John Heffern: Obviously, the country’s competitive advantage is not natural resources or infrastructure. In my opinion, it is people, and the government should provide opportunities for these talented people to succeed.

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Mr. Hovik Musayelyan will host the US Ambassador to Armenia, Mr. John Heffern.

Hovik Musayelyan: Dear Mr. Ambassador, first of all, I would like to inform you that within the Dialogue we have discussed issues of management in different spheres and touched upon numerous problems of our country. Meeting with you is an excellent opportunity to expand the range of topics, so I suggest we discuss diplomatic activities as well, namely the role of the head of a diplomatic corps and the subjective factor of an individual in the complex process of establishing rapport, dialogue and mutual understanding between two countries. Armenia is a small country, however, historically if a country like the USA sends an Ambassador to Armenia it means that they consider the opinion of the diaspora and lobbying groups of that country, as well as personal attitudes of the proposed candidate concerning a series of sensitive matters for the Armenians. We all know that recent appointments of ambassadors have been actively debated, various factors and considered, thus, it is particularly interesting that your appointment was quietly accepted. However, this is just one side of the problem, because the way you would be received in Armenia was equally important. To sum up, we would not be mistaken to say that, first and foremost, of course, the US Ambassador to Armenia reports to the State Department, but he/she also is responsible for the concerns of the Armenian community in the US, as well as he/she should contribute to the development of diplomatic relations between two countries.
I have happened to communicate with the US Ambassadors since 1993, when I was Assistant of Deputy Prime Minister, later as the Head of Foreign relations at Yerevan municipality and after that, when I started my career in the American companies. I can testify that in a short time you have earned respect of the Armenian business community. How could you manage to settle into a brand new environment so quickly?
JH: Thank you for inviting me for an interview. The initial stage of my service in Armenia was my appointment, as you have already mentioned. During my meetings in Congress and with the Armenian community, I kept saying that contributing to economic development of Armenia is my key challenge.
Most of the participants at the discussions had the same priority. Armenia must become a successful, prosperous and safe country, and the government, NGOs, as well as the business community should play an essential role in achieving this goal. I was coming to an unknown country but from the first day me and my wife were received warmly by everybody, including the business community, especially the IT sector, where we have very successful companies.
HM: I represent the generation that lived in a closed system. I’ll tell you about our attitude to the US. Though we were taught that it was a country of evil, however, for us the US was a country of our dreams, maybe because it was a forbidden fruit. In the early seventies the Soviet Union made it easier to leave the country, on the condition that whoever received higher education should compensate the cost (estimated at five thousand rubles) of the educations to the state. Clearly, that made it difficult to leave the country. However, my close relatives moved to the US in those years, and they were sending us photographs. Those photos had become some sort of a guideline of what a good life is.
But the country has collapsed, and the borders were opened, and we were able to visit the US, which turned out to be a country with its own problems. You have lived on the other side and you had your own ideas about the Soviet Union. Back then, the world was bipolar, two superpowers played a crucial role, while today many small countries became independent and the play key part in their regions. Globalization led to establishment of new economic ties, Armenia also adopted new business culture, and in this regard we are thankful to the United States too. In this regards, there is an interesting observation. It is one thing when you work with a diasporan businessman, and it is completely different when you work in an American company. It is surprising that Americans start to trust you at once and don’t miss a chance to express their appreciation. It’s really easy to work with Americans, but at the same time, it is very difficult because they keep adding new initiatives. What do you think, is this a popular opinion in the Armenian reality?
JH: Strong relations between countries mostly depend on communication between people. I don’t consider myself an expert of this region and I had no idea about how I would be received here. I and my wife were pleasantly surprised to meet the warm reception everywhere we went in Armenia. It is important. For a strong cooperation we must develop solid foundation. Among international values I would give special priority to democracy. Business culture is not always accepted, there is a lot to do, but we have success in all sectors, and we try to stimulate it.
HM: Yes, we have discussed business problems during our meetings. We have also talked about monopolies, and we believe oligarchic system is the main impediment to the development of the economy. As far as I know, you also have raised that issue.
JH: There are several approaches to oligarchic and noncompetitive activities. You can immediately attack it, but it is not my approach. We raise issues in the sectors that we think are important and help people organize and be transparent.
This is the reason that we chose the IT sector, where investments have been made. The sector is decentralized, and it is difficult for individuals to control it. There is another sector that needs reforms. It’s civic aviation, where government can make some changes. Those changes can bring economic development. It is impossible to develop tourism without it. We now try to support government; we also try to bring American airlines to the region. It is a good time for government to make radical changes in aviation and finally improve the situation in this sector.
