Wants vs. Needs

Another month, another existential crisis for Armenia.  This time, the story goes, a few people “sold” Armenia for $300 million (well, at least some had the presence of mind to say that the ruling party sold Armenia’s last remaining 20% of energy independence for $300 million).  Adding this to the about-face on EU vs. Customs Union (first announced in September, confirmed in early December and whose roadmap was approved yesterday in Moscow), Facebook is humming with accusations of loss of sovereignty and independence, singling out of traitors, and general despair.

There’s no question that the sale of the remaining 20% stake in ArmGazprom (the local arm of Russia’s giant state-controlled natural gas provider) is a negative milestone in the history of our young republic – as is any loss of economic or infrastructural independence.  And entering any union whose other members are Russia, Kazakhstan, Belarus and potentially Ukraine and Kyrgyzstan doesn't exactly inspire confidence.  But the story didn’t start, or doesn’t end, here.  The reality is we need to import gas, and we’ve cornered ourselves into total reliance on Russia (by the way, we’re not alone in this predicament).  The price for Artsakh’s independence is the exclusion of Armenia from the growing list of pipelines and routes designed to weaken Moscow’s hold on energy distribution in the region.  The real failure in this case is not geopolitical – the real failure is in the short-sightedness and the refusal to invest seriously in alternative energy sources, especially given the 320 days of sunshine per year and ample water and wind energy available for harnessing throughout our 42,000 km².

This latest series of events highlights a deepening chasm between what Armenians want, and what Armenia needs.  The more we fall into the trap of focusing exclusively on blaming the existing government, the less we can hope to take the series of steps required to put us back on the right track.

Here’s what Armenians want:

1. Fair, democratically elected government (and the dismissal and punishment of current officials)
2. Independent judiciary and law-enforcing law enforcement
3. The end of monopolies and pro-oligarchic actions by the government
4. The growth of civil society and well-established civil liberties for all, especially vulnerable social groups
5. A government who takes concrete actions to fight poverty and inequality (creation of an adequate social safety net)
6. The end of emigration
7. Recognition of the Armenian Genocide by a majority of important nations
8. Reparations for the Genocide

Here’s what Armenia needs:

1. Safe and secure borders
2. Un-interrupted energy security until ...
3. … significant investment in alternative energy infrastructure (solar, wind, bio-fuels, hydro) creates some form of energy independence
4. 200 top-notch university-level educators in high-impact/high-potential fields (alternative energy, agriculture, architecture, civil engineering, software development, cloud computing, cryptography, analytics, big data, applied physics, material science, applied mathematics, various branches of medicine)
5. 1000 experienced product managers and business development experts focused on the global IT and other export-oriented sectors and services
6. 1400 young and dedicated volunteers (one for each public school in Armenia)
7. 1000 summer volunteers to lead national identity-focused summer camps for local and diasporan children
8. 300 experienced farmers from the San Joaquin valley (since I'm partial to California) to introduce modern agricultural techniques throughout Armenia and Artsakh (basically one for every 3 communities/villages)
9. 100 experienced physicians, across specialties, to set up regional centers of excellence in cardiology, pediatrics, advanced cancer care, imaging, minimally-invasive surgery, cosmetic/elective surgery, and treatment of various chronic diseases
10. Export consulting firms who can help Armenian small and medium-sized enterprises (SMEs) get maximum benefit from the new Customs Union (for all that’s wrong with this Union, it does represent a customs-free market of over 200 million consumers for Armenian products)
11. 5 more Ruben Vardanyans, Eduardo Eurnekians, Sam Simonians, Gerard Cafesjians and Hrair & Edele Hovnanians (to name a few)
12. 5 fewer oligarchs (fill in your favorite nicknames here: ______, ______, ______, ______ , _____)
13. Additional venture funds to join the newly-created Granatus Ventures to funnel capital to the most promising Armenia-based start-ups
14. Annual financial commitment of $500 from every Armenian family with the means to give (and much more serious commitment from 100,000 affluent Armenians) – which will create a $1 billion annual investment fund for infrastructure and economic development for the country

Of course, neither list is complete – the point is that social, economic and judicial reform will not take us out of the current predicament. We – and by we I mean ALL Armenians – need to invest in the future of this country.  This investment will take different forms for different people, from simple financial support, to promoting “Made in Armenia” goods and services, to encouraging friends and relatives to visit Armenia and contribute to the growth of tourism, to considering various levels of engagement in Armenia, whether it’s to study or volunteer here, to start a global business based here, to join the growing number of progressive local organizations full of talent that require the right “bridge” to access global markets, to ease into retirement by teaching the next generation of architects, physicians, engineers here … you get the picture.

