Identifier
Created
Classification
Origin
08YEREVAN882
2008-11-05 13:39:00
CONFIDENTIAL
Embassy Yerevan
Cable title:  

AMBASSADOR'S COURTESY VISIT WITH MINISTER OF LABOR

Tags:  PGOV PREL EAID LAB SOCI AM 
pdf how-to read a cable
VZCZCXYZ0000
PP RUEHWEB

DE RUEHYE #0882/01 3101339
ZNY CCCCC ZZH
P 051339Z NOV 08
FM AMEMBASSY YEREVAN
TO RUEHC/SECSTATE WASHDC PRIORITY 8232
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
C O N F I D E N T I A L YEREVAN 000882 

SIPDIS

E.O. 12958: DECL: 11/04/2018
TAGS: PGOV PREL EAID LAB SOCI AM
SUBJECT: AMBASSADOR'S COURTESY VISIT WITH MINISTER OF LABOR
AND SOCIAL ISSUES AND HER VISIT TO THE GAVAR EMPLOYMENT
CENTER

Classified By: Ambassador Marie L. Yovanovitch. Reasons 1.4 (b/d)

SUMMARY
-------
C O N F I D E N T I A L YEREVAN 000882

SIPDIS

E.O. 12958: DECL: 11/04/2018
TAGS: PGOV PREL EAID LAB SOCI AM
SUBJECT: AMBASSADOR'S COURTESY VISIT WITH MINISTER OF LABOR
AND SOCIAL ISSUES AND HER VISIT TO THE GAVAR EMPLOYMENT
CENTER

Classified By: Ambassador Marie L. Yovanovitch. Reasons 1.4 (b/d)

SUMMARY
--------------

1. (C) During their introductory meeting on October 27,
Minister of Labor and Social Issues (MLSI) Arsem
Hambardzumian thanked the Ambassador for the significant
amount of development assistance provided by the USG to the
Armenian people. Hambardzumian stated the MLSI's two main
priorities for the coming years are the development of a
comprehensive social protection strategy and the
implementation of pension reform. The next day the Ambassador
drew national and local media attention to USAID's assistance
in improving employment services throughout the country
during a ribbon-cutting event with the Minister at the Gavar
Regional Employment Center. END SUMMARY

PRIORITIES: SOCIAL PROTECTION AND PENSION REFORM
-------------- ---

2. (C) Continuing her introductory calls on high-level
Armenian officials, the Ambassador met with the Minister of
Labor and Social Issues (MLSI),Arsem Hambardzumian, on
October 27. The MLSI is responsible for social protection
policy and services including labor regulation, pension and
other social insurance programs; employment services, and
social assistance for the disabled, elderly, and other
vulnerable groups.


3. (C) The Minister expressed appreciation to the American
people and the United States Government for their consistent,
timely and substantial assistance over the years, noting that
Armenia does not enjoy the same level of cooperation with any
other donor. He recognized that although Armenia has made
progress in economic reform, significant challenges remain in
reforming the social sector to make it more effective and
responsive to the needs of vulnerable groups. He envisions
radical change in the next 1-2 years, and stressed that
continued collaboration with the USG and other donors will be
critical to their success.


4. (C) The Minister then outlined his most immediate
priorities: 1) the development of a comprehensive social
protection strategy and 2) implementation of a recently

adopted pension reform initiative. The MLSI is developing a
comprehensive strategy on social protection including a
long-term vision as well as specific goals and budget
allocations. It builds on existing efforts (such as the
Poverty Reduction Strategy) and social sector analysis. He
hopes to have a draft strategy document for review in the
next several months.


5. (C) The Government's approach to pension reform was
designed by a multi-sectoral task force with significant
assistance from USAID and other donors. The MLSI has been
tasked by the Prime Minister with implementing the reform.
The Minister cited several challenges including: a very
ambitious deadline (the new system is scheduled to start
January 2010); the need to coordinate across several other
agencies; and the need for sufficient financial and human
resources to carry out the implementation process. On the
positive side, he believes the Ministry has a window of
opportunity to implement this reform given that there are no
national elections in the near future. He expressed
determination to move ahead, despite the risks and
challenges.

EFFECTS OF FINANCIAL CRISIS
--------------

6. (C) The Ambassador asked how the current global crisis
will affect pension reform and the economy in general. The
Minister responded that given Armenia's relatively small
financial sector, it would be shielded from major impacts.
However, he was concerned that decreasing remittances
(currently remittances make up about 20% of GDP and are
mainly used for food, health, education and housing) and
declines in jewelry and mining exports would have a negative
impact on the economy.


7. (C) The Ambassador commended the Ministry for leading the
way in outsourcing social services and asked how the Ministry
planned to institutionalize this process in the future.
(International best practice recommends outsourcing
community-based services for vulnerable populations because
it is generally more cost effective, more transparent, and
more responsive to client needs). The Minister confirmed his
intention to continue this practice and specifically cited
the USAID-funded Soup Kitchen Support Project, implemented by
the indigenous NGO Mission Armenia, as a successful example
of outsourcing social services for the elderly. He
highlighted USAID's contribution to building the capacity of
Mission Armenia, and committed to funding its operations in


2010 and beyond.

RIBBON CUTTING HIGHLIGHTS US ASSISTANCE
--------------

8. (U) The following day the Ambassador and the Minister of
Labor and Social Issues were the guests of honor at a
ribbon-cutting ceremony to mark the official re-opening of
the Regional Employment Center in Gavar, a facility designed
to address the employment needs of local residents. The event
was covered by national television and print media. Gavar,
the capital of Gegharkunik Marz, currently has 3,116
registered unemployed and 110 employers seeking to fill
vacancies. The employment office in Gavar was located in a
building that had not been renovated or maintained for 40
years. In addition to office renovation, the staff was
trained in best practices in employment services, conducting
labor market research, teaching job search skills, and
assisting vulnerable populations to find jobs. The shift in
focus from paying unemployment benefits to assisting people
find jobs and obtain marketable skills is critical to
Armenia's social well-being and economic growth. The
renovation was part of USAID's Social Protection System
Strengthening (SPSS) Project, of which one component is to
upgrade the quality of employment services nation-wide.

COMMENT
--------------

9. (C) Hambardzumian and his ministry have been good partners
of the USG, and though the Minister is relatively new (less
than a year),he clearly understands the key issues in the
social sector, in particular the challenges of implementing
Armenia's pension reform program. The USG, through USAID, is
providing technical assistance on pension reform and is
pleased at the high-level political committment demonstated
by the GOAM. Technical experts agree that the reform
complies with international best practice and will result in
a fiscally sound, yet adequate pension system. End Comment.
YOVANOVITCH