value chain in the next three years. NCFA, particularly the newly structured National Tourism Organization (NTO), will be the residency for the execution of the strategy and action plans. EDMC also developed Tourism branding strategy for Armenia, which was mainly based on the overall tourism marketing strategy. The national tourism portal, which was developed by a local IT company through EDMC support, incorporated the tourist attraction concept and the outreach approach, as well as look and functionality based on the strategic, yet actionable recommendations outlined in the Marketing and Branding strategies. EDMC assisted the Armenian General Benevolent Union (AGBU) in preparing a business plan that will help promote Armenia globally. This would help AGBU to leverage its overseas physical network of offices to promote Armenia as an attractive tourism destination and a probable prospective for investors, wherein they will finance and operate the network themselves. A practical objective was to introduce the country to foreign parties through information centers that provide all the information on requires to visit and/or invest in Armenia as a whole.

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As an important endeavor to put Armenia on the world tourism map, EDMC provided support for participation in the annual Borsa Mediterranea del Turismo Archeologico (BMTA) archeological tourism exhibition in Paestum, Italy, on 15-18 November 2012. This was a joint effort with the Ministry of Culture and NCFA, and with support from the Armenian Embassy in Italy. Armenia’s participation at BMTA 2012 marked the occasion of being honored as the “host country”, an honor awarded to the Armenian participants of the BMTA in 2010. The EDMC international consultant organized marketing and PR activities to promote Armenia as a tourism destination to Italian tour operators, archaeological associations, clubs, and hospitality sector firms and media representatives. As a result of EDMC support, Armenia was featured in thirteen articles and reports published and broadcast by the Italian media either about Armenia’s participation at BMTA or generally promoting Armenia as a tourism destination, emphasizing the names of the six private sector companies participating at the exhibition. In addition, the project provided promotional materials presenting Armenian archeology as a tour product in rural areas. In addition, EDMC promoted Armenian Tourism Product in European countries assisting NCFA and ten local tour operators to participate in a major European travel exhibition in Moscow – MITT International Exhibition, and organizing a follow up familiarization trip for 60 press representatives and tour operators from France. EDMC supported the Ministry of Economy and NCFA to host a first-time UNWTO international conference in Armenia. The topic of the conference was “Universal Values and Cultural Diversity in the 21st Century: How Can Tourism Make a Difference?” The presentation gave an overview of the hospitality industry of Armenia and a comparative analysis of hospitality related opportunities and constraints with those in competitor countries. The Conference officially ended with the signing of the Yerevan Declaration by GOAM and UNWTO, inspired by the Global Code of Ethics for Tourism. This conference provided an excellent chance to discuss the global issues facing the tourism industry, and at the same time put Armenia on the world tourism map through the UNWTO events calendar. Supporting the GOAM to Improve the Sector’s Policy Armenia’s Tourism Development Strategy was reviewed and updated by EDMC. The updated strategy is an instrument for the international promotion of Armenia’s tourism value chain in the next three years. The newly structured NTO, will be the residency for the execution of the strategy and action plan. EDMC drafted a document advising NCFA on the restructuring of its Tourism Department into NTO to improve the legal framework and support the development of tourism in Armenia and strengthening institutional structures related to the tourism sector. The key function of the NTO will be to maximize international tourism visits to the country, thereby generating economic and social benefits. The document proposed that Tourism Armenia: be established as an independent entity under the oversight of an appointed authorized body; is composed of a chief executive and three functional divisions; develop job descriptions for the management and the technical staff; develop a three-year action plan and program for the NTO; and, budget estimates for the establishment and operation of the NTO. The newly structured NTO and the fully functional PPP for regional tourism development in Tatev are precursors to the World Bank’s $50 million Tourism Economy and Infrastructure Development project.

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Information Technology Armenia has a well-educated workforce and has traditionally served as a major center for R&D and related information technology- activities within CIS markets. It specialized in a number of technology intensive segments, including processors, semi-conductors, and software and featured a network of specialized academic and training institutions. Today IT is an important engine of growth for the Armenian economy, a locomotive of development that links Armenia with innovators and multinational corporations. Armenia’s Information technology industry recorded a number of achievements, pushing through the economic downturn to become a sector with dynamic growth trends that is competitive internationally. There are 380 ICT companies operating in Armenia growing at an average annual rate of 20%. While 90% of these companies are Yerevan-based, the number of companies operating in other regions of Armenia is growing due to the development of educational and scientific infrastructure developed by regional development programs. The major challenge facing the IT sector in Armenia is to effectively “upscale” the value-added services provided by Armenian IT companies. This means transitioning over time from a focus on outsourcing low value ICT services to providing cutting edge high value IT products and services. DRC analysis performed in the beginning of the project and the ICT Survey implemented jointly with EIF defined specific barriers hampering growth of the IT sector, such as: inadequate number of continuing education programs and R&D / high-tech laboratories, insufficient focus on development of marketing and financial planning, marketing, management skills that facilitate better positioning of local companies on the global ICT market, and inadequate development of innovation and export focused incubators. EDMC addressed those challenges by supporting Armenia’s IT sector to enhance competitiveness and productivity through introduction of new technologies and innovation; development of managerial skills and enhancement of quality management systems; achievement of greater cost- efficiency; helping companies expand existing and reach new or niche markets. EDMC overall objective was to increase the growth rate of the IT sector through targeted assistance to companies that emphasizes innovation, product and market development, skills enhancement, better access to finance, and strengthening IT entrepreneurship ecosystem & business environment improvement. As a result, EDMC support in this sector was aimed at promoting firms that were prepared to make changes in their operations by delivering targeted assistance that emphasized innovation/commercialization, market development, skills enhancement, better access to finance, and entrepreneurship. There was an intensive focus on working with firms that sought to differentiate themselves through proprietary product development rather than business outsourcing.

Promoting Armenian IT products and Services in Regional and International Markets EDMC supported more than 200 IT companies. EDMC assisted Armenian IT companies 1) with presenting and promoting their products and services in international markets, including participation at the largest annual and biannual IT-related exhibitions, tradeshows and congresses; 2) with the creation of start-ups; 3) with the generation of new ideas and products; and 4) with enhancement of skills of sector specialists. In particular, EDMC supported the Armenian Government and Viasphere Technopark to organize the fifth ArmTech Congress at Stanford University. Participants included over 200 representatives from government, academia, and IT/High-Tech industry professionals. Three MOUs were signed (GOAM - Intel Corporation; GOAM - “Corporacion America”; GOAM - Granatus Early VC Fund). In addition, the official

31 opening of the Armenian IT/High Tech Representative Office at Plug & Play Tech Center, Silicon Valley, California took place. The seventh Digitec Expo, titled Your Digital EDMC exceeded targets for Sales, Future, was organized jointly by EDMC and UITE Export and Employment growth in and took place on October 5-7, 2012. As an IT value chain international technological event, the Expo brought together the representatives of 120 Average annual expansion of sales in IT value companies from Armenia, South Korea, chains above the industry average Singapore, Georgia, Germany, Russia, and Italy to

exhibit the latest high-tech solutions and to 25% 19.4% promote business linkages. EDMC created an 20% 15% opportunity for ten promising local start-ups and 15% 10% three associations to present their software 10% 7% solutions to promote dialog between the IT and 5% 5% other sectors. Overall, the number of visitors to 0% 0% the 2012 Expo was extraordinary high (24,000) Year 1 Year 2 Year 3 (Q1, Q2) when compared with last year’s attendance

(17,000). The success of the Annual Expo Percentage change of total exports in IT demonstrated that technological development in Processing industry Armenia could be the engine to promote the

40% development of other sectors of the economy. 33% 30% EDMC also supported Armenian IT companies 20% 20% and associations to participate in CeBIT 2013 – The World’s Largest IT Tradeshow. Project 10% 3% 3% 5% support enabled one Armenian company to 0% 0% facilitate a pending technology partnership Year 1 Year 2 Year 3 (Q1, Q2) agreement with a large German optics

manufacturer. Also this support helped two Average annual expansion of employment in other Armenian high tech companies participate EDMC assisted firms in IT value chains in a public ICT project (i-City) in Poland. In 2014

50% EDMC worked with UITE, CBI - Specialized 42% Agency of The Netherlands Foreign Affairs 40% Ministry, and anchor companies on a joint 30% 22% program to support selected companies in 20% efforts to export to EU. In particular, EDMC 8% 10% 0% 1% 1% provided an advanced and customized range of 0% technical assistance and consulting to these Year 1 Year 2 Year 3 (Q1, Q2) companies and supported their participation at Target Actual CeBIT 2014.

EDMC supported the participation of Note: IT component ended in March, 2014. For associations and IT companies in other well- that reason the Year 3 Target and Actual numbers known international and domestic IT sector are covering only the initial six months of Year 3 promotion events (including in follow-up (first and second quarters). events), such as: Hannover Messe 2012, ArmTech 2013, GITI 2012 and 2013 in Georgia, Digitec Expos 2013, Digitec Business Forums 2012 and 2013, ICT leaders Meetings in 2012.

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Encouraging Innovations and Introducing New Technologies EDMC focused on developing technological entrepreneurship, innovation, and startups in Armenia. These activities entailed the creation and development of an innovation-focused system for bringing users and suppliers of innovation together to stimulate entrepreneurship. EDMC, in partnership with representatives from UITE, EIF, ATS, SME DNS, mLAb, and MIC, prepared the Armenian’s first Startup Catalog, as well as a blueprint on Creation of a Start-up Ecosystem. The catalog presented a comprehensive list of the successful technology-based or other sustainable companies with innovative projects in Armenia. The catalog and the blueprint can serve as the basis for the development of a start-up ecosystem over the next few years. This development was strengthened by support for the Armenian HT Executive Network and the added educational capacity of the Armenian National Engineering Laboratory (ANEL) and technology transfer mechanisms. EDMC made joint efforts with the Association of Technology Startups and the American University of Armenia to bring the internationally recognized StartUp Cup to Armenia. The StartUp Cup is a global network of locally driven business model competitions open to any type of business idea. It can be replicated in any community and is a proven model to create viable businesses, grow jobs, and enhance entrepreneurial ecosystems. As a result, a series of events were organized in the period of September-November, 2012. The Armenia StartUp Cup was supported by EIF, UITE, CEED and other local organizations. EDMC created a strong ecosystem and collaborative environment between internationally recognized StartUp Cup, IT associations and companies that will deliver sustained growth. EDMC supported the Imagine Cup Armenia 2013 contest with the goal of nurturing start-up businesses, promoting HT solutions for other industries, and augmenting Armenia’s HT image internationally. Further, EDMC supported the winning team, Lionsharp Solutions, to present their Voiceboard project at the worldwide final in Saint Petersburg, Russia in July. Voiceboard is a Kinect-based voice recognition board that facilitates brainstorming, creative interaction, and team discussions through voice and gesture commands. Eventually, Lionsharp Solutions successfully secured their first round of acceleration investment of $25,000 that will enable this promising firm to continue developing their product and secure financing.

Organized jointly with the Association of Technology Startups, the ATS Awards 2012 was Armenia’s first dedicated event to reward excellence in the IT start-up community. The initiative sought to boost start-ups in Armenia by bringing together participants of various contests and events held during the year, creating an opportunity to network with colleagues and potential investors. As a result, the Association and participating companies elaborated a joint agenda of developing a roadmap in a coordinated fashion for promoting technological entrepreneurship and startup creation in Armenia. EDMC supported a number of start-up competitions, as well as coached and trained participant teams and individuals, with the objective to encourage creativity and introduce new products into the market. Overall, the list of EDMC assisted events include: Startup Cup 2012, Start-up Cup Final 2013 & Global Entrepreneurship Week 2013; Imagine Cup 2012, 2013, Startup Boot Camp 2012, ProductCamp Yerevan 2013, and the World Start-up Cup Final 2014 in Yerevan. Facilitating IT “Made In Armenia” IT in Armenia is relatively strong and is growing rapidly as it is driven by robust domestic and international demand. Domestic consumption of IT products and services has increased to 40% over recent years as customers see Armenia as a key source for IT products and services. Some 33

Armenian companies are gradually moving towards their own product development. EDMC supported systemic entrepreneurship and building IT capacity and built the linkages that are needed to sustain the solid growth of this vital sector in Armenia. Through grants program EDMC supported two Start-Ups and one mature organization in the development and promotion of innovative mobile applications for businesses to improve their management and marketing techniques, as well as provide potential investors with comprehensive and up-to-date information on the economic climate in Armenia. Another EDMC grantee - E-Works - developed the Doing Business in Armenia mobile application project, which ensured the development of an up-to-date, innovative and dynamic resource (e- guide) dedicated to information about investing in Armenia, including the business environment, taxation, legislation, customs, labor regulations, and much more. The content of the application IT Firms by Type of Activity was developed by Grant Thornton Armenia. The application was commercialized through the Apple Store. EDMC grantees launched two other notable projects which delivered innovative web solutions to target sector SMEs. Microsoft Innovation Center Armenia developed eagro.am portal, which is a web-based marketplace for agricultural commodities and services, available both online and via the mobile phone. It was aimed at promoting economic development and increasing competitiveness of rural entrepreneurs and food-processing SMEs by creating new marketing opportunities, providing tools for smart farming and offering cost-optimization mechanisms. A Financial Transaction Network (FinTransNet) was developed through another grant project. It was essentially a payment system tailored for Armenian SMEs, which is compatible to receive payments from existing systems, such as Armenian online banking, PayPal, and credit cards. Thanks to EDMC assistance, vendors and service providers in Armenia can receive payments from domestic and foreign customers directly into their bank accounts, FinTransNet accounts and/or directly at their local post Digitec Expo 2013. 34 office. SMEs that did not have a website were able to create free of charge pages on a FinTransNet portal. By supporting the development of three universal templates that were tailored toward the domestic market, EDMC increased the revenue and marketing capacity of local SMEs. The following templates were designed: a Shop App Template, which provides user information on products, pricing, availability and location; a Hotel App Template, which provides information on destinations, lodging options, prices, amenities, photos, and reservations; and a Service App Template, which provides information on and booking for various services, such as dining options at restaurants and cafes. Another EDMC grantee created a mobile solution for businesses to improve local market data. “Leelit” was a new survey tool application for smart phones designed to allow companies to create polls for their target audience and reward respondents. Strengthening Pillars of IT Value Chain EDMC supported the GOAM in developing a Precision Engineering Strategy implementation Action Plan (2012-2105). This work also included a performance tracking system for implementation of the Precision Engineering Sector Strategy, a Performance Monitoring System with M&E indicators, and the basic agreement (Memorandum of Understanding) that was signed between GOAM and sector representatives. EDMC supported the Enterprise Incubator Foundation (EIF) in redesigning the ICT Industry Baseline Survey to use as a tool for investment promotion in IT. EDMC experts, in collaboration with EIF, developed and designed the survey procedures for the collection and processing of the baseline data, prepared questionnaires and formulated the survey methodology for two sub- sectors: software and services, and Internet services and telecommunications. With this new methodology, the 2012 survey highlighted the situation in the ICT sector by collecting company level data from ICT companies that were operating in Armenia. EDMC assisted iDram in becoming Payment Card Industry Data Security Standard (PCI DSS) certified. The grantee was Armenia’s biggest and most prominent electronic payment service provider. Meeting this standard ensured that the grantee had a framework for developing a robust payment card data security process that includes prevention, detection and appropriate reaction to security incidents. Successfully implemented, the PCI DSS certification increased confidence in iDram’s systems by domestic and international consumers and partners as the system meets some of the most secure transmission requirements, mitigating the chances of breach and fraud. EDMC worked closely with educational and entrepreneurship centers, universities and specialized institutes that were involved in IT workforce and start-up development. EDMC delivered more than ten training projects on programming and IT skills development with GITC and GTC, Microsoft Innovation Center, AUA, and Linux Learning Center that led to increased employment in Yerevan and in regions. EDMC delivered soft skill trainings for SMEs and adopted budget modeling tools for IT companies. In addition, EDMC empowered IT firms to employ greater use of BDS services and strengthen the capacity of BDS providers. Particularly, a number of anchor firms were assisted by EDMC and BDS providers in the development of budget modeling skills and improved use of financial analytical tools. EDMC implemented joint activities such as trainings and internship programs with Macadamian AR, Instigate, e-Works, IT Academy and 3DMU that resulted in new jobs. In parallel, EDMC provided sustained assistance to several ICT firms to ensure their presence in Gyumri and other marzes in order to enhance HT diffusion as well as to increase HT career options to other regions of Armenia. The cooperation with Instigate and e-Works resulted in the opening of the Instigate branch in Goris and e-Works branch in Gyumri.

