Social Capital in Armenia | Babken Babajanian

The lack of social capital is often seen as one of the main factors holding back political, social and economic development in the South Caucasus. Social capital here refers to the trust that makes cooperation possible. Without cooperation, commentators note, few ventures can succeed: successful farming relies on sharing experience, seeds, marketing channels; party-based (as opposed to personality-led) politics calls for striving towards shared political goals; even corporations require some social glue if they are to succeed.

So how does one build social capital? One response is the social investment fund model. Favored by the World Bank, the idea is that communities receive funds for investment into their infrastructure (school windows and heating; that one bridge that connects you to the highway; irrigation for the fields; or even just water for the households), but only if they cooperate successfully, and display initiative and community-based bottom-up decision-making. Babken Babajanian, an LSE-based scholar, has examined how these programs worked in Armenia. He relied primarily on qualitative interviews throughout 12 communities.

His finding is that although the infrastructure improved, the process got stuck somewhere between top-down and bottom-up. Ultimately, the success of all of the projects relied on the mayors. Where mayors were "developmental", the community became energized. In other cases, make-do mayors just used social investment funds as an additional source of revenue.

Babajanian argues that ultimately the larger political context often remains stronger than local projects. He seems to suggest that maybe more of a political mobilization is required to change old habits of interaction. The paper provides an excellent overview of the literature. We would have been curious to hear more about how exactly interventions impacted on the views and attitudes of the community, specifically whether they at least helped to create a sense that cooperation is a desirable goal. Arguably such a transformative experience can be beneficial.

The paper, "Promoting community development in post-Soviet Armenia: The social fund model." Social policy and administration 39, no. 4 (2005), pp. 448- 462, can be made available in CRRC libraries.

Barriers to Cooperative Ventures in Rural Georgia: Feisty Farmers

Much has been made about the collapse of agriculture in Georgia. From the overgrown tea plantations surrounding Zugdidi to the sere fields that used to be replete with apples in Gori, one encounters fallow land wherever one goes.

The international community and increasingly the Georgian government itself have been asking how successful agricultural ventures can be increased throughout Georgia. Sergo Baramidze, a CRRC fellow, set out to investigate barriers hindering the development of cooperatives and other forms of business partnerships in the rural areas of West Georgia.

Baramidze found that in rural communities of Georgia, peasants and small-scale farmers tend to be self-reliant and not interested in forms of cooperation, such as agricultural or credit cooperatives. For instance, only 5% of the credit unions developed through the World Bank attained a modicum of success.

The researcher highlighted five main barriers hindering co-op developments in rural areas of Georgia: 1) peasants and small-scale farmers are unfamiliar with the benefits of cooperation; 2) farmers are not educated about the principles of community resource management; 3) there is no concrete plan for the development of small farm cooperative markets in rural communities; 4) villagers distrust each other too much to cooperate; 5) a lack of financing exists for agricultural development.

In order to improve co-op development in rural areas, Baramidze suggests developing cooperative management training materials based on recommendations developed by the Food and Agricultural Organization (FAO) and Credit Agricole and adopting them to the local Georgian environment taking into consideration aspects of Georgian cooperative heritage – soviet farms (kolkhoz) and Georgian co-ops that existed before the Soviet revolutions in 1917 and 1921 – that may still be useful in contemporary Georgia. Moreover, Baramidze suggests incorporating the best types of social interactions of communities existing in rural Georgia’s day-to-day life into the business cooperation. For example, Baramidze believes that practices developed from Georgian eating and drinking culture such as the unique method of delegation of toasts to other members of table (alaverdi) could be transferred into the business life of rural communities.

The idea of using traditional practices and incorporating them into modern democratic traditions is an exercise most certainly worth further consideration.