This is NOT to say that the list of wants above isn’t valid or important – merely to say that if we think rationally through the spectrum of challenges we face, we must focus on those levers that create economic value, which in turn creates economic independence, and ultimately separates geopolitical necessities from internal and national aspirations. 

Let me close with this:  if each of the 5 super-wealthy Armenians named above gave $20 million, it would leave $200 million to pay off the $300 million debt to Gazprom for the previous years' subsidies – that's $100 for every Armenian family around the world.  That's the real price of independence.

Building a New Reality

On a cold and foggy winter Sunday in Yerevan, best suited for a ski-trip to Tsakhkadzor, or better yet, a lazy afternoon reading at home, I joined 150 young professionals at TUMO Center at the inaugural ProductCamp Yerevan (www.productcampyerevan.org) for a truly memorable day.

Armenia’s IT industry is often referred to as deep in Electronic Design Automation (chip design for the rest of us), development outsourcing, and [more recently] the occasional mobile app.  So seeing 150 young IT and non-IT professionals, representing nearly 60 organizations, gather together for an entire Sunday on product management was, to say the least, pleasantly surprising.

Why?  Because product management is fundamentally a new discipline for this country.  It encompasses everything from ideation, concept definition, market and demand analysis, business plan/business case development, development plan, marketing and sales plan, and go-to-market execution – essentially the full R&D and commercial execution of a product or service idea.  Commercialization, especially on an international/global scale, is something usually seen as beyond the reach of those based here.

Today’s sessions proved that this is not the case.  ProductCamp Yerevan was overseen by execs from Ginosi.com, a global internet business headquartered in Armenia.  Several participants have significant experience developing and delivering global products from here.  What’s more important, audience members understood and accepted that there is a viable path to succeeding beyond the borders of Armenia, even if that requires more work, and a drive to succeed beyond artificial barriers posed by geography or lack of experience/knowledge about the target market. 

Once again, TUMO proved to be the perfect environment to listen, discuss and imagine a different reality. Amoor Avakian conceptualized the event, based on similar events he led in the Netherlands and Israel – and today’s event drew at least twice as many participants as each of these previous events.  The keynote speaker was Wouter Blok, responsible for one of Google’s largest corporate accounts and its travel industry sector.

This is the latest in a series of events focused on entrepreneurship, start-ups, realizing business ideas – all aimed at thinking and acting beyond so-called “closed markets” and local monopolies.  In fact, I’m quite sure that the local sugar import king or other oligarchic luminaries, traditional fodder for FB rants and raves, would have no idea what was being discussed and imagined today.  

I saw many familiar faces, and met a number of new people today.  And I came to the realization that we are living in two parallel realities in Armenia: on the one hand, the popular discourse on corrupt officials, oligarchic headline grabbers, and the general decline of ‘Armenia as we know it’; on the other, the path chosen by a small group of smart, forward-looking people who want to learn, not criticize; who look for solutions rather than complain about problems; who focus on building, not tearing down.  Which group would you rather be part of?

To Jermuk

Jermuk

Driving through Yerevan, snippets of history float by as I navigate the series of boulevards that eventually lead to the southern exit of the city:  Komitas, Heratsi, Tigran Medz, Arshagunyants.  As I turn onto the straight stretch of Arshagunyants, by queue, Ararat appears dead center – no matter how many times I see this mountain, each perspective brings its own moment of exhilaration.