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WORKFORCE AND ENTREPRENEURSHIP DEVELOPMENT

The core mission of the WED component was to improve the ability of the vocational education and training system in Armenia to respond to priority labor market training needs. EDMC enhanced the quality and competitiveness of Armenia’s workforce, promote entrepreneurship, to define and effectively address the most critical labor supply shortfalls in key occupational skill niches, which were limiting enterprise competitiveness in our four targeted value chains. The main objectives were 1) development of new curriculums, and support training centers for private and public universities and TVETs institutions to provide demand driven training; 2) establishment of entrepreneurship programs and/or startups accelerator within existing institutions to promote innovation, new ventures and job creation in EDMC’s four targeted value chains; and 3) promotion of enhanced cooperation between the private sector and educational institutions primarily through implementation of student internships and need-based Quick Start training programs on a cost-sharing basis. The strategy focused on three major strategic directions to improve the quality and competitiveness of Armenia’s workforce, promote entrepreneurship at the undergraduate level, define and effectively address the most critical labor supply shortfalls in key occupational skill niches limiting enterprise competitiveness in our four value chains, and improve the responsiveness of the vocational education and training systems to priority labor market training needs.

VC COMPANIES Workforce: knowledge, skills and competence

DEMAND SUPPLY

EDUCATIONAL INSTITUTIONS New curricula trainings, career events, internships and entrepreneurship

Our focus was on activities that build ties between universities, TVET providers and employers. EDMC helped our partner institutions design and implement new market driven curriculums as well as implement innovative internship programs through grants, career events and tracer surveys to measure and increase the employability of students. This augmented by the implementation of specific skill-sets development and Quick Start training programs, which included working with educational and training institutions, industry associations and businesses to identify specific needs and develop and deliver training programs leading to employment. A third direction was to promote VC competitiveness and new ventures creation through entrepreneurship development programs targeting youth and women who were students, and establishing a start-up accelerator as well as working with the CEED network to leverage their

36 successful entrepreneurs to share best practices and lessons learned with students. EDMC implemented these three directions within the project through:

 Collaboration between EDMC and a select number of partner universities to establish entrepreneurship programs and implement entrepreneurship trainings courses, using best practices from CEED’s programs;  On-going dialogue with private sector firms and industry associations in selected value chains, in cooperation with VC component to identify and address VC companies’ workforce related issues and needs;  Promotion of discussion platforms in major specialized conferences (ArmTech, CTS, Armenian Educational System etc.) to promote enhanced cooperation and the exchange of best practices between VC There are 23 state and 39 private universities companies and educational and training with about 111,000 students in Armenia. institutions. Eight of these universities are international including the American University of Armenia EDMC provided professional and skills (AUA), French University, European University development training to more than 2,200 and several Russian universities. specialists leading to their employment in the four The general quality of education in Armenia value chains. Thirty-eight education institutions and continues to improve. Strong positive trends vocational training providers were supported with are taking shape due to international contacts curricula development, capacity building and Quick and emerging collaboration between Start training, career fairs, internships and other universities and the private sector (particularly technical assistance. Through EDMC support, in the IT sector), emergence of high quality more than 12 enterprises introduced innovative secondary schools and educational centers management methods and processes and (Ayb school, international baccalaureate established new branches outside of Yerevan. program at Quant school, TUMO center for creative technologies, ANEL, etc.). I the beginning of project EDMC conducted a survey to identify cooperation modalities (or informational “bridging” mechanisms) between businesses and educational institutions. Fifty organizations were surveyed, including nine VETs, 12 colleges, 15 universities, 10 chambers and associations, and four experts. The survey report titled, “Report on Building Bridges to Match Demand for and Supply of Competitive Workforce” was finalized and widely disseminated.

New Curricula for Educational Institutions IPhone and Android applications programming curricula developed for GITC, which trained instructors for the newly established mobile programming faculty, improving the quality of student education and increasing employability. The food processing curriculum was reviewed and assessed for the Armenian National Agrarian University. In cooperation with the USDA Legacy institution, ICARE Foundation, EDMC’s

37 recommended changes in the curriculum, and an action plan were adopted for establishing further activities, including new courses. A new hospitality management curriculum was developed for the Russian Armenian Slavonic University, Armenian State Economic University, European Regional Academy, Tourism Institute, State Linguistic University and American University of Armenia (AUA) to provide modern education and training. Four seminars for approximately 140 students and one workshop for 20 faculty professors of Tourism and Hospitality departments were conducted. An entrepreneurship training curriculum (a 10 week experiential learning course) was developed and two training-of-trainers (ToTs) courses were conducted in Gyumri and Yerevan for 32 lecturers and specialists. Participants came from 11 educational institutions and four entrepreneurship related organizations located in Tavush, Lori, Vayots Dzor, and Shirak. The ripple effect of these ToT sessions impact hundreds of students nationwide. Quick Start Training EDMC conducted Quick Start (QS) methodology trainings in Jermuk, Yerevan and Dilijan for the three groups including 95 participants from 40 VET institutions, colleges, universities BDSs, NGOs and businesses from the EDMC target sectors. This included introduction to the Quick Start methodology, practice conducting job analysis, and preparing a training program and discussion of Quick Start’s usefulness, advantages and disadvantages, and opportunities for implementation. Two pilot QS programs were implemented, providing skills and jobs for 90 unemployed youth and women with tourism and food processing companies nation-wide. EDMC provided a Quick Start training grant to the Gyumri Information Technologies Center (GITC). QS is a methodology for focused workforce training, developed by the United States Government. During this nine-month initiative, GITC addressed the technical needs of target IT companies. The long term goal was to develop a culture of QS methodology within the Armenian IT sector by institutionalizing its use by businesses as an effective workforce development tool for continuous training of specialists the ICT sector needs. Based upon a job analysis completed by an expert in the same field and a QS facilitator, a curriculum and training program was created specifically for each job opening. About 100 people were trained in technologies required by the top ten IT industry employers in Armenia. GITC anticipates 70% of the trainees will obtain permanent jobs at participating IT companies. Empowering EDMC Value Chains

 Intensive ITC trainings for 12 students were implemented jointly with Macadamian IT Company (a women owned firm). All 12 students were offered jobs at the end of this training.  With EDMC support Instigate IT company established a branch in Goris. 22 ICT students from Goris State University were trained in systems engineering and parallel system design. Of these, 17 students (77%) were hired by Instigate to work as permanent staff and/or interns.  Twenty-four specialists trained in Linux LPI, Java, and C++ programming by Linux Learning Center LLC (IT Academy), assisted by EDMC. Most of those trained were employed.  E-Works ICT Company’s branch establishment in Gyumri was supported by WED in this relocation to the region. Training for 10 IT specialists from Gyumri was conducted jointly with EDMC to enhance the qualifications of the selected candidates to work as interns before being employed full time by E-Works.

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 Three IT skills training delivered as part of the joint EDMC and AUA program. The Web Design group had 18 trainees, which includes participants from Synopsis Armenia, Ameriabank, Bridge of Hope NGO and others and the Android group had 10 trainees including participants from Instigate LLC, Unisoft Development, Unicomp CJSC, Universal Communications an Essential Solutions. These trainings will now continue with full private sector funding.  Demand driven training courses for 26 food processing technologists from 20 canneries and dried fruit and vegetable producers were conducted, in cooperation with the ICARE Foundation, to increase firm competitiveness by improving their compliance with international certification requirements (HACCP).  Towards the end of the project the Armenia’s IT workforce assessment was conducted to assess the efficiency, usefulness and quality of the existing linkages between workforce supply and demand. This provided USAID a granular view of the sector to identify the potential need for future interventions in the software workforce development using evidence-based, quantitative and qualitative disaggregated data.

Promoting Innovative Internship Programs Four internship projects were implemented, creating links between educational institutions and businesses in Information Technology, Tourism and Food Processing sectors. This provided students with relevant skills development through on-the-job training and mentors. As a result, more than 85 students representing 11 different universities interned at VC companies, acquired practical skills and increased their employability. Upon completion of these internships, most were employed. Assisting Career Development

 EDMC trained private employment services and university career centers in communication, presentation and sales skills for more effective interaction with employers and job seekers; provided recommendations on improving web-based job matching services and provide best practices review and standards for employers and job seekers services as well as improved the services and performance of Private Employment Service Providers and university career centers, enabling them to identify and refer best qualified applicants to employers.

 EDMC trained and guided the European Regional Academy (ERA) in Armenia to conduct its first career fair for Academy students, graduates, and alumni, During the fair around 30 employers, 10 career guidance, educational and employment organizations, as well as an estimated 1000 students participated in the event. Companies were from various sectors of the economy, including and not limited to banking, telecommunications, information technologies, tourism, pharmaceutical, insurance, retail and media. Over five percent of participants were offered internship and employment positions by the companies.

 Career orientation days were conducted by the Medicine Producers and Importers Union, in cooperation with EDMC, for 250 students of the pharmaceuticals departments from seven educational institutions. In addition, a summer school was held for 35 high performing students consisting of a series of learning sessions and site visits. Upon completion, the students received certificates recognized by the Armenian Ministry of Health.

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 The “Entrepreneurship as a Career” program was implemented for 22 students at the National Agrarian University, encouraging students to create jobs for themselves, instead of merely searching to work with others.

 Career fair were organized for four tourism education institutions at the Armenian Association of Travel Agents’ annual Caucasus Travel Show (CTS). More than 500 students participated.

 EDMC provided intellectual content and financial support for research on economics presented by more than 35 scholars and graduate students at Yerevan State University and the American University of Armenia. The meeting was attended by more than 200 participants, including high level representatives from the Armenian Government, scholars and researchers from Georgia, the United States, the Czech Republic, Germany, Italy, Lebanon and other countries.

 In partnership with UNDP Armenia, EDMC organized a roundtable discussion on private sector contribution to the qualified workforce development in Armenia, with the main focus on youth potential. The main objective of the roundtable was to discuss the statistical evidence and policy options that could bring long lasting positive effects on youth employment in Armenia. During the roundtable EDMC collected proposals and activities aimed at promoting youth (especially women) employability. The results were used for designing competitive Student Employability and Internships RFA soliciting programs from industry associations, education institutions, career centers and private employment services providers.

Center for Entrepreneurship and Executive Development (CEED)

EDMC brought CEED to Armenia as an institutional force and core partner in entrepreneurship training and mentoring. CEED Armenia was part of the EDMC WED component and supports entrepreneurs by providing the know-how and networks they need to accelerate the growth of their businesses. CEED Armenia registered as a local foundation and will continue its operation after EDMC. Over the course of three years implemented a range of programs to help entrepreneurs and their executive teams grow and to promote entrepreneurship in the society. Leveraging its global network, CEED supported entrepreneurs in the following areas:

 Capacity building that is of, by, and for entrepreneurs  Connections to mentors, strategic partners, and potential customers  Community of linked minded entrepreneurs where information and experience is shared  Access to Capital- understanding what type of capital is needed at a particular stage of growth and facilitating access to those resources.

Top Class

CEED Armenia started its operation with the launch of the Top Class program. Top Class is a unique program for entrepreneurs and managers with high growth potential, which provides participants with the following experiences:

 Training sessions led by experts and accomplished business leaders from Armenia, US, Russia, and other parts of the world. The sessions are interactive and provide platform for exchange of

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experience and open discuss ions.

 Local and international B2B meetings and networking events that feature prominent speakers discussing a variety of topics related to entrepreneurship. Participants are invited to participate in international B2B events abroad.

 Mentorship and personalized advice from recognized business leaders and successful entrepreneurs.

