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Appendix E
Presentation of Armenian Ambassador Arman Kirakossian to the National Research Council Committee on Science and Technology in Armenia

Washington, D.C.

February 6, 2004

First, I want to thank the National Research Council and Mr. Schweitzer for extending me an opportunity to speak before you and present the Armenian government’s perspective on science and technology in Armenia. I am glad to see representatives from the State Department, USAID (U.S. Agency for International Development), and CRDF (U.S. Civilian Research and Development Foundation). Armenia is fortunate to have the support of the people and the government of the United States in many areas, and your assistance in the area of science and technology is helping to preserve a bright future for Armenia.

I want to start by emphasizing that the single distinct feature of Armenian reality is the human capital of the nation. Unlike its neighbors, Armenia does not have oil, or gas, or other natural resources in significant amounts. What we have is people. Education is a priority for most if not all Armenian families. In fact, since the Armenian alphabet and literature in Armenian first appeared in the fifth century A.D., education, literary tradition, and scientific pursuit have played an important part in preservation of the national identity.

The reason it matters is this. The collapse of the Soviet Union, the 1988 earthquake, and economic blockades brought severe hardship and drastic reduction in national income. The poverty and income statistics for Armenia are not encouraging, but the presence of a strong educational and scientific capacity is an indication that the long-term development of Armenia can be assured. Yet, the maintenance and modernization of this capacity is essential if we want to



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Science and Technology in Armenia: Toward A Knowledge-Based Economy Appendix E Presentation of Armenian Ambassador Arman Kirakossian to the National Research Council Committee on Science and Technology in Armenia Washington, D.C. February 6, 2004 First, I want to thank the National Research Council and Mr. Schweitzer for extending me an opportunity to speak before you and present the Armenian government’s perspective on science and technology in Armenia. I am glad to see representatives from the State Department, USAID (U.S. Agency for International Development), and CRDF (U.S. Civilian Research and Development Foundation). Armenia is fortunate to have the support of the people and the government of the United States in many areas, and your assistance in the area of science and technology is helping to preserve a bright future for Armenia. I want to start by emphasizing that the single distinct feature of Armenian reality is the human capital of the nation. Unlike its neighbors, Armenia does not have oil, or gas, or other natural resources in significant amounts. What we have is people. Education is a priority for most if not all Armenian families. In fact, since the Armenian alphabet and literature in Armenian first appeared in the fifth century A.D., education, literary tradition, and scientific pursuit have played an important part in preservation of the national identity. The reason it matters is this. The collapse of the Soviet Union, the 1988 earthquake, and economic blockades brought severe hardship and drastic reduction in national income. The poverty and income statistics for Armenia are not encouraging, but the presence of a strong educational and scientific capacity is an indication that the long-term development of Armenia can be assured. Yet, the maintenance and modernization of this capacity is essential if we want to

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Science and Technology in Armenia: Toward A Knowledge-Based Economy preserve the high levels of literacy, higher education, and scientific potential that Armenia enjoyed at the outset of independence in 1991 and continues to enjoy even now. The literacy rates for Armenia are almost 100 percent, and the number of people with higher education is among the highest in the world. Secondary education is compulsory and free of charge through grade ten. The main problem, however, is the general economic conditions in the country. Similar problems continue to exist in the science sector. During Soviet times, the organizational structure was highly centralized and based on the Academy of Sciences. Some research institutions reported directly to federal agencies in Moscow and some to local Armenian ministries. The economic transition in Armenia has had a major impact on science, basic and applied research, and technological development. Armenia has more than 140 scientific institutes, centers, and other units, including major institutions like the Yerevan Physics Institute, the Byurakan Observatory, and the Microbiological Depository Center. The National Academy of Sciences [NAS-RA] coordinates fundamental and applied research in different fields. As a state scientific organization, the NAS-RA unifies scientific and research institutes and subsidiary services. In 2001, the Academy system had a total staff of about 4,600 employees, including a scientific staff of about 2,400 (116 academicians, 340 doctors of science, 1,150 candidates of science). The story of Armenian science in the last decade was a story of survival and adaptation to new conditions. In 1998, scientific R&D expenditures in Armenia were 0.3 percent of the gross domestic product (GDP) and educational expenses were less than 2 percent of GDP. Although state funding is very low, Armenian scientists are doing excellent work in many areas, due to substantial scientific potential, recognized schools, research-oriented scientific traditions, and good equipment. The number of scientific publications was 0.8 per scientist per year in 1998, and the ratio of scientific personnel to the general population was 0.17 percent. Scientific institutions of course experienced a major problem as many scientists have emigrated. Yet, sometimes it can be beneficial as well, because the former staff members have helped to establish good contacts between their former and current institutions. I want to speak about the problem of “brain drain” and emigration from Armenia. Armenia’s census in 2002 showed that the permanent population in Armenia comprised 3 million people, implying an emigration of close to 800,000 people since 1989. Emigration has now significantly slowed down, but it is a cause of concern. The emigration of people from Armenia is the tragic result of underutilized economic potential. Neither is it an isolated phenomenon: we know from history that Ireland has suffered a similar brain drain, which is now being reversed. I have confidence that eventually, as Armenia’s economic progress picks up, it will be possible to stop and reverse the migration in Armenia. Soviet Armenia’s economy, which was approximately twice the size of the current GDP, was anchored in the Soviet Union’s command economy. By 1989,