Once on the principal highway south, the Armenian history lesson continues:  Artashat, Dvin, Khor Virap.  Having just read “the 10 Greatest Armenian Kings”, each of these names has a new meaning, and I imagine King Artashat I choosing this location, at the edge of the Ararat valley with protective mountains behind, to establish his capital city.  Khor Virap flashes by, a lonely but ardent statement of Armenian identity framed by Mt. Ararat.  Then comes the town of Ararat, recognizable only by its ugly cement factory.  The last stretch through the Ararat plain goes by quickly.

Then, forty miles south of Yerevan, a left turn signals the beginning of the ascent of the first set of Armenia’s southern mountains.  I turn off the cruise control, raise the volume, and prepare for my favorite stretch of driving road in Armenia – from the plain up and over the first range, and down to Areni, heart of Armenia’s wine country.  The legendary straight six BMW engine, even after 10 years, wakes up and jumps to 3000 RPM through the climbing turns.  With the music blaring, I’m dancing with the steering wheel as I float by trucks and Soviet-era cars.  I pass the turn where Paruyr Sevag tragically met his end and a bit later, through his native village, Zangakatun, then Yelpin and Chiva.  

The scenery, in the late afternoon sun, is mesmerizing, and as bring the engine back down to a more relaxed pace, I see the little church on the mountain side that signals the entry into Areni.  I’m already preparing for what comes next:  the right turn into the road leading to Noravank, one of the most magical monastery complexes in Armenia.  Do I turn or not?  A turn will mean a 2-hour meditation among the red rocks – very tempting, but not for today.

The next stretch of fifteen miles follows the Arpa river as it winds through the same beautiful red mini-cliffs, eventually reaching Yeghegnadzor, the gateway to the series of churches and monasteries that lead up to Lake Sevan in the north.  I breeze through Vayk, admiring the still snow-capped mountains of Zangezur to the southeast. 

Suddenly, time to turn left for the climb to Jermuk.  Beautiful topography and, once again, a chance to put the car through its paces.  Finally, Jermuk appears in the distance, and just as I approach the entrance to town, Lilit Pipoyan’s “Cilicia” floats through the car.  And it strikes me that here I am, hundreds of kilometers from Cilicia, home to all four of my grandparents, yet I feel right at home, right where I belong. 

Accompanying iPhone playlist:

Cascade Folk Trio – Old Street

Element Band – Yev O Phe

Armenian Public Radio – Retrograde

Le Quator Komitas – Komitas Instrumental

Lilit Pipoyan – One Day in the City

And, as I write this:

Tigran Hamasyan – A Fable

A few images from today:

Zangakatun

Looking southeast

The magic of Vayots Dzor

Entering Areni

Noravank - to turn or not?

Arpa River

 

Climbing to Jermuk

Doing it right, Jirayr-style

A few weeks ago, we were invited to have dinner at Dolmama, by now a culinary landmark and foodie tourist destination in Yerevan.  It had been years since my previous meal there - somehow it had fallen off of our list of regular haunts to frequent.  I remember Jirayr Avanyan opening a tiny restaurant on Pushkin with 3-4 tables and a simple cooktop in the corner of the dining area many years ago; following a very creative series of expansions, Dolmama has grown in size but fortunately not in spirit or ego.

Two days ago, we reciprocated the invitation to our very close friends.  Of course, no dinner at Dolmama would be the same without Jirayr's heartfelt welcome into the world he has created.  We sat in the grape-vine covered back yard, an oasis of calm and serenity in the otherwise crowded and busy "little center" of Yerevan.  We enjoyed an amazing leisurely dinner, with appetizers and main courses transporting our taste buds to truly unique places in Jirayr style, accompanied by the wonderful Artsakh-produced Kataro red wine.

Dolmama has achieved a "premier" reputation as the place to eat foodie-level Armenian food, and there are many examples of of similar restaurants becoming spoiled, blaze or over-confident in the process.  Wednesday's meal reminded me that this need not always be true.  Jirayr, thank you for remaining so passionate and positive about your move to Armenia, and for giving us the opportunity to ride on your magic carpet, again and again!