 Access to finance and introduction to Small Enterprise Assistance Funds (SEAF) and other potential investors. CEED Global Top Class trainings covered such topics as The Center for Entrepreneurship and Executive servant leadership, entrepreneurial finance, Development (CEED) promotes innovative intellectual property, contract management, entrepreneurship training and linkage programs business negotiations, branding, sales, social across 14 countries. Established in 2005, CEED media for business, strategy development, has reached 21,000 SME owners and change management, conflict resolution, executives through network learning events and human resource management, social provided peer training to over 17,000 entrepreneurship, product development, entrepreneurs on global industry best practices. operations management, public relations, and many others. The participants learned from the experience of such prominent business leaders as Roger Strauch, Co-founder and Chairman of The Roda Group, a seed stage venture capital fund based in Berkeley, California; Ralph Yirikian, General Manager of VivaCell MTS, a leading mobile operator in Armenia; Al Eisaian, Chairman and Co- Founder of IconApps Inc. and a serial entrepreneur from Los Angeles; Stephan Reckie, an angel investor from the US, and many others. A testimony to the benefits received from the program were numerous referrals of Top Class alumni to their friends and colleagues, with CEOs of such leading companies as SFL in the IT sector and Armenia Travel + in the tourism sector, both Top Class alumni, sending their co-founders (co- directors) to participate in subsequent generations of the program. The Top Class was CEED’s flagship program, which was a revenue stream for CEED from the first year of operations. Since the launch in 2012, CEED has carried out 3 generations of the program, with 23-25 registered participants in each generation. CEED intends to continue offering Top Class to Armenian entrepreneurs and managers, continuously improving it by incorporating the

41 feedback from program alumni. Leveraging the successful model of Top Class, CEED will develop and launch similar offerings with a focus on specific functional areas. Introduction of offerings in finance and marketing as well as other business disciplines is planned. Fostering Connections CEED emphasizes the importance of fostering links among entrepreneurs and connecting them to the resources needed to build their businesses. The work toward this goal was carried out both through formal and informal events that facilitate open communication and create opportunities to learn from each other and from more experienced peers. There was a special session within each Top Class program dedicated to company presentations encouraging the participants to start building connections with each other early on. In addition, opportunities were created to hear talks by local and international experts, and to meet with mentors for a discussion of challenges and opportunities. Connections were strengthened through informal events as well. For example, in 2013, one of the Top Class mentors, Roger Strauch, Chairman and Co-founder of the Roda Group, a seed stage venture capital fund based in Berkeley, California, hosted a networking event for the participants of the first two generations of the Participants of the first and second generation of the Top Class program after an Top Class program. The event created an excellent opportunity for the entrepreneurs to establish new contacts, further develop existing relationships, and had an informal conversation with the accomplished business leader and venture capitalist. Mr. Strauch served as a mentor both in the first and in the second generations of the Top Class program. During the event his mentees shared some of the positive results they were able to achieve by following their mentor's advice. The event was also an excellent opportunity to start forging links between the participants of the first and second generations of the program. Promoting Global Links Leveraging the benefits of being connected to the global network of CEED centers, CEED Armenia facilitates participation of Armenian entrepreneurs in various international events. On June 8 – 14, 2013, CEED Global organized an IT focused trip to Israel and Jordan that included entrepreneurs from a large number of countries with CEED presence. The Armenian entrepreneurs were represented by Top Class participants from the first and second generations of the program who were founders and directors of successful IT companies. The goal of the trip was to develop an understanding of the entrepreneurial ecosystem of the two countries and to establish business contacts with entrepreneurs and investors from Israel and Jordan as well as other countries whose representatives participated in the trip. The agenda included a large number of interesting meetings and company visits, creating an opportunity for the participants to hear from Giza Ventures, Jerusalem Venture Partners, IDC Elevator, Garage Geeks, MIT’s Middle East Education through Technology (MEET) Program, Sadara Ventures, Sharakat Fund, Siraj Fund, Fast Forward tech accelerator, Oasis 500 entrepreneurs, and many others. The trip presented abundant learning opportunities and resulted in a large number of new business contacts. On May 20-21, 2013 CEED entrepreneurs from 13 countries met in Zagreb, Croatia to present their companies, meet potential partners and investors and learn from accomplished business leaders. Opportunities to do business in Croatia were presented. In addition, the participants learned about business opportunities in the countries where CEED has presence, including Armenia. CEED Armenia director spoke about the dynamics of the sectors represented by CEED 42 companies, at the table dedicated to Armenia and had follow-up discussions with entrepreneurs that were interested in partnership opportunities. An Armenian tourism company that attended the conference also promoted Armenia in various conversations, presenting it not only as a potential location for business but also as a tourism destination, thereby generating further interest in the country. On March 19-20, 2013 CEED Global in collaboration with partner organizations, organized an international ICT B2B event entitled “IT Bridge CONNECT” with participants from over 10 countries in Izmir, Turkey. The goal of the event was to introduce the Turkish market, develop contacts among entrepreneurs in Turkey, South East Europe and other countries, as well as highlight opportunities for increased trade and investments. Turkey business relationships, explore new markets, create contacts with investors, and hear from inspirational speakers who built internationally recognized companies. On May 24-25, 2012 CEED organized an international conference in Warsaw, Poland, entitled “Growing Up & Out.” The event was a unique opportunity for entrepreneurs from the Central and Eastern Europe to learn about the Polish market, meet potential partners from across the region and present their businesses and products to prominent investors. The event was attended by about 150 entrepreneurs and investors who shared their experiences and discussed new business opportunities. The participants learned about operating in the Polish market during presentations on the Polish business climate, panel discussions with international entrepreneurs who entered Poland, and a visit to the Warsaw Stock Exchange. Opportunities in tourism, information technologies and other sectors in Armenia were discussed. The conference was an excellent opportunity for participants to initiate new business relationships, explore new markets, create contacts with investors, and hear from inspirational speakers who built internationally recognized companies. CEED will also develop offerings that capitalize on its international network and global connections. One area that was being actively researched was the development of links between entrepreneurs in Armenia and Silicon Valley as well as other entrepreneurship hubs.. In addition, CEED intends to expand opportunities for meaningful connections with the Armenian Diaspora in the San Francisco Bay Area, which has many representatives who succeeded as entrepreneurs and investors. The development of this network has a significant potential to result in powerful mentorship, partnership, and investment relationships with CEED entrepreneurs CEED Talks During the Global Entrepreneurship Week 2013, in an effort to promote entrepreneurship and to empower youth to consider it as a career path, CEED Armenia launched an entrepreneurship speaker series entitled CEED Talks. The event attracted hundreds of students, experienced entrepreneurs, and business leaders and featured 9 CEED entrepreneurs sharing their insights on a variety of business topics and addressed a variety of questions raised by the audience. Issues ranging from building effective teams and turning ideas into products to experimenting with failure and fostering innovation were discussed. The recordings of the talks were made available online. It is expected that CEED Talks will be organized on a regular basis in order to facilitate knowledge sharing and to foster connections between experienced entrepreneurs and those who aspire to pursue this career path. Empowering the Youth On February 4, 2014 CEED launched a project in collaboration with the Ayb High School, the goal of which was to connect CEED entrepreneurs from the IT sector with high school students

43 in order to empower the youth to learn from IT entrepreneurs and to consider the possibility of starting companies. The program was designed as a series of company visits to create an opportunity for the youth not only to interact with the entrepreneurs but also to observe the day-to-day operations and to engage with the employees. In order to ensure that the students maximize this opportunity to get a deep understanding of the companies they interacted with, the visits were followed by written evaluations where the participants had to answer a number of questions ranging from a general description of the products and services offered by the companies they visited to questions on the companies’ values and business models. The IT firms that participated in this initiative include Instigate, SFL, Plexonic, Macadamian, Locator, and Volo. These companies hosted 170 Ayb High School students with each student having an opportunity to visit 3 companies. Given the extensive positive feedback, CEED will look for opportunities to involve more companies and to replicate this initiative at other educational institutions. This endeavor was part of CEED's ongoing efforts to foster the culture of entrepreneurship and to introduce the youth to experiences of entrepreneurs. Other initiatives in this area include CEED's entrepreneurship workshops at the State Agrarian University as part of the “Youth against Unemployment” Program as well as facilitation of collaboration with an expert from Silicon Valley in the development of a university entrepreneurship course. CEFE Methodology Training for Early Stage Entrepreneurs In 2013 CEED Armenia delivered the Entrepreneurship Development Program for the finalists of the StartUp Cup. The goal of this intensive program was to equip the emerging entrepreneurs with the skills necessary to turn their ideas into comprehensive business plans that could become the basis for successful ventures. The seven Startup Cup finalist teams were complemented by one more team led by a Top Class alumna. The Entrepreneurship Development Program consisted of 3 elements: trainings, individual consultations and teamwork. The training component was designed based on the Competency-based Economies through Formation of Enterprise (CEFE) methodology and conducted by CEED Program Manager, a certified CEFE trainer. CEFE was a comprehensive set of training instruments using an action-oriented approach and experiential learning methods to develop and enhance the business management and personal competencies of entrepreneurs. The participants worked together to research the market and obtain information on demand and competition, develop pricing and go-to-market strategy, and determine potential profitability of their ventures. The program was concluded by a presentation of 8 business plans to a panel of invited business experts who offered feedback and advice. The participants also received an opportunity to apply for the SME DNC start-up loans. One of the key results of the Program was the development of 5 business ideas that did not participate in the StartUp competition – an improved understanding of business issues and the findings revealed by the market research led some participants to abandon their initial plans and focus on new opportunities. After EDMC close-out the CEED’s strategy will be based on a two-pronged approach: to continue the development, introduction, and improvement of paid offerings to entrepreneurs in order to ensure a growing revenue stream, while at the same time to continue and intensify its efforts aimed at promoting entrepreneurship in the society. As the latter activities were critical to the development of an entrepreneurship ecosystem in Armenia, CEED envisions collaboration with donor organizations in order to sustain and strengthen its efforts in this area.

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Empowering Armenia’s Women Entrepreneurs The emergence and development of small and medium sized enterprises with the active involvement of Armenian women is vital for the economic development of Armenia. In Armenia, 44.4% of the 1.6 million women have employment, and the number of women managers in the business community is growing every year. However the number of women entrepreneurs in small and medium enterprises and the level of their active involvement in the overall decision- making process is limited. During the past years, the GOAM and donor organizations have taken targeted measures in an effort to strengthen the economic activity of women. One of the objectives of the EDMC Project was to support this initiative through the promotion of women entrepreneurship in the project’s value chains. The gender strategy was developed in the beginning of the project to address the challenges for the development of entrepreneurship for the female gender that were identified through meetings and discussions with women entrepreneurs. Women in Leadership In 2013, CEED started supporting women entrepreneurs by developing a program for this segment that targeted 15 winners of the “Best Woman Entrepreneur” competition. About half of these women represented businesses located in Yerevan and the other half were selected from businesses based in the regions. Several women entrepreneurs from the values chains supported by EDMC were also interested in participating in the program and joined the group. Based on the initial round table discussion with the participants, the program was structured with an emphasis on marketing and sales in order to assist the participants in finding customers for their products and increasing revenues. Training in this area was delivered in collaboration with the Armenian Marketing Association and included individual consultations to help the women translate the acquired skills into tools applicable for their particular businesses. In addition, the women entrepreneurs participated in a special session led by Sean Griffin and Kristen Bergman, experienced entrepreneurs and founders of the StartUp Cup. Having co- founded businesses himself, Sean shared his experiences with the participants and provided them with tools to develop “business game plans”, a methodology which allows participants to identify their current positioning in the market, determine the desired perception by the customers, and come up with a strategy to obtain the optimal market position. The women entrepreneurs worked individually and in groups, with intensive discussions and mentorship provided by the accomplished facilitators. Building on the experience of this initiative, CEED launched another program for women leaders, with a focus on negotiations and contract management June 2014. The skills gained during this program enabled women entrepreneurs to be more effective in structuring new deals and managing contractual obligations with both local and international partners, increase the participants’ confidence in pursuing entrepreneurial activities, and strengthen their leadership skills. In addition to providing participants with valuable skills, the program created a community of women entrepreneurs, which the participants intend to maintain beyond the program. Inspiring Export Business Ventures Among YSU's Young Women Complementing CEED’s initiative for women entrepreneurs, EDMC partnered with Yerevan State University's Center for Gender and Leadership Studies, aiming to link successful Armenian businesswomen with young potential female entrepreneurs who come to the meetings with grand 45 dreams and a need for effective guidance. Within the monthly “Meeting with Mentees” sessions, mentors provided much-needed inspiration, answered questions concerning gender-specific problems, and fanned the flames of hope for a successful future. “Women in Development” Internship Program In February 2013 EDMC launched the “Women in Development” (WiD) EDMC Internship Program and had nine interns in the EDMC office and one with our subcontractor Global SPC. Through this program, EDMC offered exposure and work experience to women university students and recent graduates. WiD was a typically short-term (from six months to one year) work assignment with an on-the-job learning focus, which helped the students to orient in their future carrier and gain long-term employment. During the internship program, they had the opportunity to contribute to EDMC’s work while learning valuable lessons about international development, working closely with EDMC’s local and international experts, attending project discussions, meetings, and events, being mentored by EDMC staff members, and gaining technical knowledge in the areas covered by the project. Interns were involved in EDMC’s four components, as well as the technical and operational teams. Each of them had an individual scope of work and tasks consisting of supporting the EDMC team with sector-related research and analytical work, economic and financial analysis, market assessments and case studies, reviews and drafting of legal acts, event organization, and data entry, as well as developing informational, marketing and PR materials. Through their daily work, interns interacted with EDMC clients, including SMEs, learning more about the private sector in Armenia and observing how entrepreneurs reach success in their respected fields. The program allowed them to decide whether they would like to start their own business in the future, invest their efforts into an idea, or continue their career as a professional in a chosen field. As a result, seven of them oriented in their future career and gaining long-term employment and three continued their studies in advanced universities within the EU. Success of Women Start-up Entrepreneurs EDMC was instrumental in helping to build the Armenian entrepreneurship ecosystem and had great results from continued support and partnership with competitions that support start-up companies and SMEs. At the beginning of this initiative, EDMC encouraged young women to participate in the StartUp Cup business model competition that would end up awarding them for their brilliant ideas. Two recipients of EDMC’s support were full-fledged woman-owned companies today and marked tremendous success in their businesses. Of these, it’s of note to mention “Ask” Armenian Audiobooks, a company that focuses on self- producing audiobooks primarily with a mission to spread the beauty and richness of the Armenian language, literature, and culture to diverse people and places. “Ask” won second place in the 2012 Armenia StartUp Cup business model competition, and was awarded $2000 in prize money, funded by EDMC. CEO and founder, Mariam Dilbandyan, had already invested significant personal resources into the company, and the prize from EDMC gave her the necessary means to create the Ask website, fund its eCommerce capabilities, and create its own recording studio. The assistance from EDMC helped to expand the company’s reach globally and increase its overall viability as a profitable company. Today, Mariam not only runs “Ask” but also focuses on social entrepreneurship and used the experience gained to help open a massage business where your treatments were administered by the blind she trained for the job. Entering the same contest with its pilot project looking at the degustation of probiotic goat cheese, TECTVM took home the top prize, placing 1st in StartUp Cup 2012. This scientific invention would later develop in the patenting of 2 strands of particular bacteria that help prevent

46 dysbiosis in the human intestinal tract as well as greatly improve the immune system as a whole. Founder and President of the company is Anahit Manasyan, a tenacious woman who combines science with entrepreneurship while always keeping human health at the forefront of her mission statement. Today, Anahit Manasyan has multiple projects underway, including those with a cellular reproduction and women’s health care. EDMC’s provision of the prize money helped TECTVM be able to cover licensing costs, as well as the ensuring of the patents. There are still many dreams to make into reality and Anahit Manasyan knows that no obstacle is too great to conquer. Turkish and Armenian Businesswomen Ties In preparation for a business networking trip to Turkey, EDMC delivered two-day rigorous training on negotiation skills and business contracting for twelve Armenian businesswomen, members of the Women’s Forum NGO. On July 11, 2012, they visited Diyarbakir to take part in a set of B2B meetings with Turkish companies and officials. As a result of the trip, eight preliminary contracts were signed. On April 8-9, EDMC, in close cooperation with Women’s Forum NGO, organized a forum for Armenian and Turkish businesswomen to foster the establishment of trade and economic relations between the two Nevin Il, President of the Eastern and countries, and continue the negotiations with Armenian South-Eastern Business Women women’s businesses. The Turkish businesswomen had ‘Dokunkad’ Association, Turkey the chance to learn about the Armenian business climate, “This is a historical effort to attempt its tax and customs systems, and business registration at resolving historical issues through processes, along with presenting their companies and trade. Trade crosses language benefiting from the networking opportunities with boundaries, borders, and countries. Armenian counterparts. In order to aid this, in the We got to know Armenia’s business framework of the forum was an exhibition, several B2B environment and will continue our meetings, and site visits to Armenian companies negotiations upon return to organized. Following the forum, Armenian Diyarbakir and think of ways we can businesswomen gathered samples of their products and closely collaborate.” sent them over to Turkey.

