Prosperity model requires will, ambitions and risk

Date: 26 June 2013

Source: Mediamax

Many things have indeed happened since that interview. For example, it was decided to set up the IDeA Fund (Initiatives for the Development of Armenia). Since the RVVZ Charitable Fund, which I founded with my wife Veronika Zonabend, realizes projects not only in Armenia, we decided that the driving force of the Armenian projects will be the IDeA.

To present the goals of the IDeA in brief, I would say that we are setting up this Fund in order to overcome the prevailing skepticism in the country and help to increase social confidence. We want to implement charitable projects that will influence Armenia’s future and help it move from the survival model, which currently dominates in the country, to a model of prosperity. To this end, we need to transform people’s way of thinking and teach them to think and work 20-30 years ahead. We are trying to restore people’s faith that the “impossible is possible” by means of creating mechanisms for the realization of complex long-term projects.

We have formulated 7 basic principles which help us choose the projects and work on them:

• A long-term vision and planning spanning several decades;
• Roject’s scale and symbolic importance;
• Collegiality and internationality;
• Multiplier effect (infrastructure, social, cultural);
• Local community involvement;
• Gradual achievement of operational self-sufficiency;
• Meeting high international standards and creating a new benchmark locally.

I’ll try to explain how these principles work in detail using examples.

A long-term vision and plan spanning several decades. None of the projects is designed for 1-2 years, but rather the horizon of planning and success is 10-20 years. Thus, for example, the idea of “Tatev Revival” was born in 2003. The realization of the project began in 2008 and plans are for it to be completed in 2017 when the Tatev Monastery will mark its 1,111th anniversary. The idea of the creation of Dilijan International School was born in 2006 when we were seeking ways to educate our children. In 2010, the President of Armenia planted a symbolic tree on the territory of the future school and in 2014 the school will welcome its first students. The school will be operating at full capacity by 2023. By undertaking such long-term projects, we strive to show using our own example that the future of the country cannot be built in 2-3 years. It is a hard job which requires involvement for decades.

Its scale and symbolic importance. Overall, $80 million was invested into the “Tatev Revival” project by the initiators of the project, the government of Armenia, and private individuals from various countries around the world. This is a very serious amount. However, the scale is measured not only by the volume of investment but also by changes in the level and quality of life in the region. As for Tatev, I should say that since October 2010 over 140,000 people (and this is a substantial figure) have used the aerial tramway leading to the monastery since. The development of tourism entails infrastructure development, which creates new sources of income and new jobs for the local population. In the case of Dilijan International School, the volume of investment into the construction of the campus, infrastructure and equipment totals $150 million. We are going to attract serious funds in the future, which will allow us to provide scholarships and grants to cover the tuition of 70% of the students. Such projects are vital not only locally but also internationally, since they draw attention to Armenia: for example the “Wings of Tatev” is registered in the Guinness Book of World Records as the world's longest non-stop reversible aerial tramway, and children from at least 60 countries will study at Dilijan International School.

Collegiality and internationality – projects unite a lot of people of various nationalities and religions. This is one of the key principles. It is very important to realize that these are not just Ruben Vardanyan’s projects. For example, the donors of “Tatev Revival” project are not only Armenians, Russians or Americans, but also Kurds, Indians and Jews. Overall, 140 people from 18 countries are taking part in the financing of the project.

The measure of our success is not the fact that we have managed to build the longest aerial tramway in the world but the fact that a significant part of the donors of “Tatev Revival” have decided to back the Dilijan International School project too. If people continue donating to new projects it means that we have managed to convince them of the correctness and attractiveness of our ideas, which is a clear indicator of success.

This principle dovetails with two others – the scale of our projects and the multiplier effect they contain: most of the people taking part in projects in Armenia have no ties with the country. Many of them have never been here before and now they come and are becoming friends of Armenia.

Multiplier effect (infrastructure, social, cultural). The basic goal of “Tatev Revival” is contained in the name of the project – to restore a gem of medieval Armenian architecture and one of the most important Armenian shrines. However, on the way to this goal we are also solving many other vital tasks. It’s already obvious that the construction of the “Wings of Tatev” cableway became the catalyst for the development of tourism in the region. If before the realization of the project only several dozen tourists were visiting the monastery on an average day, today visitors number in the hundreds on weekdays and as many as a thousand on weekends. Ten new hotels have opened in Goris in recent years, which is clear evidence of the effectiveness of our project. At the same time, we are working on the creation of new types of tourism in the region – hiking and cycling tours on special mountain routes, as well as rock climbing. The revival of Tatev also influences the surrounding villages, whose inhabitants now have better opportunities to find good jobs. Another very important component of the “Tatev Revival” project is the provision of a more convenient connection with Artsakh. Taking into consideration the fact that the road from Yerevan to Stepanakert is very tedious, many people, including Armenians themselves, haven’t wanted to visit Artsakh. Today, the development of the tourism infrastructure is allowing both Armenian travelers and foreign tourists to spend the night in Goris, enjoy the beauty of Tatev and then continue their journey to Artsakh. The construction of Dilijan International School is also having an effect in a number of other areas. First of all, Armenia will add itself to the list of countries that have international schools which meet modern educational standards. Secondly, the teenagers who will study in Dilijan will be able to go on to the best universities in the world. The years they will have spent in Armenia won’t be in vain. These young people will become akin to ambassadors for our country and will help it gain more popularity. Thirdly, such a large-scale project will bolster the development of small and medium entrepreneurship in Dilijan and will create jobs. I could go on but I would like to highlight the most obvious aspects.