HM: You mentioned tourism as one of the dominant trends. Having gone to the regions frequently, you would agree with me that Armenia is a country with the potential of tourism. However, this trend has limited possibilities. During one of the meetings with the President I raised a question on why the government of Armenia does not encourage construction of three-star hotels. It is great that you’re interested in airlines, too. Three years ago, during a meeting of representatives of IT sector with the RA President I had a chance to express my concerns about Armavia because I had my own experience in encountering bad situations. Once Rich Goldman, the vice-president of Synopsys, was to fly to Amsterdam and he had to be in San-Francisco by midnight. We went to the airport and were informed that the flight had been cancelled without warning the passengers. We were told that he could fly in a week with the same ticket. It is indeed absurd for the business world. Such problems can be easily resolved. Once in six or seven years there is a new demand for hotels and the businessmen start building hotels and compete; it seems that the costs will be reduced but the opposite takes place. Because everyone tends to stand out with luxury and many of them try to recompense their investments, either their rates do not comply with the quality of the service or the customers cannot afford their services. But I should also state that I have many guests from abroad and we often visit different sites in Armenia and they are really impressed. First of all they mention safety. They speak about people’s hospitality, which is unique in this country.
JH: Just this morning I had a problem with aviation. Our friends have decided to visit Armenia this summer; we were making plans, thinking about where to take them, so that they enjoy their visit. Today we found out that they have done some calculations of time and costs and have made a decision to cancel the visit. There are of course reasons that hinder the economy development, such as the country is small, there is no sea access, and there are issues with Turkey and Azerbaijan. However, there are also issues that can be solved, and government can do something about it. For example, liberalization in civic aviation will lead to different companies bringing new passengers, and things will change very quickly.
We have been promoting the idea that airline traffic growth is stimulated through world famous airlines. This does not mean to give privileges to one company, on the contrary, any company should be provided with equal opportunities, so that they operate in competitive conditions, and that will lead to the development. There is definitely a possibility that has not been realized yet.
As for tourism, here is an example. I and my wife have noticed that each of the regions of Armenia has its own unique characteristics. We were invited to a honey and berry festival in Tavush region, a wine festival in Areni, a barbeque festival in Akhtala, which I like a lot. Gyumri too has its own unique characteristics. Armenia has its characteristics, which are unique for intellectual, religious, eco-tourism development. It is an excellent opportunity. I toured with my wife in Israel for two days. They had an impressive tour that included the spots mentioned in the Bible. If there is another country that can have a similar program, it is Armenia. You have the opportunities, but they are not used the way the used in Israel. Our children have visited us, they left very impressed and they will visit again, but certain steps in the area of tourism should be taken, so that you have good results.
HM: You have touched upon a very important subject; religious tourism can truly become a wonderful opportunity to represent our country. I have always thought that we can transfer the fact that Armenia was the first state to adopt Christianity and to develop the specific spiritual environment into Armenia’s brand. Mount Ararat alone leaves a powerful impression on visitors. Apparently, after the flood Noah came down to Ararat valley, and it would be very impressive to have a monument dedicated to it. Similar recommendations were made many years ago, but it still doesn’t seem to be taken seriously. Unfortunately, such a unique opportunity for the country has not been realized yet. Continuing our conversation, I would like to address the issue of the safety of the country, which is particularly important for the American side. Being the head of the American company, I always present to Synopsys management an analysis of the situation in Armenia, regional developments, as well as events taking place within the company. The U.S. Embassy warns American citizens about the security measures. In case of the smallest alarm, we receive instructions from the management in the US to provide security for our employees. It is an integral part of American culture. As a director of an American company, in each of such cases, I also take appropriate measures, but, frankly, in some cases, I take some of the warning with a sense of humor, because there is no danger.
JH: Addressing your observation on security, I can say that we don’t have terrorism and crime here obviously; however, regarding warnings, I have to say that they apply to Americans all over the globe. As for the circumstances impeding the economic development of the country, you are well aware that, in addition to competition, there are issues of the judiciary, tax, and customs administration. These are questions which the government should address, so that new investors come.
HM: It seems that media, especially internationally recognized media, has an important role in a country’s reputation. Recently, a representative of the American Times magazine interviewed me, and one of the questions was related to an article published in Forbes magazine. The magazine ranked Armenia among the worst economies on some indicators, but the analysis of the articles showed that the ranking was far from reality. We cannot exclude the possibility of that the author of the article was simply following an order. The American Times representative asked the question at the very end and I said, “We have been talking about Synopsys Armenia success for the past hour and a half. How is that possible for a country with so much success to have such indicators?”
JH: We cannot control the media, we cannot forbid something that is paid for, but we can send out our messages. But I have to say that media the area where Armenia has major success. During the past three elections, the international observers recorded that the media was equally available to all parties. According to the Freedom House analysis, Armenia has improved its recorded considerably.