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BUSINESS ENVIRONMENT IMPROVEMENT

It was a core goal of EDMC to support the GOAM in creating a more business-friendly and updated regulatory framework through actionable technical analysis and legal drafting. EDMC was in this regard active in the fields of civil aviation reform, customs law reform, helping exporters, public procurement, competition, copyright, reform of the law on medicines, business restructuring, food safety law reform, work with the Regulatory Guillotine, e-commerce facilitation, inspection reform, improving Armenia’s Doing Business score, promotion of alternative dispute resolution etc. All the activities referenced below represented significant practical measures to improve the business enabling environment for SMEs in the VCs and will support, rather than hinder, wealth creation, job-creation, growth in business startups, sustainability for SMEs, greater opportunities for women, and the reduction of unemployment amongst youth. EDMC became a much sought after and respected partner by a whole range of ministries and agencies. EDMC supported their efforts at reform, connected them with businesses, and engaged in dissemination and advocacy. Civil Aviation Civil aviation liberalization in Armenia became a critical issue to be addressed by the GOAM. As a landlocked country, greater liberalization of the civil aviation market was a prerequisite for growth. It was estimated that the pre-existing system was causing Armenia a loss of $80-150 million in contribution to GDP. If anything, this was a conservative estimate. In 2012 and 2013, EDMC was requested by the GOAM to support the development of a draft paper articulating a new policy, together with a clear, transparent, efficient and comprehensive institutional and regulatory framework for civil aviation liberalization in Armenia. To achieve this goal, EDMC formed a Civil Aviation Team, which included three international consultants, to work towards setting out a new policy framework based on ‘Open Skies’ principles; a bespoke institutional framework to govern the civil aviation sector in Armenia; and to recommend a new regulatory framework to underpin the institutional reforms. The team delivered detailed recommendations for synchronizing the Armenian legal/regulatory/institutional framework in the air transport sector with best international practice requirements. A detailed and time-framed roadmap was designed to introduce a liberalized policy governing the air transport market. It considered the aviation infrastructure services’ efficiency, effectiveness, and departure taxes. It also outlined improvements to consumer protection. The GOAM was provided with a summary analysis of the implications of the intention to establish a national flag carrier policy. The team recommended that the GOAM adopt a liberalized, “Open Skies”, policy, completely removing (on a reciprocal bilateral basis) all existing limitations on the numbers of airlines that can provide services to and from Armenia, the routes (including intermediate and beyond points), capacities, frequencies, and fares that each airline desires to offer. The report emphasized that a liberalized environment, combined with a separation of responsibilities (policy, technical, and accident investigation), was a crucial step forward in reducing costs, improving efficiency and introducing more competition without compromising air safety. On October 23rd, 2013, the Government issued Decision N 1248-A (Government Decision) on the competitive provision of air transportation services, effectively opening Armenia’s skies to competition for the first time. Feedback from our counterparts noted that this Decision drew 48 heavily on EDMC regulatory and institutional recommendations to the GOAM. Shortly following the issuing of the Government Decision EDMC supported the launching of the Civil Aviation Policy Department (CAPD) under the Ministry of Economy and the hiring of the Team of three local experts to carry out daily civil aviation work of the CAPD. Following the Government Decision, EDMC moved to embed a three-person team of international civil aviation experts into the MoE to work exclusively on the restructuring of the Armenian civil aviation sector. They worked with GOAM counterparts (GDCA, NCFA and others) to draft a comprehensive implementation plan for civil aviation liberalization, including drafting a roadmap on civil aviation reform setting out the steps to be taken on a new institutional and legal framework, identifying capacity-building needs, policy, and negotiations. The GOAM, supported by EDMC, amended several Air Service Agreements (ASA) to remove any limitation on the number of flights between Armenia and these other ASA countries. On December 24th, 2013, the Russian Federation was the first country to amend their existing ASA with Armenia to accept the GOAM’s “Open Skies” invitation. (Note: the USA has had an “Open Skies” agreement with Armenia for many years). EDMC international consultants conducted interactive on-job training for the MoE’s CAPD staff. From May 26 through June 1, 2014, EDMC organized an intensive six-day training course, which focused on areas including, but not limited, to developing Air Service Agreements, international best practices and practical recommendations to consider during the processes of negotiating and concluding the ASAs. Specific matters discussed in detail were the nine freedoms of the air, as established by the Chicago Convention; the typical provisions for the ASAs; fair competition aspects; code sharing and examples of such. As part of the on-job practical training exercises, the international STTA reviewed the two pending draft ASAs, with Denmark and Israel, that the MoE, as the respective authority, was assigned to negotiate. This was an invaluable exercise as CAPD subsequently used the practical advice shared by the STTA consultant and the text of the given ASAs as a model when negotiating and drafting the text of ASAs with other countries. EDMC, jointly with the MoE and the other members of the Civil Aviation Reform Working Group (WG), engaged in the mammoth task of reforming the institutional framework for civil aviation in Armenia, culminating in the drafting of the Government Decision on making changes to the Charter of the MoE and the Charter of the GDCA. The efforts entailed ensuring a clear separation of the economic functions pertaining to civil aviation from the technical ones. In addition, efforts were made to thoroughly scrutinize the comments submitted by each WG member on the Draft Decision disseminated by the MoE and explain the possible implications thereof. EDMC, jointly with the MoE, developed the roadmap of the system for authorizations required in Armenia for conducting a civil aviation business. The roadmap shows the authorizing body, as well as the exact steps and the sequence thereof required for obtaining the appropriate permission/authorization. EDMC also brought the relevant expertise to complete the drafting of the Charters of the MoE and the GDCA, the new Civil Aviation Law of Armenia and to develop the technical regulations, including procedures for application and issuing of permissions/authorizations for conducting aviation activities. In addition, EDMC developed steps to indicate the future action of assistance to the MoE in the civil aviation reform program.

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EDMC’s efforts in supporting and facilitating liberalization greatly improved the prospects for exporters in the VCs. The resulting increased competitiveness within the air transportation sector will help enhance trade and tourism by increasing the availability of flights and reducing their costs, increasing visitors to the country and boosting employment and sales, particularly in the regions. Regulatory Guillotine Program The Regulatory Guillotine Program was a major project of the GOAM and was intended to create a more business-friendly, effective, and efficient regulatory environment. EDMC performed a comprehensive review of all licensing and government authorization requirements, procedures and inspections applicable to enterprises operating in the EDMC selected value chains and shared the report with the Guillotine Program. EDMC provided them with a discussion paper on “Improving the Legal Framework Governing Pharmaceuticals” which contains a comprehensive overview of current law and the newly introduced draft law covering pharmaceuticals. The paper also contains a number of recommendations aimed at improving the regulation of the sector in Armenia. EDMC assisted the Guillotine Program in reviewing the current licensing/permits framework. Overall, 28 recommendations were made, including the introduction of “silence is consent” and other licensing principles, as well as specific recommendations to abolish or simplify licenses for: trade organizations; import of vodka; assaying and hall-marking of items made of precious metals; registration of residents (exploiters) of free economic zones. In addition, initial recommendations were made to further abolish or simplify 38 licenses in various areas. Substantial assistance was provided to the Guillotine Program in reforming the customs regulations (see the section on Customs Regulations below). Trade Facilitation At the request of IT businesses EDMC prepared a report outlining the existing practices related to the export of dual use goods (i.e. goods which can be used for civil and military purposes) and the widely adopted practice of misclassification of those goods. The report proposed specific amendments to the legislation, many of which were later accepted by the Guillotine Program. EDMC provided substantial assistance to the Guillotine Program in reviewing customs regulations and checking them against international best practices, including regulations on various customs regimes (temporary import/export for processing; import into customs warehouse, etc.); customs declarations; customs brokers; certificates of origin, postal goods, passenger declarations, personal exemptions etc. Recommendations were developed to simplify the licensing regime for: customs warehouses; customs control zones, customs brokers, customs carriers; and duty free shops. In addition, terms and conditions for licensing of customs warehouses were drafted together with relevant application forms. Discussion Papers on Customs Valuation Constraints and on Dual Use Goods with specific legal recommendations were also provided to the Program. Additional support was provided by an experienced local expert for reviewing regulations on customs control and customs valuation, as well as administrative and criminal violations and penalties. EDMC reviewed draft amendments to the Customs Code, developed by the State Revenue Committee of RA (SRC), aimed at introducing “authorized economic operator” (AEO) programs

50 which provide for simplified customs procedures for qualified businesses. Commentaries and recommendations for improvement of the draft were provided. Further involvement of EDMC in developing the legal framework for AEO will be discussed with SRC. In September 2013 a large customs conference was held in cooperation with the American Chamber of Commerce in Armenia (AmCham), involving the US Ambassador, the Deputy Chairman of SRC and other high officials. The conference offered an opportunity for members of AmCham and the business community in general to learn about the latest developments in customs reforms developed by SRC and the Guillotine Program, as well as to raise issues and ask questions to a panel of local and international experts representing the private sector and public agencies. Two guides for exporters of agricultural and non-agricultural products and one guide for importers were developed. These guides contain a detailed description of export requirements in Armenia as well as an overview of import requirements in the European Union and the Customs Union of Belarus, Kazakhstan and Russia. The scope of the issues addressed in the guides was defined in consultation with the SME DNC. The guides together with interactive export/import process maps were incorporated into the EDMC website and are freely accessible to SMEs in the VCs. E-Commerce EDMC completed a Report on E-Commerce Readiness. This analysis was time crucial as it provided specific recommendations for actions that need to be followed in order to develop e- commerce in Armenia. EDMC focused on creating an enabling environment for the businesses operating in the target VCs. In case of the hospitality services, the focus was on promoting electronic reservations and payments. In the HFV sector, the targets were electronic ordering and payment of fruit and vegetables for processing needs, delivery of supplies and exports. In the Pharmaceutical VC, the aim was to facilitate electronic ordering and payment of supplies, medical compounds, and laboratory agents. In the High-Tech sector, the focus was on enabling user- friendly provision of services, including services provided by local banks. This was also beneficial for promoting competition in retail markets and enabling cross-border trade. The E-Commerce Readiness Report assesses the readiness of Armenia to launch e-commerce in the country. It lists and analyzes in detail all domestic laws and regulations that control activities associated with e-commerce and the availability of technologies, payment systems, cyber safety, postal and courier delivery components needed to enable e-commerce. Following the completion of the Report the MoE requested EDMC to engage in developing the legal framework for e-commerce. As the first stage of the project, EDMC consultants conducted a number of meetings with both public and private sector representatives to identify issues to be addressed in the package of legal amendments. During the second phase, EDMC developed a package of amendments to various pieces of legislation, including the Civil Code; the Law on Trade and Services; the Law on Consumer Rights Protection; the Law on Electronic Document and Electronic Digital Signature; the Law on Currency Regulation; and, the Law on Application of Cash Receipt Machines. The draft amendments were discussed at length with the MoE, the businesses and other stakeholders. A workshop was organized jointly with the MoE on December 16, 2013 to discuss the improved package of legal amendments with public and private sector representatives.

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The drafts were thereafter officially shared by the MoE with the relevant Ministries and Agencies of Armenia for comments and recommendations and submitted to the GOAM for further processing, after which the package will be sent to the National Assembly for their adoption into law. Inspection The GOAM launched its Inspection Reform Project in September 2009 to establish a risk based inspection system for all types of inspections and to optimize the inspection system to minimize duplications among inspections, reduce the areas that were subject to inspection, and increase the quality of inspections. EDMC developed a Concept Paper on Optimization of the Inspection System in close cooperation with the Inspection Reform Working Group, including the MoE, IFC, and EBRD. The Paper addressed the main principles and directions of optimization of the inspection system in line with international best practice. The MoE led inspection reform efforts were carried out in two separate directions: legal and institutional reform processes. EDMC engaged extensively in both directions of the reforms. Legal reforms component: EDMC drafted the new “Law on Inspections” and also reviewed the draft “Law on Inspection Bodies”. The Drafts were shared and discussed with the Inspection Working Group and the stakeholders and improvements were done based on the feedback received. EDMC shared with the working group the best international practice on certain aspects of inspections. The draft law was submitted to the MoE for consideration and official circulation. Follow-up round table discussions were organized to inform the wider public about the initiative. Institutional reform: under this component the EDMC commented on the draft government plan on the pilot project of merging two inspectorates, including health inspectorate and the labor inspectorate. Also, a model inspectorate was proposed to the MoE. As a further step, the business process maps of the model inspectorate were developed. EDMC engaged in other inspection priorities, including the development of the training curricula for the inspectorates and raising awareness of reform efforts. Alternative Dispute Resolution The MoJ sought EDMC’s assistance in setting up an effective Alternative Dispute Resolution (ADR) system in Armenia. It was agreed, in a Letter of Intent between EDMC and the Ministry, to provide the assistance in four aspects: improving legal environment, identifying the needed institutions, training and communication. EDMC and the Ministry of Justice held a launch ceremony for the ADR program, involving the US Ambassador and the Minister of Justice, at which the letter of intent between the Ministry of Justice and EDMC was signed. The launch ceremony was followed by an ADR conference with the involvement of two US judges, the local judiciary and businesses. The conference demonstrated the application of arbitration and mediation, with the role of arbitrators and mediators performed by the US judges alongside two US attorneys acting as counsel and the BEIT staff taking on the role of businesses in dispute. The conference addressed the benefits of ADR for the Armenian economy, businesses,

