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Sara Petrosyan

EU Financing: Armenia’s Government Not Always Answerable to Donor Organization

“The European Union is a large financial donor for Armenia. Every week I sign off on one million Euros for government and non-government institutions in Armenia,” said Pyotr Svitalsky, who heads the EU delegation in Armenia, one month ago.

Let’s start by saying that this announcement was unexpected for citizens of Armenia given that prior to this the public in Armenia had no idea regarding the amount of grants received from the EU and, with some exceptions, neither about who the funds have been allocated to.

Hetq conducted a study of EU grants to government agencies in Armenia over the past five years – what sectors were financed, the amounts in question, and how transparent management of these grants has been.

Our study has shown that from 1992 until today, the EU has allocated more than 500 million Euros to Armenia. EU financing of projects in Armenia has been via technical and budgetary support. Two branches of the Armenian government have received continuous EU financing – the executive (ministries and their affiliated agencies), and the judiciary (the justice ministry and judicial department).

Individual programs of the Armenian government have been assisted via international advisers and the financing of various events and trips overseas. The latter have been for a variety of organized educational seminars and training courses.

Reforms in Armenia, for the most part, are implemented with grants provided by the EU. The sectors involved include the police, correctional facilities, manufacturing, education and agriculture. In addition, the EU assists the democratization process and reforms regarding human rights.

Armenia’s Ministry of Economics coordinates all technical and budgetary support allocated by the EU to Armenia. One of the preconditions for being eligible for budgetary support is that a country’s budgetary process is transparent and subject to oversight.

Noted in the website of the EU Delegation to Armenia one can find the programs that have been completed and are now being implemented. Hetq’s study on the matter, however, has revealed that information on EU grants to state agencies in Armenia over the past five years is nearly impossible to access by the public. In the main, one is hard pressed to find out just how efficiently those funds were targeted and spent.

In response to our inquiry, the EU’s Delegation to Armenia stated, “The EU pays a lot of emphasis in guaranteeing that all of our grants are used efficiently.” It also stated, “The EU also pays much emphasis into analyzing and contributing to reforms in the field of public finance, in order to improve accountability of the use of public funds.”

In its response, the EU delegation warns that any serious charges of corruption of the state budget could affect Armenia's eligibility to budget support funds.

So, what programs did the EU finance from 2010-2015? To what degree was the public in Armenia made aware about these programs? How were those funds spent? Are there any accounting reports?

To get some answers, Hetq went to the recipient government agencies. Not all executive or judicial agencies answered our inquiries. Even when we put our inquiries in writing, which in some cases took more than one month to answer, the Armenian Government and the Ministry of Territorial Administration and Emergencies, never even bothered to respond. Other ministries, only after receiving our questions, published some scanty data in their websites. Others only provided the titles and amounts of the programs.

Thus, Hetq wasn’t able to answer the most important question – what has actually been achieved, in practical terms, as a result of these EU-financed programs? What surmountable and insurmountable challenges cropped up? Who actually benefited? To what degree were the envisaged reforms ever achieved?

Armenia’s Ministry of Transportation and Communications, for example, responded that it had not implemented any EU-financed programs during 2010-2015.  However, there is a full article in the Armenia-European Union Action Plan agreement devoted to the transportation sector. The Police of Armenia tried to convince Hetq that it had no data on the amount of EU financing it had received. Currently, Armenia’s Judicial Department is carrying out two EU-financed programs. Surprisingly, staffers there said they didn’t know the amount of funds allocated.

Thus, for the most part, the state agencies Hetq studied have no interest in publishing comprehensive information regarding the financial support they have received. In certain cases, such information is sporadic; even if a written request is filed. One can find systematized information in the websites of one or two state agencies, but the frequency of their updates is suspect.

Despite this, the EU continues to graciously allocate funds to Armenia. This largesse is gradually growing, even though Armenia failed to sign the association agreement with the EU. Armenia even received funds from the EU for the association process.