Activating the hidden network

In my last post, I spoke about significant investments made in Armenia by Armenians living abroad (TUMO, AYB School, Luys Foundation), and how these are redefining the narrative in the country.  There are additional great examples of successful and wealthy Armenians living abroad "giving something back" to their homeland: Mr. Eduardo Eurnekian with Yerevan's International Airport, Mr. Ruben Vardanyan with the Wings of Datev, the AGBU with the American University of Armenia, Boghossian Gardens/Lover's Park.

There is another type of investment in Armenia that is less publicized, but is just as, if not more, important than these examples.  If one studies the opening of Armenia branches of well-known multinational companies, an interesting pattern appears:  many of these investments were made because of highly-placed, well-respected Armenians in these companies making a "pitch" to consider operations in Armenia, based on a well-educated workforce and tradition of achievements, especially in the core sciences and information technology.  This is true for companies such as Synopsys, Virage Logic, National Instruments, Mentor Graphics and others.

This phenomenon should not be overlooked, and indeed should form the basis for attracting new foreign direct investment into the country.  The emigration that we so worry about, starting 100 years ago as a result of genocide, continuing in the second half of the 20th century because of civil wars and unrest in Armenian communities in the Middle East, and finally the post-independence waves leaving Armenia in the past 20 years, has created a global network of successful Armenians in a number of fields, most notably in medicine, information technology, jewelry and several other fields.  This is the "hidden network" that we need to bring to life to flow private sector, for-profit investment into Armenia.

As an example, I am working on an initiative to attract a Research and Development lab of one of the world's largest consumer electronics companies to Armenia.  Our initial contact with this organization was through an Armenian (originally from Yerevan) who had risen through the ranks of the company's R&D division in their HQ in Asia.  The relationship was developed and confidence gained as a result of a very high-quality, globally competitive research project led by a local Professor and Member of the Academy of Sciences.  During this last phase, we discovered that there are 17 other Armenians working in R&D for this company that we will now leverage to continue to build the relationship.  We are working on weaving all of these threads into a viable investment opportunity for this company in Armenia.  Similarly, there are senior Armenian executives in many of the world's best-known technology firms.

How do we "activate" this network?  Why should a successful executive risk his position/reputation sponsoring such an investment given the "negative" narrative in Armenia?  It's a great question that deserves a comprehensive answer.  Here's a starting point:

1) Present this as a win-win opportunity:  The investing company gets access to a highly-educated workforce at a very attractive price, in a country that is secure, socially cohesive and now well-connected via state-of-the-art communications;  the local workforce has an opportunity to work in a western-managed company with attractive salaries and overall compensation; the government gets to publicize this kind of investment as a result of its efforts to liberalize the investment climate and drive economic growth

2) Achieving the win-win, however, requires commitment and in some cases leaps of faith by all involved.  In particular, the investing company (and in particular the Armenian executive sponsoring the investment), must find the right local partners to help them navigate through Armenian legislation and the reality on the ground.  Potential employees (and in particular graduating students) need to understand that these are highly-valuable positions that require full commitment and preparation from their side, and that compensation will rise according to productivity improvement.  Most importantly, the government must understand that this is a long-term, paradigm-shifting strategy and not a short-term tactical pursuit of cash infusions characteristic of previous sales of national assets. Furthermore, a comprehensive overhaul of the public university educational system is absolutely necessary.

3) Armenians (both in Armenia and abroad) that believe in the value of the hidden network and the importance of raising the standard in Armenia to attract these companies must collectively develop the "face" of Armenia to this network and their parent companies.  This means developing the right narrative, repeating the success stories, and connecting the best local talent with this network.

These successes will not materialize overnight; on the other hand, they are within reach and require focus, dedication and the firm collective belief that we have the ability to redirect the future path of Armenia.

The road less traveled, the story less shared

The popular narrative on Armenia continues to weave its course around the negative issues of the day:  emigration, election fraud, corruption, emigration, selling off national assets, oligarchy, emigration.  It’s easy to be carried by the same current, the same negative narrative echoed by people on the street, by opposition political figures, and magnified thousand-fold by Facebook posts, shares and comment strings.  After all, the latest net emigration numbers are published; post-election videos showcasing Yerevan’s “finest” are making their rounds online; political commentators are raising the crescendo of negative “I told you so’s”.  Blame is the most widely-circulated currency:  blame the government; blame the oligarchs; blame Raffi; blame the rest of the opposition; blame the “thick-necks” in the courtyards for forcing the vote in favor of the incumbent; blame the Diaspora for not caring; blame the Russians; blame the Azeris; blame the Turks.