52 and the consumer, the approach to ADR in the USA, ADR and ODR Reform in the EU, and the current situation for ADR in Armenia. EDMC developed a comprehensive report on ADR laws and practices in Armenia. It contains a very detailed analysis of the Armenian legal framework for ADR, comparison with international best practice and policy level advice on implementing institutional changes (creating an ADR Center, establishing arbitration and mediation procedures, education lawyers, judges etc.). A roadmap with a detailed action plan was also developed. In total, 25 recommendations were submitted to the Ministry of Justice. The report was developed in close cooperation with the Ministry of Justice and local lawyers. It was highly acclaimed by a number of ADR experts and will serve as a basis for an action plan to be developed by the Ministry of Justice. Tourism EDMC developed a comprehensive reform package on Tourism. The package includes the draft Law on Tourism, the Draft White Paper on Tourism Law Reform and the Next Steps. The accompanying White Paper was updated to take into account recent international developments and changes in Armenian policy- e.g. in relation to licensing, permits and inspection. It will support the passage of the draft law through the National Assembly. EDMC believes that this was a key piece of legislation addressing the government’s determination to foster economic development (particularly in the marzes), create and sustain employment (particularly for women and young individuals), foster and facilitate the growth of SMEs and micro-businesses, support the restoration, maintenance and protection of religious and cultural built heritage, develop and improve the tourist product offer, and create a more dynamic, professional and world-class tourism offer. Together with the Ministry of Economy, the National Competitiveness Foundation of Armenia, and the IFTTA, EDMC organized a two day conference in Yerevan on 19 & 20 April 2013 on the theme of European Harmonization of Travel and Tourism Law: Lessons for Armenia. The colloquium attracted 28 leading tourism lawyers from across Europe and worldwide to set out practice in their own jurisdictions and to debate the implications of international harmonization of Travel and Tourism Law for Armenia. These lawyers shared practical advice to help Armenia avoid the pitfalls experienced in other jurisdictions harmonizing with the EU’s Travel and Tourism Law. Armenian stakeholders from the public, private and civic sectors also attended and participated in the discussions. The conference went on to address legal issues on tourism development, planning, competition, consumer protection, harmonization and approximation of laws, passenger rights, and alternative dispute resolution issues, amongst others. These are matters of pressing concern to Armenia as it develops its travel and tourism sector and EDMC was assisting the GOAM in making reforms in these fields. As a result of the conference, EDMC developed a report with recommendations based on the presentations and discussions. These were aimed for the Armenian government to adopt in order to develop and grow tourism through legislation and policies. As part of its activities to improve the legal framework to support the development of tourism in Armenia and strengthening institutional structures related to the tourism sector, EDMC advised the National Competitiveness Foundation of Armenia (NCFA) on the structuring of its new Tourism Armenia entity so that it can function as the National Tourism Organization (NTO). Under the Charter drafted by EDMC, the new NTO will be designed in a way as to make it the authority responsible for formation and implementation of the national strategy and action plan for tourism. The key function of the NTO will be to maximize international tourism visits to the country thereby generating economic and social benefits. In addition to developing the charter of the proposed NTO, EDMC set out the manning and management structures for the NTO; job 53 descriptions for the management and the technical staff; a three-year action plan and program for the NTO; budget estimates for the establishment and operation of the NTO; among other matters. Supporting the NCFA in implementing a community development project for Tatev was among EDMC’s priorities within its Tourism development program. EDMC identified and appraised the important resources in the Tatev Tourism Development Area, including the natural, sacred and historic areas, and BEIT came up with a strategic vision on Tatev - the Master Plan and Management Partnership for Tatev, as well as a detailed step-by-step guide on how to develop the project. These efforts were supplemented by the development of physical planning, along with architectural and community design proposals, handled by a contracted internationally-renowned architect.

EDMC worked with the Union of Incoming Tour Operators (UITO) to help them realize the goal of professionalizing Armenia’s tourism services. EDMC provided support to UITO by developing recommendations based on best practices in organizing business associations in the tourism/travel sector to help them become a more dynamic organization in the tourism/travel sector. The structure, membership, vision and mission, and the financial aspects of UITO were addressed and an Action Plan for implementation by UITO was developed. Copyright Law EDMC drafted a comprehensive Copyright Law for Armenia as itt was evident that modern copyright protection was imperative in order to promote technology (know-how) transfer. This enables innovative high-tech and pharmaceutical product development; protection of commercial manufacturing secrets related to product recipes and the mix of ingredients impacting pharmaceutical bio-additives and food processing product development. The impact will similarly be felt in the tourism sector, where it will aid the development of creative and innovative tourism- related products such as specialized tour programs and commented itineraries, specific musical and audiovisual products geared toward tourists, touristic information materials (guides, maps, booklets, leaflets), electronic maps, performances of authentic local music, dances and other cultural heritage, enabling museum collections, etc. As a follow up activity, EDMC initiated a grant program for advocacy of a new Copyright Law. The grant program was implemented by the UITE and focused on the improvement and finalization of the Draft Law through public discussions of it with the wider public. Such discussions were held in Kotayk, Lori, Shirak and Syunik Marzes and yielded useful comments and recommendations by the public, which were considered in the Draft Law. These efforts aim at final adoption of the Draft Law by the National Assembly. Bio-Pharmaceutical EDMC supported the drafting of the new “Law on Medicines” to boost pharmaceutical industry development, attract investment and increase exports of generic drugs to new global markets. EDMC made 49 recommendations, of which 34 accepted and incorporated into the draft law. When approved, this law will fill a gap between local and international markets and work towards the meeting of international requirements. The recommendations address the scope of the law, institutional set-up, price controls, clinical trials, registration, side effects and counterfeiting, manufacturing, import, export, storage, sale, and advertisement of medicines. They were discussed at length and the underlying provisions were presented to the Working Group Members who drafted the law, representatives from MOH and the Drug Safety Agency, as well as officials from the industry, including producers and 54 importers. Almost all of these recommendations were aimed at approximating the draft law with relevant EU directives. Some of the recommendations, in accordance with Armenian practice, will be addressed in the secondary legislation. EDMC reviewed and proposed amendments to the Code of Marketing Practice for the Pharmaceutical Industry in Armenia initially drafted by the MPIU. Subsequently, recommendations were proposed to the MPIU on disciplinary issues and on adoption of an ADR approach to dispute settlement. Further to this, it was suggested to the MPIU to review their structure to make them more transparent, effective, and open to new membership. Food Safety The CIS countries are amongst the traditional markets for Armenian products, in particular processed food and pharmaceuticals. In recent years, these countries have been aligning their regulatory framework in these areas with the acquis communautaire of the EU. It was imperative that Armenia undertake the necessary reforms to adopt EU compliant SPS standards, develop the necessary capacities of both laboratory and domestic accreditation agencies for growth and sustainability of Armenia’s food processing industries. EDMC, through the work of a local expert, identified the domestic legal framework, technical standards, practices and institutional set-up governing SPS and TBT applicable to the fruit/vegetable/herbs processing VC. This report provided a useful resource to the international expert engaged by EDMC to develop recommendations on SPS/TBT harmonization with EU requirements in the fruit/vegetable/herbs VC. EDMC engaged a local laboratory expert to identify the laboratory testing needs of enterprises operating in selected VCs and to compare this to the available laboratory capacity. The report showed the real picture of the laboratories serving the food sector. According to it, out of 94 accredited laboratories in Armenia, only 22 provide services related to the fruit, vegetables and herbs VC. The report contains actionable recommendations for redressing the situation. The report also revealed that the majority of certified laboratories do not comply with ISO 17025 requirements even though they were granted such a certificate. The report was used by the SSFS to develop an official action plan for improvement of laboratory capacities in Armenia. Additionally, a comprehensive report including a detailed training guide on SPS requirements for the export of processed fruit, herbs, and vegetables to the EU market was developed. EDMC engaged with GOAM in reform to approximate the Armenian phytosanitary regulations with EU Law. An EDMC consultant worked very closely with the State Service for Food Safety in the drafting process to make sure that the report and the draft legislation were approved by the SSFS. Amendments to Government Decree 1093 was drafted with the purpose of regulating the inspection of plants at customs warehouses instead of border check points, introducing phytosanitary certificates for exporting and re-exporting. Other legal acts were drafted on measures to prevent the spread of certain dangerous pests into Armenia. All of these regulations were approved by the SSFS.

Public Procurement During the first year of the EDMC program, it became clear from discussions with VC businesses that they face major challenges in applying the procurement legislation, which deters them from participating/bidding in the public tender processes.

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To address this, activities were initiated in two separate directions, including improving the legislation and explaining the applicable rules and procedures to the VC businesses and the public customers, thus promoting enforcement of the respective legislation. A discussion paper was developed reflecting EU best-practice recommendations in the procurement area and advanced several recommendations for developing procedures and legal amendments. A roundtable was jointly organized with the SME-DNC and the Chamber of Commerce to discuss the recommendations made in the discussion paper with private sector representatives and the Procurement Support Center (PSC) under the Ministry of Finance (MoF). EDMC, jointly with the PSC, developed a Guidebook for SMEs that describes and shows the necessary steps to take when applying for a public tender. In addition, a Manual for public customers was also developed, aiming to educate public sector officials in charge of performing public tenders on the applicable procurement procedures. The Guidebook and the Manual were then updated in light of recent Government efforts that introduced changes in the procurement procedures. The guide and the manual were approved by the PSC and a training series was organized in the marzes aiming at the SMEs and the customers to present the Guidebook and the Manual, which also were printed and distributed to the relevant parties and stakeholders. Doing Business EDMC periodically submitted the proposals for legal reforms to the Ministry of Economy to improve Armenia’s ranking in the World Bank Doing Business (DB) report, in particular, its ranking in “Trading Across Borders,” “Getting Credit,” “Protecting Investors,” “Enforcing Contracts” and “Resolving Insolvency.” As part of its support to the Ministry of Economy in improving Armenia’s ‘score’ in the ‘Doing Business’ Reports, EDMC sought to raise awareness on contract enforcement among business entities operating in selected value chains and the wider business and legal communities, contribute to improvement of contract enforcement procedures in Armenia, and its better ranking in the World Bank DB report. The Ministry of Justice requested EDMC’s assistance in organizing three seminar-discussions on the procedures necessary for the resolution of disputes arising from contracts and describing in detail all the steps and costs necessary for the resolution of disputes. EDMC developed a report with detailed description of the study results on the existing situation and recommendations for further improvement of Armenia’s ranking in Enforcing Contracts. A case study was then conducted in accordance with DB Enforcing Contracts Methodology (including all assumptions) and addressed the following: courts and applicable rules, the competent court, procedural rules, time, filing and services, trial and judgment, enforcement of judgment, and costs. EDMC organized three round tables to discuss the report and recommendations with legal professionals, contributors to the DB report, and business entities operating in selected VCs. Competition and Commercial Law EDMC engaged in improving awareness within target VCs on current competition rules and practices. It supported two public events: the Plenary Session of the Public Council on Economic Competition operating under SCPEC and an event for journalists. Both events served as excellent forums for discussing and identifying competition constraints for future reference by EDMC.

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Furthermore, EDMC hosted a high-level conference on competition issues and solutions, co- sponsored by SCPEC and AmCham. The conference highlighted competition “bottlenecks” in the selected VCs caused by anticompetitive practices: abuse of dominant position, collusive agreements etc. EDMC also held a seminar on “Economic Competition in Public Procurement Procedures” intended for various target groups including officials of the Ministry of Finance and SMEs operating in the EDMC supported VCs. The objective of this event was to disseminate knowledge and best practice experience in combating anti-competitive practices and behavior in public procurement processes. Subsequently EDMC reviewed the Armenian Competition Law and provided expert opinion on possibilities for improvement. EDMC then developed a comprehensive report on market definition and market power, and presentation on dominance and consumer harm which included an overview of the areas where dominance was relevant (antitrust, concentrations, liberalization) as well as practices which may be considered abusive under EU competition law. EDMC drafted recommendations on how to identify conduct which may be considered an abuse of dominance under Armenian Competition Law. These were translated for SCPEC for their consideration and enactment as an internal regulation. To support the efforts of the MOJ to bring the civil law of Armenia in line with modern best practice EDMC developed a report identifying the areas in which the current legal framework was outdated or has significant gaps. In particular, the report focuses on unfair contractual terms, misleading and aggressive commercial practices and comparative advertising. The report contains actionable recommendations to amend the existing regulations to strengthen the competitiveness of local businesses on foreign markets, enhance consumer confidence and fair competition. Insolvency EDMC reached an agreement with the WB to jointly implement a project on reforming and improving the insolvency legislation and practice. It worked with the WB’s international experts and commented on “Resolving Insolvency in Armenia” report to provide the necessary knowledge on local practice and environment, including statistics, tax implications, regulation of insolvency administrators, relevant criminal law provisions, etc. A number of interviews were conducted with judges, insolvency administrators, lawyers and other insolvency practitioners to lay an analytical framework for a proposed regulatory intervention in the field. As a result, EDMC developed a report on practical issues in Armenian bankruptcy law with more than 20 actionable recommendations to improve the situation with bankruptcy administrators, automatic stay, the status of secured creditors, preferential and fraudulent transfers, appeals etc.