Armenia’s Ministry of Justice is carrying out numerous EU-financed programs. From 2009-2011, the ministry conducted the Support for Access to Justice in Armenia program with EU funding. The total budget of this program, designed to strengthen the rule of law and defense of human rights, is 18 million Euros. Component 2 of the above program, designed to support the improvement of training and education of judges and court personnel, according to Armenia’s legal and judicial reform strategic program, has been scheduled for 2014-2016. The overall budget is estimated at 29 million Euros. However, given the fact that the ministry has yet to incorporate transparency into its work ethic, how will accountability be realized?

Armenia’s Ministry of Agriculture is included in several programs implemented with EU support. However, there is no information on these programs to be found in the ministry’s website. In January 2015, the European Neighbourhood Program for Agriculture and Rural Development (ENPARD) was launched in Armenia. The 36 month program is financed by the EU (25 million Euros) and the Austrian Development Agency (1 million Euros).

The above projects are carried out via the UN Food and Agriculture Organization (FAO), the United Nations Industrial Development Organization (UNIDO), and the United Nations Development Program (UNDP)???. It is important to note that the UNDP failed to respond to several Hetq requests for information on programs already completed. It advised us to get in touch with the ministry of agriculture. The ministry’s website has no reporting regarding program finances. Such information can only be obtained by sending a written inquiry. Even then, one shouldn’t expect any detailed data.

Even Armenia’s Human Rights Defender’s (HRD) Office sees no need to be accountable to the public regarding its EU-financing. Such reports are sent to the government and are published in official bulletins. Regarding the publication of the accounting for these programs, as the HRD Office informed Hetq, government projects were formed to spend these funds in which the nature and objective of the expenditures were noted and sent to the grantor organization. Once decisions were passed, they were published on the Armenian government’s website and in official bulletins. Cost expenditure reports were also published in the decisions adopted by Armenia’s National Assembly regarding yearly national budgetary performance data.

Given this, the result of our inquiries has been that information was provided for certain programs and that some ministries were obliged to slightly update their websites. However, information regarding monitoring of the completed programs and their activities was never made public. In essence, when we summarized the answers received, one fact became clear – the ministries are accountable to the government. As it turns out, the government, in turn, is not always answerable to the grant donor; the EU. The public, in whose name the envisaged reforms are being carried out, is mostly left out of the equation.

Hetq posed the following question to the EU Delegation to Armenia:

“What is your position regarding the fact  that state bodies and various institutions do not publicize any information about the management of EU grants  totaling hundreds of millions of Euros?”

Their response was:

“The EU stands for transparency and accountability. All EU grants are published online. All Annual Action Programmes to Armenia are published online…Having said that, indeed, Financing Agreements signed between the European Union and the Republic of Armenia are seldom published, although interested civil society partners are regularly invited to steering committees of the given programmes. In order for these Agreements to be published, both parties need to give their consent. Naturally, the EU is in favour of publishing of information related to the EU-funded projects.”

What is interesting is that the EU is so tolerant regarding the Armenian government’s non-transparent work ethic and that the EU cannot even publish the content of agreements without the consent of the government. On the other hand, there is no international donor, including the EU, which is so lax when it comes to demanding financial and progress reports from NGOs.

Given this state of affairs, who should be blamed for the slow reform process and the lack of tangible results in sectors that continue to receive financing? Who should be blamed for the fact that sectors requiring real reform are being neglected while others are funded to the hilt?

Is the public to be blamed because it doesn’t know about the huge amounts that have gone to improving the education sector that has, as a result, gone to hell in a hand basket?

It’s understandable that the Armenian government is not interested in publicizing such financing agreements. It shies away from being held accountable. But the public has a right to know how and to what end such funds are being used. Only with such knowledge can the public ascertain whether such programs have made any positive change in their lives.

Thus, the public at large must demand that both parties of the grant equation come clean and provide comprehensive information on such programs.  The government of Armenia must also be obligated to publish comprehensive program reports starting from the point when it argues in favor of financing for any sector. Information as to program objectives, activities, deadlines, semi-annual and yearly financial accounting, program audits, achievements and failures,  must appear in the websites of the implementing state agency.

Finally, the public must be afforded the opportunity to offer feedback on these processes.

Top photo (from right): Pyotr Svitalsky, Head of  EU delegation in Armenia, and RA President Serzh Sargsyan 

This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of “Investigative Journalists” NGO and can in no way be taken to reflect the views of the European Union. 

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