Closed Compact Report: Armenia Compact | March 2021

Compact Development Process

As one of MCC’s first partner countries selected by the Board as eligible to develop a compact in May 2004, the Armenia Compact predates MCC’s use of the constraints analysis in the compact development process. 1 As such, the GoA based its program proposal on a comprehensive consultative process that was initiated in 2003 for the development of its Poverty Reduction Strategy Paper (PRSP). A central theme of this strategy was modernization of Armenia’s rural economy, especially through infrastructure investment in irrigation and rural roads. The GoA further reviewed and disseminated the PRSP through electronic and printed media and then engaged a broad cross-section of civil society—including rural community members, NGOs, and the private sector—through meetings and roundtables focused specifically on development of a proposal for the compact.

In order to provide an internet-based resource and information portal, the GoA maintained an interactive website that provided program information, meeting minutes, a forum page on which to debate issues related to proposal development and implementation, and an e-mail address for sending inquiries and concerns. As a result of the consultative process, there was broad agreement that identified rural roads and irrigation as fundamental strategic investments to help reduce rural poverty and improve economic growth.

The selection of the irrigation and rural roads projects introduced several challenges, with issues ranging from communal land rights and responsibilities, sustainability of the investments, and civil society involvement in compact development and implementation. To address concerns of the NGO community, which contributed substantially to the proposal development and due diligence processes, the GoA offered to have them elect their own representatives to participate in inter-governmental board of trustees meetings. Issues raised continued to be addressed through a consultative process that incorporated feedback mechanisms, particularly with stakeholders involved in irrigation, agriculture, rural road, policy development and advocacy, and groups that specialized in monitoring and evaluation.

  • 1. Beginning in 2009, MCC began undertaking constraints analyses based on the Hausmann, Rodrik, and Velasco diagnostic method in the preliminary analysis phase of each compact.