Local community involvement. This is very important and at the same time one of the most complicated principles to realize. I don’t want people to perceive our projects as being something “foreign” or as something imposed from above. People working in Tatev or Dilijan should feel that it’s not simply a job but that this project is part of their lives. Let’s take, for example, the Yerevan Cascade. The reaction to the first sculptures was reserved, sometimes even hostile. However, today they have already become part of the natural Yerevan environment and if anyone were to remove Botero’s “Cat” I am sure many would become concerned and ask: “Where is our cat?”

Gradual operational self-sufficiency. We have to understand that charity is the initial significant capital investment necessary to establish the infrastructure. It will never return to the donors. We have to create mechanisms for the gradual transition of the projects to being self-financed, when the projects will exist irrespective of the donors. For example, the aerial tramway in Tatev is an expensive engineering construction and all proceeds from the sale of tickets are directed to its maintenance.

Meeting high international standards and creating a new benchmark locally. Our projects in Armenia meet the highest world standards. The Tatev cableway was built by the Austrian-Swiss company Doppelmayr/Garaventa – the world’s leader in this area. As for Dilijan International School, thanks to the efforts of British architect Tim Flynn and a Russian RD Management Company, Armenia will have its first large complex of public buildings that meets the most modern environmental standards and perfectly fits into the landscape of Dilijan National Park. The Board of Trustees of the school comprises internationally recognized people of various nationalities, who are ready to be in charge of the project. This is further evidence of the fact that we are setting a very high bar for our undertakings. As for the industry of charity on the whole, it’s a relatively new notion, and there are only a few people who can do charity professionally. Very often charity is perceived as an emotional response, not a professional activity. People don’t understand that this is very serious work, just like commercial activity. Of course many learn that. Some learn it faster, some slower, but understanding of the industry of charity in the society is, nevertheless, improving.

I hope they do in some way. I think even small changes are very important and I am happy that much has been achieved so far. It’s another thing that being a restless man by nature and very demanding of myself and of those around me, I worry that things are moving very slowly. At the same time, I understand that things develop very slowly in Armenia and there is a lot of inertia. In any case, I hope we will manage to accomplish everything we have planned within several decades.

I can say we already have an example of crowdfunding: several years ago people responded Yerevan Magazine initiative to restore the David Sasuntsi monument and the small fountain on Republic Square in Yerevan. Although it’s hard to solve large-scale charitable tasks through crowd funding, I think it’s a very good and important undertaking. Nevertheless, there are a lot of differences between crowd funding and the industry of charity: crowd funding is only one way to do it.

The answer is quite simple – we have to keep on “ploughing”. (Smiling) There will be no harvest if you plough a field only once. I don’t agree with the opinion that “Armenia-2020” was fruitless. The idea of a state-private partnership, on which the project was based, was realized through the establishment of the National Competitiveness Fund of Armenia. Let’s not forget either that the government of Armenia invested $20 million into the “Tatev Revival” project, which was a significant contribution. So, the restoration of Tatev Monastery is a joint effort involving private investors, the Armenian Apostolic Church and the government, where the National Competitiveness Fund of Armenia is the coordinator between the project participants. IDeA Fund is a product of the “Armenia 2020” project. So many of the ideas and approaches we have once discussed are in fact gradually being transformed into concrete projects.

I think it would be incorrect to give assessments, since I don’t live here. At the same time, as a person who regularly visits Armenia and can view things from the “outside” I see several fundamental problems. Although there is a lack of jobs in Armenia, it is extremely difficult to find professionals ready to devote themselves to projects. At the same time, many people are ready to leave for Moscow or somewhere else to take a much less attractive job elsewhere. I have to say that today Armenian society is dominated by a somewhat distorted perception of success: people think that a successful person is not someone who works hard and earns money, but someone who has money but doesn’t work. The important factor is not knowledge but a diploma. This is a very depressing phenomenon. Personal and professional relationships are often blurred. As a result of this the discussion of a particular business problem often turns into a “bazaar”. There exists another aspect as well: the richest people in the country aren’t the largest taxpayers and their businesses are not built on talent or intellect but on proximity to the authorities. There are different rules for different groups, which are defined not by talent and the ability to work hard but by ties within certain circles. Nevertheless, there are definitely some good success stories too. And I am happy that some Armenian businessmen are participating in the realization of our projects. I think it happens because people have lost faith in the future, their dreams. Armenia sticks to the survival model today. When you live in such a regime, you don’t think about long-term perspectives. Even the elite lacks a “long” planning horizon, this is why the most important decisions are made without thinking about the future as if we live here and today only. This is particularly visible in urban development: a lot of high buildings are being built in Armenia today, mainly in the center of the cities. Such a rapid saturation of the space with a large number of objects inevitably impacts the quality of construction, as well as the surrounding infrastructure. And no one cares about the ideology, aesthetics, or about convenience and adaptability of these houses to people's lives, especially children. New buildings should not only fit the urban environment, they should help the city preserve its integrity and identity. This can be done only if you love your city, take care of it and think about its future. Unfortunately, I don’t feel that people love their city or their country. I don’t feel that they are proud of it.

In order to turn the tide, we first of all have to increase confidence, and then expand the planning horizon. But the model of survival that exists in Armenia today doesn’t allow that. This is a problem not only for the authorities but also in the society at large. People build a small vendor kiosk, then attach a veranda to it, then a balcony and then this construction turns into a shop, which later transforms into an empire, but it nevertheless consists of small, haphazardly placed pieces. Over the last century Armenians have lived under the yoke of foreigners, which is one of the reasons why we are very good mediators and assistants, but very seldom become the heads of large corporations. The model of survival exists everywhere, whereas we don’t have a prosperity model which requires ambitions and risk.

Everything is possible. This is a matter of vision, will and taking concrete steps. The goal of IDeA is the effective transformation of people’s way of thinking, which is necessary to pass to the prosperity model. It requires concrete steps and cannot be done within a day.