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Science and Technology in Armenia: Toward A Knowledge-Based Economy Armenia had developed heavy industry, including radio electronics, defense, and chemical industries. This was a blessing in disguise, because it allowed a high level of urban employment but made Armenia completely dependent on the Soviet Union. Cities were built that depended on one huge plant to provide employment, like Hrazdan, Charentsavan, and Kapan. Pollution and social problems also arose. Well, the Soviet Union no longer exists. Those enterprises that employed thousands of people are now idle, and the people who worked there found themselves out of a job. The problem of unemployment is especially tough for those with fewer skills. The Armenian government and the World Bank estimate that more than 50 percent of the population is vulnerable, while 23 percent live in dire poverty. The government, working together with its donors, has adopted a national strategy for poverty reduction that will stress the creation of economic opportunities, training, and targeted social work to significantly reduce poverty by 2014. Armenia’s budget, which is much smaller than it was a decade ago, is also strained due to important expenditures on national defense and security, rebuilding the earthquake zone, and social welfare. Obviously, the Armenian government is concerned about the future of science and education. There is a government activities program adopted in August 2000 that also addresses the situation in this field. The government plans to press ahead with reforms of the secondary schools, including streamlining the number of schools, increasing their academic autonomy, and introducing per-student subsidies to each school (instead of current, fixed financing from the budget, which is not flexible). This process, called “optimization,” is under way in Armenia. Eventually, the government plans to introduce a six-day week for school students and an eleven-grade secondary education. An average secondary school now has ten grades, 1 through 10. In American terms, the students go through elementary, middle, and high school while attending the same secondary school. The government plans to develop a national program for development of the education system. This program would provide for a significant increase in teachers’ salaries, training, and establishment of teachers’ training and continuing education centers. As there are many private colleges operating in addition to the already established state colleges and universities, the government plans to develop a strong licensing and accreditation mechanism based on solid standards and to increase the colleges’ autonomy. The government works with the U.S. State Department-sponsored program Project Harmony and other foreign donors to provide Internet connectivity for Armenia’s secondary schools and state universities, to allow the students and faculty to fully utilize the modern research and high-technology tools available through the Internet.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy SCIENCE The government views the science sector, including the research institutes and laboratories, as an essential factor in the long-term economic and social development of the country. The primary objectives of the reforms in this sector should be to optimize the structure and management of the scientific institutions and to secure a steady flow of financing for them. In addition to state budget financing, the government envisages incentives for encouraging private-sector and third-party financing of R&D projects. The government has consistently increased science funding; this year’s budget allocates approximately $6 million (1 percent of total government expenditures) to the scientific institutions. A major help to the struggling scientific institutions is the existence of international foundations helping scientists in Armenia. The U.S. government has established the Civilian Research and Development Foundation (CRDF), which provides grant funding to scientists in the Newly Independent States; I know Mr. Modzelewski is going to make a presentation on CRDF later this morning. There is also the International Scientific Technical Center, a cooperative venture of the United States, the European Union, and the government of Japan, which fosters contacts between Western scientific institutions and their counterparts in Armenia. The U.S. government runs a number of other programs that benefit the Armenian scientists and educational institutions, for example, the Muskie Scholarship program, which allows dozens of Armenian graduate students to study in the United States every year. There’s an organization called Armenian Engineers and Scientists of America, comprised of Armenian-American scientists as well as the scientists who have emigrated from Armenia, which has also been of great help to their Armenian colleagues. These programs have helped sustain the scientific institutions, orient them toward the needs of the private sector, and establish a culture of good cooperation and collaborative efforts with their counterparts in the United States and European countries. I don’t want to create an impression that everything is bleak in Armenian science. There are indeed many success stories. A recently published Armenian high-tech directory lists products by 38 Armenian scientific institutes and their branches. This is a testimony to their enterprising spirit and adaptation to new times. The Cosmic Ray Division of the Yerevan Institute of Physics participates in a global network of scientists involved in detecting neutrinos and other cosmic particles. New discoveries are being made by Armenian scientists in Armenia in physics, chemistry, and other areas. As I said, many of the Armenian scientists who emigrated abroad continue to engage in research and help their colleagues back home to stay tuned to the current developments. One example, Yuri Oganessian—one of the scientists in Russia’s Institute of Nuclear Reactions who together with their American colleagues recently announced the discoveries of new heavy elements—is originally from Armenia. One area where expatriates proved particularly helpful was the

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Science and Technology in Armenia: Toward A Knowledge-Based Economy information technology [IT] sector, which has become a booming industry. There are more than 20 large IT companies in Armenia that have capitalized on existing potential and the expertise of people like Ashot Hovanesian, who emigrated to the United States and established a company in Virginia called Synergy International, which supplies information management systems to the U.S. government and corporations. A significant part of the software is written by the Armenian branch of his company. Most Armenian IT companies work for U.S. and European customers. There is another project that deserves the support of the government and the international community, namely the construction of Center for the Advancement of Natural Discoveries using Light Emission (CANDLE). This project will benefit Armenia and the larger region, because fundamental science knows no boundaries. I know that’s one of the areas your team will look at in Armenia, and I certainly want that project to succeed. Natural sciences should not be the only area that you explore, as the potential for social science is also great in Armenia. In particular, due to a rich history, literature, and culture, Armenian studies is one area where strong cooperation exists between the Armenian researchers and their colleagues in foreign universities and in the diaspora. Existence of institutional links between Armenian studies chairs and departments can help facilitate contacts between academic institutions in Armenia and the United States; it’s also one area that attracts significant attention and funding from the Armenian diaspora. As you travel to Armenia and meet with your colleagues in the academic institutions, you will discover a spirit of partnership, desire to collaborate, and willingness to consider new ideas and proposals. I say this from my personal perspective, as I have had the privilege of working in the Academy of Sciences system prior to joining the Foreign Ministry. The Armenian government and the Ministry of Education and Science will also be interested in the results of your work. The key to the future of Armenian science is to increase government funding in this area, but also to encourage the private sector’s direct participation and feedback in this process. I am sure that your study will provide concrete suggestions that will help the government, its international partners, and the scientific community. Thank you.