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ACCESS TO FINANCE

The core objective of EDMC was to facilitate increased utilization of financial services - commercial financial products and equity - into the four target value chains, as a lack of financial services was a key constraint to their growth and development EDMC contributed to this objectives by creating an integrated financial services continuum, with credit, equity and additional financing mechanisms. EDMC provided targeted technical/training support to progressive commercial finance institutions to build their capacity to offer a diverse, complementary and inclusive suite of relevant and sustainable SME financial services through a range of delivery channels and innovative methodological and technological approaches. EDMC also provided targeted technical/training support in the financial literacy/planning area to SMEs in our value chains to enhance their capacity to effectively market their viability as lending clients. This combination of supply and demand-side institutional intervention approaches helped SMEs at all levels of the selected value chains significantly expand sustainable access to financing. This financing was in turn represented one of the keys to expanded investment, sales and employment in our selected VCs. Access to Finance Strategy

EDMC Target Value Chain SMEs

Target Information Bio- Beneficiaries Technologies Pharmaceutical

Food Tourism Processing

Major and DIALOG PLATFORM Supporting Unions & BDS Financial Governmental Private Beneficiaries Associations Providers Institutions & International Companies Organizations

Major and SMEs Supporting Efficient Equity Financial Financial

Beneficiaries SME Investment Education Management Banking for SMEs for SMEs Enhancement

At the heart of the EDMC approach were the Partner Financial Institutions (PFIs), chosen to provide core value chain financing intermediation activities over the course of the program. The strategy was devised for developing and working with the PFIs to effectively and efficiently service the SMEs in the selected value chains – in effect, the model for future interaction between the EDMC, the PFIs and the SMEs in the VCs. A PFI segmentation approach was designed whereby each PFI would target several (but not all) value chains and receive EDMC TA in order to service those VCs in a focused manner. In Year One EDMC was successful in assessing the Armenian banking sector and developing criteria for selecting a limited number of SME-focused banks for EDMC partnership. The selection 58 of banks was based on both quantitative and qualitative factors, and the three banks chosen - Unibank, Araratbank and Armbusinessbank (ABB) – represent a balanced sample of Armenia’s banks, as in terms of outstanding loan portfolios, Araratbank can be viewed as “small”, Unibank as “medium” and ABB as “large”. EDMC introduced dozens of enterprises to the banks and enabled them to accurately segment and assess their loan portfolios via the four sectors - something that they were not doing before EDMC collaboration. EDMC also performed diagnostic assessments and strategy development planning with the PFIs to identify core needs for technical assistance in better serving the needs of the enterprises in the sectors. In Year 2 EDMC reached out to the UCO sector for developing additional EDMC partnerships. The benefits of working with UCOs were that they were able to service the lower-tier micro- enterprises in rural areas that had the most difficulty in approaching and being serviced by banks. While UCOs can legally disburse quite large loans as banks can, their focus tends to be more on the micro business segment which were often ignored by banks. As a result EDMC developed a relationship with the new Goodcredit UCO, expanding the EDMC partnership to a fourth partner financial institution. The financial stakeholders EDMC worked with included not only PFIs, but other financial institutions as well as BDS providers, private companies, and international financial institutions and projects. EDMC executed a strategic yet at the same time an opportunistic approach that emphasized not only more efficient delivery of SME services through financial institutions, but also reflected the importance of developing bankability of the value chain companies. In particular, EDMC worked with anchor companies as well as other firms in the value chains assisting them in accessing needed financial services and developing their financial management capacity. This was achieved by linking them to Partner Financial Institutions (PFIs), providing financial management assistance from in-sourced EDMC ATF staff and BDS provided through grantees. A major difference between EDMC and other ATF projects which have been implemented in Armenia in the past was its “double-sided” approach – EDMC worked directly with the companies in the target value chains and at the same time EDMC worked with financial institutions. A second major distinction was that EDMC worked with the banks to help them understand the critical role that improved risk analysis and management policies can play in helping them broaden dramatically their client outreach focus; and in creating a new profitable clientele from the network of SMEs (including those in our value chains) which historically were so severely under-financed in Armenia.1 A third major distinction was that under outreach efforts EDMC focused on development and application within partner institutions of financial products that were particularly relevant to the financing needs of the SMEs operating at different rungs of our selected value chains; thus again reinforcing the direct linkage between financial institution- focused support efforts and addressing the financing gaps facing our value chain participants. As a result, EDMC documented 500 financial transactions between the PFI (and even one additional bank) totaling more than $20 mln during 30 months of operation of ATF component. This new financing resulted in significant impact for the SMEs in the sectors, in the form of investments for modern equipment and facilities, increases in working capital for standard production and seasonal working capital for peak production periods. All of this led to the expansion and development of the enterprises in the four sectors.

1 This stands in stark contrast to other donor programs, which have focused predominantly on directly expanding “liquidity” through establishing special credit lines with partner banks and helping administer them, without fundamentally changing the perceptions of those banks regarding what constitutes a “viable” client. 59

PFI Capacity Building Having laid the strategic approach for increased financing in the target sectors and assessing how to best build the capacity of PFI for success, EDMC delivered multiple technical interventions during the project life-cycle. PFI capacity building were implemented through three activities: efficient SME lending, new client outreach and new product development. Efficient SME Lending EDMC focused on technical assistance activities to ensure sustainability of efficient SME financing as well as emphasize technical assistance for portfolio level activities such as risk based loan pricing which assisted the PFI banks to price loans for increased profitability as well as to reduce credit risk. Additionally, technical assistance in marketing for SME lending was emphasized as the PFIs were lacking marketing plans. Particularly:

 280 credit staff trained in best practice techniques and approaches for SME lending;  Pilot internal credit scoring models for two PFIs developed.  Two PFIs made significant changes in credit assessment requiring Board of Director approval resulting from EDMC proposed changes.  A master list of VC companies with ATF needs was created based on a consumer satisfactory survey, company visits and an existing EDMC company database. Companies were sorted by their requirements for debt financing and/or equity, as well as, financial management needs. This was shared with PFIs, as a marketing tool to attract more customers and increase access to finance for the selected VC companies. EDMC ATF team also worked in tandem with the Value Chain Competitiveness component, emphasizing company-based approaches that will involve participating in the embedded teams utilizing key account management principles. This collaboration resulted in robust financing opportunities on a sector as well as individual company basis.

 The “Financial Analysis for IT Companies” training was conducted for 12 senior loan officers and risk managers of EDMC’s PFIs. The IT training material helped the PFIs’ risk managers to better understand the life cycle of IT products and associated cash flow which led to increased lending to the IT sector.  Training sessions for 60 loan officers from the ABB, Araratbank, Unibank and Aregak UCO were conducted by EDMC and ICARE to familiarize them with the food processing sector, including canneries, greenhouses, cheese producers, fish producers, grape processing and other sub-sectors. Information on raw materials, seasonality, equipment, production technology and overall information on VC flows within the industry was delivered during this training. As a result, PFIs increased their utilization of agro-lending products for new loans to this sector. Development of New Lending Products EDMC focused on developing new loan products with the PFIs that focused specifically on the financing needs of the value chains. EDMC worked with the PFIs on the design of the following products and the pilot launching:  ABB developed purchase order financing and an unsecured credit line product and related risk assessment approach with loan officers to be trained in their usage in December 2013.  Goodcredit developed a new agricultural lending product with at least nine loans made from December 2012 through end June 2013.

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 Development Credit Authority (DCA) Guarantees - EDMC supported the implementation of new DCA guarantees for PFIs Unibank and ABB and EDMC worked with both banks to utilize the guarantees with Unibank booking three loans under the guarantee and ABB booking one loan as of end July 2013. The 4 loans placed under the DCA guarantees total more than $400,000 equivalent.  Unibank adopted a decentralized and more cost effective and efficient loan analysis/approval system. Once the technical assistance was completed, EDMC ensured that the new tools and systems were institutionalized on the part of the banks. In this regard, EDMC continued focusing on SME specialization for loan officers in the PFIs. This took the form of targeted technical advisory support to these institutions, guided by technical assistance by the resident staff of the EDMC ATF team. Increased Outreach to SME Clients During Year 1 EDMC provided to the PFIs significant market information about the enterprises in the four sectors – including an updated VC Mapping Report and contact information for hundreds of sector enterprises. ATF staff introduced dozens of enterprises to the banks and enabled them to accurately segment and assess their loan portfolios via the four sectors - something that they were not doing before EDMC collaboration. Starting from Year 2 EDMC emphasized the continued use of platforms to facilitate dialog between value chain enterprises and the partner institutions such as the SME DNC training and trade finance training for value chain companies, as well as participation of the PFIs in trade shows such as DigiTec. During Year 1 activities such as updated value chain mapping was also used to guide the ATF team’s work in working with the PFIs in targeting value chain companies for financing and financial management assistance. SME Financial Education and Increased Bankability EDMC successfully implemented strategic two-pronged strategy to improve SME outreach capacity in progressive financial institutions, while building the institutional capacity of companies in our VC’s to effectively approach banks and access sustainable finance. In this respect, EDMC delivered targeted technical assistance efforts that was focus in depth on the financing and financial management needs of key value chain actors and other high potential SME’s in our VC’s. EDMC also worked with key anchor firms to expand their capacity to provide efficient borrowed financing vehicles to input suppliers along the value chain.  Over 372 companies in EDMC value chains participated in the financial management training course to improve their financial management Financial education trainings were conducted in Armavir, Sevan, Noyemberyan, Vanadzor, Artashat, Gyumri, Eghegnadzor and their surrounding areas and were being delivered by SME DNCs extensive national network of SME Centers in each marz. These courses included business planning, principles of budgeting, fund raising, negotiating with banks, and principles of corporate governance, risk management and internal controls. Over 25% of the companies who participated in these training classes, many of which were women-owned businesses, received new loans to expand employment, sales and/or exports.  Trade finance training delivered to 17 SMEs, of which six were value chain companies, improved their understanding of the benefits of trade finance products.  15 clients completing new business plans and applied for loans as a result of BDS services under the EDMC grant project.

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 Instigate’s budgeting system was developed and improved as a platform that could be used by the entire IT sector. This model included a wide range of tools that determine financial planning, forecasting, monitoring, investments and analysis. The budget model was shared as a template with EDMC, which was replicated by several other IT companies. EDMC also provided training for senior management and financial managers to use this new tool which helped to increase sales and exports.  An online loan application tool (www.credit.am) for SMEs and individuals seeking loans was developed by Monada LLC, an EDMC grantee. This grant included loan-related consultations to local SMEs in the towns of Berd and Noyemberyan through local NGOs. By the end of March, over 200 loan applications were completed online, and a survey of the applicants established that 30% received loan offers from banks and other credit organizations to expand their businesses.

Through a loan from EDMC’s PFI, a local organic herbal tea producer, BioUniversal, was able to renovate its warehouse to bring it up to international standards, which allowed the company to receive an organic certification. It was also able to purchase state of the art equipment which have revolutionized its production capabilities and expand the array of products it can produce in the future. The loan also allowed it to buy its imported materials in bulk, as opposed to the much more expensive bit-by-bit importing it used to do. Ninety percent of production is exported, mainly to Russia, USA, Germany and UK. It has made two agreements with US-based companies to export there, which in turn sell the teas through their on-line marketplaces. Russia is BioUniversal’s largest export market, which is currently experiencing an organic craze of its own. Ninety percent of BioUniversal’s raw materials are produced locally in Armenia, and on top of the farmers which it supports, its factory also provides jobs to 45 employees during its peak season. Each of the herbs for the organic teas, such as mint and thyme, are each collected from the specific regions of Armenia which are known to have particular good quality of each particular herb. BioUniversal also produces black tea varieties with herbs imported from Sri Lanka.

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Small Enterprise Assistance Funds

EDMC pursued a unique approach to link SMEs in high potential value chains to robust sources of equity finance. The project directly supported the development of equity fund institutional capacity and leveraged major equity fund resources through the establishment of a branch office of the Small Enterprise Assistance Fund (SEAF), which jumpstarted equity fund development across 26 transitional economy and other emerging market countries. Leveraging Equity Fund Resources for SME’s in Armenia SEAF leveraged resources from a range of quasi-commercial sources including most prominently the Caucasus Growth Fund in Armenia. This regional fund, for Armenia, Azerbaijan and Georgia, is capitalized at $46 million. SEAF-Armenia managed these funds, for its investors (EBRD and others), on a market rate basis, while achieving measurable socio-economic impacts in support of EDMC’s four value chains. In April 2012 the launch event of the SEAF Caucasus Growth Fund took place both in Tbilisi and Yerevan. The SEAF Armenia team in close cooperation with Value Chain and the Access to Finance teams then developed a strong pipeline of companies for equity investments in Armenia. The team also collaborated with a local investment company – Armenbrok – to better leverage local knowledge and local partner networks. SEAF successfully secured two equity investments. The first was $2 million financing for New Force LLC, a distribution company. This investment facilitates and enhances the company’s activity in Armenia and expansion to Georgia. In addition, more than $1 million was also leveraged from local investors for New Force’s expansion into regional markets. The second equity investment of $1.7 million in financing for EcoSpan, a chipboard factory, was also finalized.

Business and Technical Support of SEAF

MARKETING & - Develop marketing plans STRATEGY - Support marketing teams

GLOBAL - Introduce global business networks NETWORKING - Support export and import strategies OPERATIONS - Cooperatively identify areas for improvement ASSISTANCE - Facilitate visits by outside experts

- Identify new sources of financing ADDITIONAL - Leverage relationships with local banks FINANCING - Provide negotiation and contracting support - Business planning and budgeting FINANCIAL - Accounting and management information systems CONTROL - Facilitate hiring and training of CFO - Design of effective incentive structures CORPORATE - Board of Directors oversight GOVERNANCE - Legal structure

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Fostering Competitive Local Enterprises SEAF was dedicated to developing competitive local enterprises through its partnerships with SMEs, donors and other PFIs in Armenia. In this regard, SEAF provided its portfolio company, EcoSpan CJSC with technical assistance. The process of improvements in the area of management information systems as well as environmental requirements and compliance was launched. The SEAF’s Worldwide footprint operational reconstruction of New Force LLC business started as well. It included a review of organizational aspects, cash-flow policies and procedures as well as developing strategic solutions to difficult problems including the imported goods range. Fostering profitable, competitive local enterprises was a fundamental step in achieving sustainable economic development. SEAF’s partnerships with these

SMEs generated measureable results across a number of EDMC’s PMP indicators, increasing SEAF MINIMAL CRITERIA employment, salaries and exports. Min Revenue US$ 0.5 mln EDMC’s strategy included building local Max Revenue US$ 15 mln investment fund management capacity and helping facilitate permanent equity fund linkages Max No of Employees 250 people in Armenia through other international funds, Min Proven Track Record 2 years such as the new EBRD fund, the Black Sea Trade and Development Bank and the AIG New Europe Fund. Toward this goal, SEAF in partnership with EBRD hosted the first Private Equity conference for public, private and civil society organizations in Yerevan during the 4th quarter of year two. In addition the project conducted and publicly presented a feasibility study for Private Equity in Armenia, which was completed with Grant Thornton Armenia. EDMC supported the sustainability of equity fund efforts by the demonstration-effect impact of SEAF-sponsored investments and the related SEAF Investment signing. establishment of major institutional/investor linkages. Particuarly, One-on-one consultations were delivered for Armenbrok and Capital Asset Management to improve their asset management capacity. Ongoing Pipeline Development During Year 3 SEAF Armenia continued developing its pipeline through the search of potential investee companies eligible for the criteria set under the Caucasus Growth Fund. Around 20 potential companies were screened and analyzed. The most time-consuming and crucial process - financial due diligence - was completed on Viasphere Techno Park with IT accelerator. This project is considered as SEAF’s potential third equity investment in Armenia. The completion of this extensive task led to the start of deal structure development process. SEAF also identified a micro-finance funding opportunity (a Universal Credit Organization) for an additional potential equity deal.

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Appendix A: Financial Report, by Line Item CLIN 1 CLIN 2 CLIN 3 CLIN 4 (Develop more (Enhance (Improve (Facilitate Line Items productive workforce skills business effective Total enterprises and environment) financial Program and value entrepreneurial intermediation) chain development) management)

a. Direct Cost 2,873,928 1,051,564 3,024,482 1,455,446 8,405,420 Indirect b. Costs 1,210,788 149,041 1,049,529 848,930 3,258,288

c. Grants 189,792 42,176 147,616 42,176 421,760

d. Fixed Fee 213,725 62,139 211,081 117,328 604,273

Grand Total 4,488,233 1,304,921 4,432,708 2,463,880 12,689,741 Note: These are to-date billed amounts not the final.

