Originally published at news.am.

The state budget is often insufficient, particularly in countries like Armenia, which ranks 113th globally in terms of GDP (World Bank 2023). However, is the lack of financial resources the only barrier to community development? Do local authorities have the necessary skills to manage available resources effectively, attract additional funding, and ensure sustainable growth?

Armenia’s 71 communities are vested with significant self-governance powers, enabling them to set economic priorities, design strategic initiatives, and secure funding. However, many still operate under outdated, inefficient governance systems, inherited from the era of centralized governance, relying primarily on state subsidies for development.

This traditional approach also undermines community participation, as many residents don’t view their local authorities as autonomous, leading to disengagement. Yet, fostering active community involvement is key to long-term success.

So, what does the Mayors for Economic Growth (M4EG) Facility, a joint initiative of the European Union (EU) and the United Nations Development Programme (UNDP) offer? It focuses on learning, transformation, and driving change.

LEARNING

At the core of the M4EG initiative is strengthening the capacity of local authorities, the key stakeholders in community development. This is achieved through training, exposure to global best practices, consulting from international experts, and hands-on application of new knowledge.

The training programs are based on findings from UN studies across 55 countries, identifying key skills gaps that hinder local authorities’ ability to drive sustainable development. According to Krist Marukyan, M4EG Armenia program coordinator, 

“For over 30 years, international development programs in Armenia have worked toward progress, yet there remains a significant opportunity to achieve much more impactful and sustainable outcomes in community development.”

One of the key issues is that many programs are time-bound and fail to be institutionalized after completion. M4EG addresses this by having local authorities, with active community involvement, lead the development of a vision and plan for their community. This approach ensures ownership, motivating communities to continue the work and integrate it into their local budget.

Capacity building for municipal staff is achieved through training, exchanges, and an experimental approach that encourages learning from mistakes. This results in municipal teams that can independently initiate projects, secure funding, and manage them effectively.

“Municipalities typically allocate most of their budgets to operational costs, leaving little for development,” explains Marukyan. “But with the right tools, municipalities can identify new funding sources, including from international organizations and the Armenian diaspora, and manage these resources effectively.”

M4EG also created a network of “learning municipalities,” where participants commit to ongoing training and education. A willingness to learn is a key requirement for participation, and the level of training completed by municipal staff is a measure of a community’s readiness to adopt innovative management practices.

TRANSFORMATION

M4EG enables communities to apply their learning through financial and technical support for specific development projects. The programs are delivered in two formats:

1.     Portfolio Programs: Extended collaboration that foresee usage of portfolio approach, which is a complementary method to help decision makers navigate problems where traditional methods, such as project management, are not sufficient.

With M4EG experts and community input, develops a comprehensive strategic development plan by combining different ideas and solutions to tackle local challenges, such as improving jobs, services, and the environment. M4EG provides financial and consulting support throughout the project. 

2.     Urban Imaginaries: 

A short-term intervention aimed to support small initiatives that seek to reimagine or reinvent key aspects of local living.

Over the past two years, three Armenian communities – Areni, Kapan, and Gyumri – have implemented complex development programs using the portfolio approach.

What is a Complex Program or Portfolio Approach?

“In a rapidly changing environment, technical solutions alone are often insufficient as they address isolated problems. For example, replacing a damaged cable fixes the immediate issue, but tackling complex challenges requires comprehensive, multi-faceted solutions over time,” explains Krist Marukyan.

Short-term interventions took place in Charentsavan, Alaverdi, and Ashtarak, focusing on projects that make urban spaces more inclusive and vibrant, while addressing local challenges in creative and practical ways. For instance, in Ashtarak, M4EG funded a bus to connect remote settlements to the community center. In Alaverdi, M4EG supported the renovation of the House of Culture, and in Charentsavan, the restoration of the “Curly Haired Boy” statue and park improvements, including an irrigation system, aimed to boost tourism. These projects were initiated by the communities themselves and developed using M4EG tools and expert consultations.

Why is Community Involvement Important?

“This is the first time an infrastructure project has been publicly discussed in our community. It’s not just about infrastructure—it’s about revitalizing the city and inspiring residents to take better care of their city,” says Ashot Tserunyan, Head of the Development Programs and Information Technology Department at Charentsavan municipality. He emphasizes that community involvement in development will continue in future projects.

“We attempted public discussions in Alaverdi before, but residents were passive. Through the project, we learned that instead of inviting residents, we should go to them—engaging different groups since each sector faces its own issues. We’ve learned how to facilitate open dialogue, as people in small communities often hesitate to speak freely due to familiarity,” says Karine Simonyan, Head of the Development Programs and Tourism Department at Alaverdi Municipality. Born and raised in Alaverdi, she understands the community’s challenges. Karine acknowledges the difficulty of implementing such programs in a community with many pressing social issues. “When a resident reports a broken road or leaking roof, it’s challenging to convince both authorities and residents that the cultural sector is also a priority,” she adds.

“The transformation of municipal employees’ mindset was challenging, especially in the early stages when the program’s objectives were unclear to them. Traditionally, staff worked on short-term grant projects addressing specific issues. In contrast, this program involved extended discussions and training, which initially raised doubts. However, over time, employees recognized the value of this learning phase. The approaches they acquired are now embedded in their daily practices, enhancing both program implementation and their overall professional work,” says Krist Marukyan.

DRIVING CHANGE

A key aspect of the M4EG approach is flexibility, crucial during crises. “How prepared are our municipalities to govern effectively in crisis situations?” asks Krist Marukyan. Historically, municipalities have lacked specialized crisis response capabilities, often managing as best they could.

An ideal community government, according to M4EG, balances development under normal conditions with flexibility in crises. Municipal employees are trained in global best practices for crisis preparedness and management.

For instance, in Kapan, where a portfolio program has been running for two years, the local government adapted its development vision to address potential economic shocks, like fluctuations in the copper market. They are now focusing on small businesses and digitizing social data to improve crisis response.

The need for flexibility became clear when tens of thousands of people displaced from Nagorno-Karabakh arrived in Armenian communities. Kapan redirected part of its program funds to provide essential household items for these families. In Areni, M4EG funds helped supply fuel for displaced families. Similarly, in Alaverdi, when a flood-damaged infrastructure in March 2024, the municipality used crisis management principles learned through M4EG to respond quickly.

Building Thriving Communities in Armenia is Underway 

Community development in Armenia is achievable with the M4EG approach: Learn, Transform, and Bring Change. This requires a shift in municipal management, a clear development vision, and community involvement. Success lies in long-term strategies and active participation of the community.

Narine Hovhannisyan