HM: I would like to know what, in your opinion, Armenia’s competitive advantage is.
JH: I don’t know much about the country’s competitive advantage, but, obviously, it is not natural resources, and it is not infrastructure. In my opinion, it is people. They are gifted, successful, and have an entrepreneurial spirit. The government should provide opportunities for these talented people to succeed at work.
HM: According to my observations, the competitive advantage of Armenians is adaptability to new situations. It is also visible in our sector, where engineers quickly adapt to new developments. The example of diaspora is a proof of that as well. I often bring this example. A child was born and raised in a faraway village, he or she finishes a school, comes to Yerevan, goes to a university, transfers to Synopsys after the second year of studies, successfully graduates, starts working at the company, gets a chance to train at Synopsys in the US. During seven-eight years, he or she undergoes some stressful situations, but quickly adapts to then all, and even adapts to the foreign environment. On the other hand, it is not an advantage, because Armenians quickly adapt to shortcomings too. They also emigrate because they can quickly adapt and succeed in new environments. I have talked with many of them, who did not achieve big things, but they still have a better life, and they say that they will come back once Armenia is doing better. But emigration, which is connected with the ability to adapt, has become an evil for us. As if that was not enough, lately, we have been shocked with the new research on gene pool from the UN. It turns out that Armenia is third in the world when it comes to the decrease in the number of girls born. About forty thousand boys were born in the last seventeen years, which could be viewed as a harmonic recovery from the war, if not for the fact that when informed about the gender of the child, parents often renounce girls. Our girls are beautiful, intelligent, devoted to family, they are good mothers and good employees. For example, women comprise only 11 percent of the IT sector in the USA, and the same indicator is 7 percent in the entire world, while in Armenia the percent of females in the IT sector is 35-40 percent. This is the gene pool we voluntarily deprive ourselves. So we have migration on one hand, and the demographic problems on the other… If the government does not undertake serious measures in the near future, it will get worse.
JH: In my family it’s me, my wife and our son and four daughters. Regarding the adaptability in the IT sector and working abroad, you are right. I also agree that it has a negative influence in Armenia. I meet with many young people, and I have noticed that they believe in destiny. They don’t believe on positive change. I always tell young people that you have to make an effort for a change in every country. Regarding women, I meet them in government, NGOs and media. A country should not let half of its population not to invest in country’s development. Various research and analysis show that in micro financing that female creditors are more conscientious. If a woman manages finances in the family, the expenses are more justified. Now we try to use the online involvement, this is outside the scope of government.
HM: Congratulations on having four daughters. I have two sons, but I also have a daughter-in-law, who I love like my own. I remembered a joke about the management of finances. A man says, “I value the hundred dollars, my wife doesn’t know about more than 50,000 dollars that she knows about.”
I want to talk about corporate social responsibility at the end. It is an integral part of the American business culture.
You and your wife have participated at the tree planting organized by Synopsys. We organize different initiatives together with VivaCell-MTS, but no matter how many times we invite other companies to join us, we don’t get much feedback. This is something that is mostly missing in other companies. This is a business culture that is not widely spread, meanwhile it is very popular abroad, where companies initiate and implement social programs, so the society starts to feel responsible for the problems.
JH: I have also participated at various CSR events organized by VivaCell-MTS and Coca Cola. It’s great and I am happy that the American companies took a lead. Perhaps the government should encourage such activities. Usually, a non-profit activity should somehow be encouraged, so there is a motivation to organize it. USA encourages such activities on a state level, and if somebody gives a donation, taxable amounts are decreased.
HM: Not only we don’t have an encouragement, but a new law has been passed, according to which, grant money is subject to VAT. We have raised the issue to the President and the State Revenue Committee.
JH: It is certainly a problem because the lack of opportunity forces people to search for grants for their initiatives. We should encourage new jobs and help small companies. I see opportunities for growth, which can become reality if the government takes steps towards removing some obstacles. Armenia is a country of talented people, but they should be given conditions to use that talent. The U.S. Ambassador to Armenia John Heffern was hosted by the Winners’ Club at Synopsys Armenia. Together with Vice President of Corporate Marketing and Strategic Alliances of Synopsys, Rich Goldman, the ambassador presented his biography and work experience at a “fireside chat” meeting. The direct communication with the American diplomat, the chance to hear him talk and exchange ideas presented a good opportunity for the students to get a feel of American thinking and the higher responsibility towards the country, which was emphasized in the ambassador’s answers. We should teach the American dignity to our students, so that they are focused on their own country. To strengthen that spirit, the Winners’ Club meetings are held, where the guest speakers present to students their biographies, achievements, commitment and necessary steps for the new generation. This country, where they have been born and raised, cannot wait to see the return of investments in their education.

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