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Appendix B: List of EDMC Stakeholders and Supported Companies

Company/Organization Contact Person E-mail Web Site Governmental Institutions Ministry of Economy Sergey Avetisyan, Deputy Minister [email protected] http://www.mineconomy.am Garegin Melkonyan, Deputy Minister [email protected] Emil Tarasyan, Deputy Minister [email protected] Ara Petrosyan, General Adviser to the [email protected] Minister of Economy Mekhak Apresyan, Head of Tourism [email protected] Department Naira Nikoghosyan, Head of IT and [email protected] Innovation Policy Department Ministry of Healthcare Sergey Khachaturyan, Deputy Minister [email protected] http://www.moh.am Ministry of Finance Vaghtang Mirumyan, Deputy Minister [email protected] http://www.minfin.am Ministry of Finance Makar Ghambaryan. Head of Department [email protected] http://www.minfin.am National Competitiveness Foundation of Arman Khachaturyan, Chief Executive Officer [email protected] http://www.cf.am Armenia (NCFA) Armenian Development Agency Robert Harutyunyan, General Director rharutyunyan@ ada.am http://www.ada.am Industrial Development Foundation Hayk Mirzoyan, Director [email protected] http://www.idf.am SME DNC Varazdat Karapetyan, Executive Director [email protected] http://www.mednc.am The State Commission for the Artak Shaboyan, Chairman [email protected] http://www.competition.am Protection of Economic Completion of RA (SCPEC) National Centre for Legislative Armen Yeghiazaryan, Director [email protected] http://www.regulations.am Regulation http://www.e-guillotine.am State Procurement Agency Arthur Arakelyan, Deputy Head of SPA [email protected] N/A Intellectual Property Agency Armen Asisyan, Head of IP Agency [email protected] http://www.aipa.am International and Donor Organisations The World Bank Ahmed Eiweida [email protected] http://www.worldbank.org Sector Leader, Sustainable Development South Caucasus Region IFC Armenia Investment Climate Arsen Nazaryan, Project Manager [email protected] Reform Project

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GIZ Mariam Babayan, Senior Advisor on [email protected] http://www.giz.de Competition Policy, Tourism and Investment Promotion Oxfam Margarita Hakobyan, Country director [email protected] http://www.oxfam.org.uk/ Business Support Office-Armenia at Gevorg Poghosyan, Head of Business Support [email protected] ww.bso.am EBRD Office-Armenia UNIDO Anahit Simonyan, Head of UNIDO [email protected] http://www.unido.org Operations in Armenia The American Chamber of Commerce Diana Gaziyan, Executive Director [email protected] http://www. amcham.am in Armenia Haifer International Anahit Ghazanchyan, Country Director [email protected] http://www.heifer.org/ CARD Foudation Gagik Sardaryan, Director [email protected] http://www.card.am Partner Financial Institutions Armbusinessbank (ABB) Vitaliy Grigoryants, CEO [email protected] http://www.armbusinessbank.am Ararat Bank Ashot Osipyan, CEO [email protected] http://www.araratbank.am Unibank Vardan Atayan, CEO [email protected] http://www.unibank.am Aregak UCO Mariam Yesayan, Executive Director [email protected] http://www.aregak.am GoodCredit UCO Artashes Tonoyan, CEO [email protected]/ http://www.goodcredit.am Armenbrok Aram Kayfajyan, CEO [email protected] http://www. armenbrok.com ACRA Credit Bureau Artak Arzoyan, CEO [email protected] http://www.acra.am Business Development Service Providers Global SPC Samvel Zakaryan, Executive Director [email protected] http://www.globalspc.com Grant Thoronton Gurgen Hakobyan, Partner [email protected] http://www.gta.am EV Consulting Manuk Hergnyan, Executive Director [email protected] http://www.evconsulting.am BSC Business Support Center LLC Samvel Gevorgyan, Director [email protected] http://www.bsc.am Ecoglobe LLC Nune Darbinyan, General Director [email protected], http://www.ecoglobe.am [email protected] Hai Consult Foundation Gagik Makaryan, Executive Manager [email protected] http://www.haiconsult.am ICARE Vardan Urutyan,COP [email protected]; [email protected] http://www.icare.am/ Integrated Management Solutions, IMS Artavazd Baghdasaryan, Director [email protected] http://www.ims.am Management Mix Suren Grigoryan, Executive Director [email protected] http://www.managementmix.com Narek Scientific Research Enterprise Raphik Harutyunian, President [email protected] http://www.narek.am CJSC Standart Dialog Artyom Mehrabyan, Director [email protected] http://www.standarddialog.com Vivat Counsulting Artur Khachatryan, Director [email protected] N/A Cascade Consultants Arpi Karapetyan, General Director [email protected] http://www.cascadeconsultants.am Monada Consulting LLC Hayk Lorikyan, Project Manager [email protected] http://www.credit.am Apricot Plus LLC Aram Tarakhchyan, Director [email protected] N/A

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Business Pareta LLC Artak Dadoyan, Executive Director [email protected] http:// www.bp.gcci.am “GXP” Centre of Excellence Aram Ghazaryan, Executive Director [email protected]; [email protected] http://www.gxp.am Development Principles Anna Arakelyan, Project Coordinator Armenian Young Women Association Lilit Asatryan, President [email protected] http://www.ayva.am Tourism Value Chain Vis-à-vis Tour Veronika Melkonyan, Director [email protected] http://www.visavistour.com "RUMEA" Tempting Trips Club LLC Ruben Grigoryan, General Director [email protected] http://www.rumea.am/ Five Stars Travel LLC Yeghishe Tanashyan, Manager [email protected] http://www.fivestars.am/ Armenia Travel+M Hayk Grigoryan, General Director [email protected] http://www.armeniatravel.am Hyur Service Avetik Afrikyan, Director [email protected] http://www.hyur.am Armen Tour LLC Armen Gyozalyan, General Manager [email protected] , http://www.armeniatour.com Armenia Holidays Rita Hakobyan [email protected] http://www.armeniaholidays.com Armenia Travel+M LLC Hayk Grigoryan, General Director [email protected] http://www.armeniatravel.am Amistad Tour LLC Armine Adamyan, President [email protected] http://www.amistad-tour.com Anitour LLC Volodya Arushanyan, Chairman [email protected] http://www.anitour.am Discover New Travel LLC Lilit Gevorgyan, Director [email protected] http://discovernewarmenia.com/en/ Funtour LLC Soghomon Grigoryants, Director [email protected] http://www.funtour.am Gandzasar Tour LLC Gurgen Ayrapetyan, General Director [email protected] http://www.gandzasartour.com Gardman Tour LLC Hayk Maghakyan, Director [email protected] http://www.gardmantour.com Geographic Travel Club LLC Anna Petrosyan, Co-Director, [email protected] http://www.geotravel.am Naira Grigoryan, Co-Director Levon Travel Yerevan LLC Anahit Papazyan, Director [email protected] http://www.levontravel.am Lucy Tour LLC Ani Hayrapetyan, Director [email protected] http://www.lucy-tour.com Magnolia Tours LLC Anna Sargsyan, Director [email protected] http://www.magnolia.am/en/ Prana LLC Gohar Aleksanyan, General Director [email protected] http://www.pranatour.am Sidon Travel & Tourism LLC Gevorgyan Lilit, Director [email protected] http://www.sidontravel.am Sputnik Travel Suren Hakobyan, President [email protected] http://www.sputnik.am Travelon LLC Larisa Mkoyan, Director [email protected] http://www.travelon.org Dian Hotel, Kapan, Syunik Region Vachagan Galstyan, Managing Director [email protected] http://www.hoteldiana.am Lalaner LLC, Sisian, Syunik Region Robert Vasilyan, Managing Director [email protected] http://www.lalahotel.am Mi and MAX LLC, Hotel Armen Movsisyan, Director [email protected] http://www.mimaxhotel.info SH Resort and Tours Hasmik A. Israyelyan, Director [email protected] http://www.armhotels.am Khustup NGO Vladik Martirosyan, President [email protected] N/A Syunik NGO Vladimir Grigoryan [email protected] http://www.Syunikngo.com Armenian Ecotourism Association Zhanna Galyan,President [email protected] http://www.ecotourismarmenia.com/ Armenian Guides Guild (AGG) Svetlana Sargsyan, President [email protected] http://www.armenian-guides.am UITO Aleksan Zakyan, Director [email protected] http://www.touroperator.am

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Armenian Monuments Awareness Richard Ney, President/CoP [email protected] Project (AMAP) ARMHOTELS (TBS) Ruben Grigoryan, Director [email protected] http://www.armhotels.am Tatev Revival Foundation (TRF) Vahe Baghdasaryan, Community [email protected] http://www.trf.am Development Manager Homeland Handicraft Development Anahit Mkhoyan, Executive Director [email protected] http://www.berdbears.com/ Initiative Foundation (HDIF) Areni Fest Foundation Nune Manukyan, Director [email protected] http:// www.armenianwinefestival.am Deem Communications Raffi Niziblian, Creative Director [email protected] http://www.deemcommunications.com Food Processing Value Chain Alishan LLC Vardan Movsisyan, Director [email protected] http://www.alishan.am Armavir Cannery "Levon" LLC Davit Harutyunyan, Director [email protected] N/A Artashes LLC Artashes Gasparyan, Director [email protected] http://artashes.am/main.html Artur & Edita LLC, Jujevan Cannery Aramayis Chilingaryan, Director [email protected] N/A Avshar Prod LLC Samvel Ghazaryan, Director [email protected] http://avsharprod.info.am Byurakn LLC (Aygi) Artashes Sargsyan, Director [email protected] N/A Eco Garden Corporation LLC Samvel Makaryan, Director [email protected] N/A EUROTERM CJSC Mary Ghazaryan, Executive Director [email protected] http://www.euroterm.am Konser LLC Hamlet Avagyan, Director [email protected], [email protected] http://www.konser.am Lchkadzor LLC Ruslan Antonyan, Director [email protected] N/A MAGA Cannery LLC Nerses Stepanyan, Director [email protected] N/A MAP CJSC Makar Petrosyan, Director [email protected], [email protected] http://www.map.am Meghry Cannery CJSC Grisha Grigoryan, Director [email protected] http://www.megricann.info.am MMM Food LLC Mkrtich Minasyan, Director [email protected] N/A Nicola International LLC (Ayello Edgar Kharatyan, General Manager [email protected] http://www.aiello.am Cannery) Proshyan Brandy Factory OJSC Armen Gasparyan, Director [email protected], http://www.proshyan.am Ragmak LLC Artyom Harutyunayan [email protected] N/A Shamb Business LLC Amalia Stepanyan, Director [email protected] http://www.shamb.am SIS Natural Armen Hakobyan, President [email protected] http://www.sisnatural.am Tamara Fruit LLC Davit Harutyunyan, Director [email protected] http://www.tamara-fruit.com/ru/ Talin Food LLC Gagik Karapetyan, Founder and Director [email protected] Yerevan Garejur CJSC (Kilikia Cannery) Ashot Baghdasaryan, Director [email protected] http://www.kilikia.am Yervandashat Arkadi Khachikyan, Director N/A Sisiani Hats LLC Ishkhan Mirzoyan, Director [email protected] N/A BORODINO Preserve Company Vardan Margaryan, Executive Director [email protected] Astkhunk LLC Tsolvard Gevorgyan, Director [email protected] N/A Cheer CJSC Tigran Tsaturyan, Director [email protected] N/A

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Gyughi Tatik LLC Vera Zakaryan, Director [email protected] N/A Nor Aygee Samvel Sukiasyan, Director [email protected] N/A Bio Universal LLC Tigran Sahakyan, President [email protected] http://www.manana.am ABDA LLC Gevorg Abrahamyan, Director [email protected] http://www.mountaintea.am AMARTEA LLC Ruben Bunatyan, Technical Assistant [email protected] http://amartea.am/ ASVA RAF LLC Vache Asryan, Ruzanna Asryan [email protected] http://www.asvaraf.com Bizon 1 LLC Suren Harutyunyan, Director [email protected] http://www.bizon-1.info.am Hagenas LLC Khachik Gevorgyan, Director [email protected] http://www.armhagenas.am INSI NTK CJSC Zaruhi Andriasyan, Director [email protected] http://insi.am/ Lernayin Tsaghik LLC Roman Hovhannisyan, Project Manager [email protected] N/A NectarBonus LLC Narine Malyan, Director [email protected] http://www. nektarbonus.com New Technologies Center NGO Andrias Esayan, President [email protected] http://www.insi.am Samelon LLC Suren Chilikyan, Commercial Director [email protected] N/A Samush Systems CJSC Hovhannes Zakaryan, Deputy Director [email protected] N/A Verde Pharm LLC Nelli Avetisyan, Director [email protected] N/A Bio-Pharmaceuticals Value Chain Liqvor LLC Sergey Matevosyan, Director [email protected] http://www.liqvor.com Arpimed LLC Vachagan Ghazaryan, General Director [email protected] http://www.arpimed.am Pharmatech LLC Vahan Arushanyan, Executive Director [email protected] http://www.pharmatech.am Esco Pharm LLC Ashot Gasparyan, Executive Director [email protected] http://www.esculap.am Medical Horizon LLC Shahe Kasis, Executive Director [email protected] http://www.medicalhorizon.am Vitamax E LLC Eduard Dilanyan, Executive Director [email protected]; http://www.vitamaxe.com Yerevan Chemical-Pharmaceutical Firm Shiraz Matevosyan, Executive Director [email protected]; OJSC [email protected] Bio Chim Ashot Avetisyan, Director [email protected] http://www.biochem.am Tonus Les LLC Levon Hakopyan, Executive Director [email protected]; http://tonusles.am [email protected] Darmatest Laboratories Hasmik Abrahamyan, Executive Director [email protected] http://www. pharmatestlabs.com Medicine Producers and Importers Samvel Zakaryan, Executive Director [email protected] http://www.pharunion.am Union (MPI Union) Pharmexpert Market Research Center Anaida Aghalaryan, Director [email protected] http://www.pharmexpert.ru Drug Agency, Scientific Center of Drug Hakob Topchyan, Director [email protected] http://www.pharm.am and Medical Technology Expertize Information Technologies Value Chain Enterprise Incubator Foundation (EIF) Bagrat Yengibaryan, Director [email protected] http://www.eif.am Union of Information Technology Karen Vardanyan, Executive Director [email protected] http://www.uite.org/ Enterprises (UITE) Microsoft Innovation Center (MIC) Yeva Hyusyan, Director [email protected] http://www.micarmenia.am