Worst of all, some of the bravest and most dedicated young voices of the generation coming to the age of political influence are echoing the same words of despair, apathy and resignation, and planning their own departures.  If so many people are repeating the same story, it must be true, right?

Not necessarily.  At the same time, in the same Armenia, there is a different narrative being discussed, debated, and created.  This narrative is woven not out of indifference, aloofness or despair.  Its threads are based on experience, vision, rational and pragmatic thinking, and most importantly by a deep sense that the future of Armenia does matter, that it’s worth fighting for.

Becoming part of the solution

Last week, almost 100 Armenians and non-Armenians from abroad joined a large group of local Armenians to monitor the Yerevan municipal elections as part of a local NGO operating under Armenia’s law on election monitoring.  The energy focused on preparing for, actively participating in, and then documenting their observations post-fact was palpable, and was noticed as much by the local observers as by the startled precinct election commission members, political party proxies and their loyal “thick-necks”.  While the election results came out as expected, the process has changed – their slogan was “it’s not who, it’s how” created a completely different reality in the 60 precincts they were monitoring.

Brain Gain

They join those that preceded them with a vision and the will to make it happen.  For me, TUMO (www.tumo.org) is impressive not because of the amazing interior space and the investment in technology and curriculum.  TUMO is impressive because it has a direct impact on 5000 12-18 year olds, showing them a different reality, and helping them write their own new narrative.  AYB School (http://www.aybschool.am) is impressive not because of the striking architecture, but because each year, a new graduating class is equipped with the education to prosper on a global scale.  Luys Foundation (http://www.luys.am) makes a world-class education at least thinkable, if not completely within reach to all who seek it.  And in response to the common criticism that these programs are helping more of our best and brightest leave Armenia, the cold reality is that some will have to leave in order to gain the education, perspective and experience to come back and turn Armenia into the country we all want it to be.  And believe me, some (but definitely not all) will come back.

Why are you going the wrong way?   
This week, I met/interacted with the following people in Armenia:  a partner at McKinsey & Co, the most prestigious strategy consulting firm in the world; a PhD candidate at Cambridge; a Harvard PhD and a Harvard MBA; graduates of the Ecole Nationale d’Administration and the Sorbonne, two of France’s most prestigious universities; a graduate of Lomonosov/Cambridge/Oxford.  All of these young professionals have countless opportunities to leverage their education in lucrative positions around the world.  Yet they focus on Armenia:  they live here, they work here, or they spend evenings and weekends working on making Armenia a better place for all Armenians.  They are joined by artists, directors, photographers, photojournalists, musicians, businessmen, winemakers, restauranteurs, doctors, lawyers, teachers and designers, all driving forward, rather than commenting bleakly from the sidelines.  

Too often, the first question that I get as a Repat is "why did you move here?  Were things not going well for you in the US?"  Ask each of the people listed above, or the hundreds of others who have made the same journey, and the response is most often:  "No - I wasn't running away from something - I was running toward my homeland."  These people are writing a new narrative - one that is based on action, not apathy; on finding a solution, not repeating the same problem; on seeing Armenia as the center of the solution, not the source of the problem. 

Afterword
Having almost finished this note, I learned of the tragic deaths of two young recent repats to Armenia, Allen Yekikian and Sose Thomassian.  The news of their untimely death in a car accident in Georgia has shaken the Repat community in Yerevan, and I thought twice about posting a "positive" note as we come to terms with this terrible event.  Then, I read the following sentence in a post by one of their friends:  "They had a dream, and they lived it."  At the candlelight vigil in their honor tonight, someone else said: "they came here to make Armenia a better place - let's honor their memory by getting it done".  Here's to Allen and Sose, and all of those who want to take the road less traveled, and tell the story less shared.