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Volo LLC Ruben Markosyan, Project Manager [email protected] Idram LLC Gayane Stepanyan, Director [email protected] http://www.idram.am Bever Computers LLC Boris Aghajanyan, Director [email protected]; [email protected] FinTransNet LLC Narek Vardanyan, Project Manager [email protected] http://www.idram.am E-Works LLC Khachatur Badalyan, Director [email protected] http://www.e-works.am Globalar LLC Alexander Alexandryan, Project Manager [email protected] http://www.globalar.com Altacode LLC Edgar Hambaryan, Executive Director [email protected] http://www.altacode.com Apaga Technologies CJSC Michel Davoudian, Director [email protected] http://www.apaga.am, Armenian Datacom Company CJSC Vardan Kopyan, Acting Director www.adc.am http://www.adc.am Armix Armenian Internet Traffic Vahan Hovsepyan, Director [email protected] http://www.armix.am Exchange Foundation ATS-Association of Technologic Arik Shahumyan, Director [email protected] http://www.shahumyanmedia.com Startups Be-Interactive LLC Vahram Martirosyan, Director [email protected] http://www.beinteractive.am Best Soft CJSC Harutyun Margaryan, Director [email protected] http://www.bestsoft.am Bet Construction LLC Suren Khachatryan, Director [email protected] http://www.betconstruct.com CompTechArm Ltd Vahram Harutyunyan, Director [email protected], http://www.comptech.am CrossNet LLC V. Aleksanyan, Director [email protected] http://www.cross.am D-Link International Ltd Armen Shahnazaryan, Director [email protected] http://w.dlink.am Essential Solutions LLC Garik Petrosyan, Director [email protected] http://www.essentialsln.com Fainberg Marketing and Branding LLC Mariam Fainberg, Director [email protected] http://www.fainberg.com Find LLC Smbat Marikyan, Director [email protected] http://www.find.am Gagat LLC Slavik Zakharyan, Director [email protected] http://www.gagat.am Gallery Systems CJSC Anna Yengibaryan, Director [email protected] http://www.gallery-systems.com Gyumri Information Technologies Amalia Yeghoyan, Director [email protected] http://www.gitc.am Center (GITC) GNC Alfa CJSC Hayk Faramazyan, General Director [email protected] http://www.rtarmenia.am Hybrid Solutions LLC Samvel Majaryan, General Manager [email protected] http://www.hs.am Imex Group LLC Rafael Manucharyan, Director [email protected] N/A Innovative Solutions Yanis Muzakis, Director [email protected] http://www.insol.am Instigate LLC Arman Poghosyan, CEO [email protected] http://www.instigatedesign.com Instigate, Gyumri Brunch Artur Mkrtchyan, Director [email protected] http://www.instigatedesign.com Instigate Traning Center Foundation Gohar Grigoryan, CEO [email protected] http://www.instigate-training-center.am Integrator LTD Sergo Melikyan,Director [email protected] http://integrator.am Interactive World LLC Tigran Bayramyan,Director [email protected] http://www.iworldarmenia.com IP Marketing LLC Arsen Sultanyan, Director [email protected] http://www.ipmarketing.am IPR Center Karen Manukyan, Executive Director [email protected] http://ipr-center.org IPR NAS Aram Papoyan, Director [email protected] http://ipr.sci.am

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IT Micronetworks LLC Vahagn Harutyunyan, Director [email protected] http://www.it-micronetworks.am Key Solutions LLC Davit Sahakyan, President [email protected] N/A LanAr Service LLC Tigran Danielyan, Director [email protected] http://www.lanar.am Liga Tech LLC Arsen Abrahamyan, Director [email protected] http://www.ligatech.am/en/index.php Locator CJSC Vladimir Sofyan, Commercial Director [email protected], http://locator.am Macadamian AR CJSC Sophie Mehrabyan, General Manager [email protected] http://www.macadamian.am Mentor Graphics CJSC Irina Dumanyan, Executive Manager [email protected] http://www.mentor.com Microsoft RA LLC Grigor Barseghyan, Director [email protected] http://www.microsoft.com mLab ECA Foundation Bagrat Yengibaryan, Director [email protected] http://www.mlabeca.com Monitis CJSC Mr. Hovhannes Avoyan, General Manager [email protected] http://www.monitis.com Mush-Technologies LLC Aram Khachatryan, Director [email protected] www.mush-tech.com Nairi Tech LLC Grigor Babayan, Director [email protected] http://www.nairi-tech.com Navigator LLC Vladimir Sofyan, Commercial Director [email protected] http://navigator.am/ Norma Plus LLC David Markosyan, Director [email protected] http://www.norma.am Orange Armenia Francis Gelibter, CEO [email protected] http://www.orangearmenia.am Project Integration LLC Mr. Vardan Aleksanyan, Director [email protected] http://www.pintegration.org Proximus DA CJSC Vahagn Poghosyan, Director [email protected] http://www.proximusda.com RAFA Solutions LLC Rafayel Ghasabyan, Director [email protected] http://www.rafasolutions.com RAU Businnes Incubator Davit Sahakyan, Executive Director [email protected] http://www.inecbus.rau.am Redinet CJSC Karen Kondyan, CEO [email protected] http://www.redinet.am Shahumyan Media LLC Arik Shahumyan, Director [email protected] http://www.shahumyanmedia.com ShirakInfo LLC Ruben Galstyan, Executive Director [email protected] www.shirakinfo.com Sitronics CJSC Arman Sargsyan, Executive Director [email protected] http://www.raomars.com Sourcio CJSC Hovhannes Avoyan, CEO [email protected] http://www.sourcio.com Synergy International Systems Artur Hovhannisyan, Regional Representative [email protected] http://www.synisys.com Telcell CJSC Aram Azatyan, Director [email protected] http://www.telcell.am Tonex LLC Gevorg Davtyan, Director [email protected] http://www.tonex.am Tumo Center Marie Lou Papazian, Managing Director [email protected] http://www.tumo.org Tumo Design LLC Vigen Tumanyan, Director [email protected] http://www.tumo.am UniComp CJSC Armen Baldryan, CEO [email protected] http://www.unicomp.am Unisoft Development LLC Vahe Marajyan, Director - http://www.unisoftdevelopment.com Universal Systems LLC Amen Hayrapetian, Director [email protected], [email protected] http://www.uni-sys.eu Van Technologies LLC Hakob Gevorgyan, Director [email protected] http://yea.am/ Viasphere Technopark CJSC Varoujan Masarajian, General Manager [email protected] http://www.viasphere.com Vipma LLC Artak Mikaelyan, President [email protected] http://www.vipma.am Webb Fountaine Holding Ltd Andranik Saratikyan, Director [email protected] http://www.webbfontaine.am Webex Technologies LLC Hayk Arakelyan, Director [email protected], [email protected] http://www.webex.am X-Tech LLC Arman Atoyan, Director arman.atoyan@x-tech@am http://www.X-TECH.am

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YCRDI CJSC Arsen Taroyan, Director [email protected] http://www.ycrdi.am YeTRI CJSC Mher Markosyan, Director [email protected] http://www.yetri.am 3D Modelling Union Gurgen Paronyan, Chairman [email protected] www.3dm.am A-2 LLC Arkadiy Khitarov, Director [email protected] http://www.a2ltd.am ANI-Test CJSC Mihran Poghosyan, Director [email protected] www.ani-test.am AR and AR design construction LLC Ara Petrosyan, Director [email protected] http://www.ar-ar.am Arbumprom Industrial Association LLC Garegin Orbik Isakhanyan, General Director [email protected] http://www.arbumprom.am ArtinVaroujhan Varujan Abrahamians, M.D. [email protected] http://artinvaroujan.am Bitlis Men LLC Samvel Minasyan, Director [email protected] www.bitlis-men.com Electrosevkavmontag Tigran K. Grigoryan, Chief Executive Officer [email protected] http://www.armeskm.am Genargo Ltd Henri Adilkhanyan, Director [email protected] N/A HATUKELECTRAMONTAGE OJSC Vladimir Yesayan, Director [email protected] http://www.hem.am Hydroenergetica LLC Inessa Gabayan, Director [email protected] http://www.armhydro.com Interstanok design Vili Dolukhanyan, Director [email protected] N/A Lime Tech LLC Gevorg Safaryan, Director [email protected], http://www.limetech.am MIKA PROGRESSTECH Roman Ramazanov, Director [email protected] http://www.mikaprogresstech.am National Instruments, Armenia Branch Aram Salatyan, Director [email protected] http://www.ni.com/armenia OLYMP Engineering LLC Orbel Sevoyan, Director [email protected] http://www.olympengineering.com Ovak Technologies LLC Robert Hovakimyan, Director [email protected] http://ovaktechnologies.com Pegasus Logic LLC Manuk Shemsyan, Director [email protected] http://www.pegasuslogic.com Shaber design Lyudvig Mikaelyan, Director [email protected] http://www.malver.net Symotec Ltd Hrachya Khachatryan, Executive Director [email protected], [email protected] http://www.symotec.am Technoatomenergo Petros Arakelyan, General Director [email protected] N/A Technoeco Mikhail P. Martirosyan, Director [email protected] http://www.technoeco.am ArmAudioBooks LLC Mariam Dilbanyan, Director [email protected], http://www.askaudiobooks.am, [email protected] http://www.askaudiobooks.com TECTVM Anahit Manasyan, Director [email protected] http://www.tectvm.com MyNews Seda Muradyan, Director [email protected] http://www.mynews.am NEST Innovations Raffi Elliot, Director [email protected], [email protected] http://www.thenest.am

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Appendix C: EDMC Value Chain Maps

PHARMACEUTICALS VALUE CHAIN COUNTERPARTS

Governmental Institutions

Ministry of Healthcare Ministry of Economy (Coordination of Sector Development Policy, Strategy and (Coordination of Export-Led Industrial Policies) Projects)

Scientific Centre of Drug and Medical Donor Projects and Armenian Development Technology Expertise Activities Agency

Yerevan State Medical

University

Yerevan State University Medicines Producers and Importers Union (MPI Union) Yerevan Engineering University

Haybusak University and Private Armenian Pharmaceutical Small Private Universities Association Centers Education Companies Medical Colleges

R&D & R&D

GXP Center of Excellence

Laboratories

Scientific Research Institutes Supporting Associations Institutions, Universities,

PHARMACEUTICALS VALUE CHAIN MAP

Export Market Channel Domestic Market Channel

Foreign Importers Wholesalers Pharmacies Hospitals

Medicine registration foreign institutions

Medicine registration local institutions (Drug Agency and MoH)

Medicine and dietary supplements production companies

Imported raw materials controller (Drug Agency and MoH)

Plant Dairy processing Raw Material suppliers Supplementing Material suppliers companies (API, excipient , etc ) (Packaging, bottles, design, etc.)

0

TOURISM VALUE CHAIN COUNTERPARTS

Governmental Institutions

Ministry of Economy National Competitiveness (Coordination of Hospitality Sector Development Policy, Strategy Foundation of Armenia and Projects) (Coordination of Government Strategy Implementation Activities)

Armenian Development Agency Donor Projects and Activities

Armenian Tourism Institute Union of Incoming Tour Operators

Yerevan State University Private Armenian Guides Guild Companies

Yerevan State Linguistic University American Society of Travel Agents Universities, Education Universities,Centers Education Supporting Institutions, Associations Supporting Associations Institutions,

TOURISM VALUE CHAIN MAP

0

FOOD PROCESSING VALUE CHAIN COUNTERPARTS

Governmental Institutions

Ministry of Agriculture Ministry of Economy (Coordination of Sector Development Policy, Strategy and (Coordination of Export-Led Industrial Policies) Projects)

State Service for Food Safety Donor Projects and Armenian Development SME DNC Activities Agency

Armenian Agriculture

University

Armenian Agricultural Alliance ICARE

Armenian Harvest Promotion Center Private Union of Agricultural Cooperatives Centers Education Companies Food Laboratories

& R&D Dried fruit Producers Association

Scientific Research Institutes

Supporting Institutions, Associations Supporting Associations Institutions, Universities,

FOOD PROCESSING VALUE CHAIN MAP

Domestic Market Export Market Channel ChannelDomestic Market Channel Supermarkets Small shops Foreign Importer Local On-line Foreign Companies Companies Stores Brokers, Brokers, Transportation Intermediaries Intermediaries Companies Local Brokers, International Intermediaries Brokers

Post harvest handling HFV processing companies service providers (Producers: Canneries & Juice, (Collection Centers, Cold Storages, Dry F&V, and Herbal) Consolidation Centers)

HT COMPANIES Software Developers Distributors of fresh HFV to Supplementary material producers processing companies (Jars, Food ingredients, boxes, packaging Courier/Postal Service Providers materials etc.) Suppliers Raw material producers (Individual farmers, cooperatives, Informal groups of farmers) Hardware Suppliers 1 Fresh Food Processed Food Supplementary materials

INFORMATION TECNOLOGIES VALUE CHAIN COUNTERPARTS

IT Development Support Ministry of Economy E-Governance Infrastructure Council - ITDSC (Coordination of IT Sector Development Concept Implementation Unit (Bridge between government, Implementation Activities) (Coordination of e-Government Strategy implementation activities)

public and private sectors) Armenian Development Agency Donor Projects and Activities Governmental Institutions

State Engineering University Enterprise Incubator Armenia Foundation Gyumri Yerevan State University Economic American University of Develop. Armenia Foundation European Regional Academy Union of IT Enterprises - UITE

Russian-Armenian University Other Universities 3D Modelling Union Technology Transfer Association

High Tech Start- up Association Viasphere Microsoft Innovation Center Armenia Technopark Internet Society - ISOC Arm.-Indian Centre for Excellence in ICT SMEs & Key E-Content Develop. Association Regional Mobile Application Lab ECA Companies Gyumri Technopark Intellectual Property Rights Center Sun Microsystems Dev. & Testing Labs Harmony IT & Educ. Develop. Fund CISCO Networking Academy IT Arm. Association of Park D-Link R&D Regional Center Telemedicine Gyumri Information Technologies Center

DigiTec Competitions and Contests Expo

National Academy CentersUniversities, & Education R&D - Armrobotics - Open Championship TUMO ArmTech Center for of Sciences - Open Programming Competition Congress - International Microelectr. Olympiad Creative (Divisions of Mathematical and - Science & Tech. Entrep. Program Techno Technical Sciences; & Events Supporting Associations Institutions, ICT - Educat. Award of President of RA

logies Physics and Leaders - Imagine Cup Armenia Astrophysics) Meeting - Business Idea Open Contest - Open Game Development Contest DigiTec - ARPA Inst. Invention competition Forum

INFORMATION TECNOLOGIES VALUE CHAIN MAP

Domestic Market Channel Export Market Channel

Local Foreign Companies On-line Mother Companies Stores Companies

Local Brokers, Foreign Intermediarie Importers s

Internet Courier/Postal Service Service Providers Providers

High Tech Companies (Software Developers, Hard & Soft Developers, Hardware Developers)

Internet Courier/Postal Service Service Providers Providers 2 Software Suppliers Hardware Suppliers

USAID Enterprise Development and Market Competitiveness (EDMC)

Imperium Plaza Business Center, 4th floor

4/7 Amiryan Street, Yerevan 0010 Armenia

Tel: +374 60 51 61 00

E-mail: [email protected] www.edmc.am 3