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By Hayk Khanumyan
The ongoing process of restructuring Armenia’s system of state strategies can formally be viewed as a change in the number and structure of strategic documents. However, the substance of these changes goes beyond mechanical consolidation. The initiative to develop six major strategies, if implemented according to a comprehensive logic, implies a transformation of the state strategic management system at the levels of strategy development, priority setting, financing, implementation, and monitoring.
This process is particularly important in the context of the government’s strategic management framework. The framework links the implementation of the government program to a five-year action plan, monitoring of its implementation, and annual reporting. In other words, a certain chain is already emerging within the public administration system, from policy priorities to actions and their implementation. The main significance of the six major strategies should be to establish a clearer strategic level at the top of this chain, rather than simply merging existing documents.
In preparing this article, we met with officials from the Office of the Prime Minister and the Office of the Deputy Prime Minister, representatives of the World Bank’s Armenia office, as well as experts from consulting firms involved in the strategy development process. These discussions reveal differing assessments of the process, but at the same time allow us to identify several key issues.
We compare this process with a similar one in the Czech Republic. The Czech Republic also sought to establish a more unified strategic system by adopting an overarching framework for the country’s development through 2030. However, subsequent assessments by the Organisation for Economic Co-operation and Development (OECD) show that the structural consolidation of strategic documents was not sufficient to overcome fragmentation in strategic governance.
From Fragmentation to an Integrated Strategic System
The large number of strategies is usually viewed as a shortcoming of a governance system. However, the problem cannot be reduced simply to the number of documents.
A strategic system is effective when individual documents form a certain hierarchy and logical chain, from overall national objectives to sectoral objectives, from those objectives to measurable targets and actions, and ultimately to financial and institutional resources.
The absence of any link in this chain can turn a strategy into a standalone document that exists to some extent independently of the governance system.
Therefore, the problem of a large number of strategies can more accurately be defined as a problem of fragmentation in the strategic system. This fragmentation may manifest itself through inconsistencies in priorities among different strategies, differences in their status, duplication, weak links between them, and, most importantly, insufficient links between strategic objectives and state resources.
The process currently underway in Armenia should address this problem.
During discussions with the World Bank, the existence of a large number of strategies with different statuses was identified as a key problem. The consolidation of strategies and the establishment of core priorities were proposed.
The consolidation of strategies can address two interconnected problems.
The first is the creation of a hierarchical structure for strategies. There should be a limited number of core strategic priorities under which more specific sectoral objectives and actions are organized.
The second is the mechanism for managing strategies. Even a properly structured strategic system will not work if its objectives are not linked to the budget, accountability, and measurable results.
An important feature of the approach currently being proposed in Armenia is that strategies should be linked to the medium-term expenditure framework and the annual budget. In other words, a strategic objective should no longer be viewed as a policy statement independent of the financing process.
This should be the main outcome of systemic change. If, for every major objective of a strategy, it is possible to identify the necessary resources, the responsible agency, a measurable indicator, and an implementation deadline, strategic planning can be integrated into the core cycle of public administration.
The strategic management framework envisages strategies in six main areas: security and foreign policy; human capital and welfare; economic transformation and sustainable development; territorial and infrastructure development; justice-sector reforms; and public administration reforms.
The scope of these areas demonstrates that this is not simply about merging individual sectors. Each strategy brings together interconnected policies.
For example, the Human Capital and Welfare Strategy includes demography, healthcare, education, science, culture, social protection, and employment. The Economic Transformation and Sustainable Development Strategy brings together the structural and green transformation of the economy, natural resource management, innovation, high technologies, trade, the financial system, and investment. The Territorial and Infrastructure Development area includes transport, spatial planning, water systems, waste management, energy infrastructure, and other areas.
Such grouping can make it possible to view policies not only through the lens of individual ministries and agencies, but also within the framework of broader national objectives.
What Armenia Can Learn From the Czech Experience
In pursuing consolidation, it is worth looking at other countries that have gone through similar processes and understanding the problems and obstacles they have encountered or are encountering along the way.
In 2017, the Czech Republic adopted the Strategic Framework Czech Republic 2030. The OECD describes it as a “strategy of strategies,” a document defining the country’s overall development direction through 2030.
It included six priority areas: people and society, economic model, resilient ecosystems, communities and regions, global development, and good governance.
From a structural perspective, this was a logical solution: numerous sectoral policies were supposed to fit within a single overarching strategic framework.
However, subsequent developments showed that the existence of a high-level strategic document was not sufficient.
Czech Republic 2030 did not replace sectoral and agency-level strategies. Their existence and proliferation continued in the Czech Republic. According to an OECD study, the system contained more than 300 sectoral and agency strategies. What is interesting is that it was possible to create a single overarching strategic document while simultaneously maintaining fragmented strategic governance.
However, in the report mentioned above, the authors note that weak central coordination capacity had contributed to the proliferation of strategies and priorities, inconsistencies among them, implementation problems, and limited links with the government’s overall priorities.
The report points to the need to distinguish between a strategic document and a strategic management system.
A strategic document can set objectives. A strategic management system must determine which of those objectives are priorities, who is responsible for them, what resources will be used to implement them, how progress will be measured, and how objectives will be reviewed as circumstances change. The Czech Republic encountered problems at this second level, as the degree of implementation of strategies remained relatively low.
According to the OECD assessment, a significant share of the strategies was not being implemented. The reasons cited included insufficient human and institutional capacity, lack of financial resources, inconsistencies between strategies and the government’s current priorities, and, in some cases, the formalistic development of strategies.
This circumstance allows us to formulate the main challenge of strategic planning more precisely: developing a strategy and implementing a strategy are two different institutional capacities.
The first requires analysis, goal-setting, and planning. The second requires the stability of policy priorities, administrative capacity, financing, coordination, and continuous oversight.
If the second is absent, improving the first produces limited results.
Building Capacity Inside Government
Another important issue emerging from discussions about the consolidation of strategies in Armenia is who should develop the strategies.
According to one approach, the development of strategies should not be outsourced excessively to consulting organizations. The state system should have sufficient internal capacity to formulate its long-term objectives and the means of achieving them.
This approach has an important institutional rationale.
If a strategy is developed by an external consultant, the document may be professionally strong, but its implementation will nevertheless remain the responsibility of the state system. Therefore, strategic planning capacity should also exist within the institutions that will ultimately implement the strategy.
Those who hold a contrary view point to the risks arising from this approach. If the public administration lacks sufficient professional capacity for strategic planning, abandoning external consulting could create serious methodological problems.
To mitigate this risk, training, standardization of methodologies, and the development of professional capacity during the strategy-development process are important.
One of the objectives of the training conducted by the World Bank is precisely to develop the capacity of public-sector specialists to distinguish between objectives, targets, and actions, and to develop results frameworks. Nevertheless, experts who attended the presentation of the results framework for the Human Capital and Welfare Strategy have raised concerns about the limited capacity of staff from the government agencies that participated in this work.
Thus, the consolidation of strategies simultaneously raises the issue of developing state institutional capacity.
There is another important risk.
A government agency naturally tends to include in the strategy-development process those actions that fall within its control and whose implementation is relatively realistic. However, the purpose of strategic planning is not only to coordinate actions that are already possible or underway, but also to define objectives necessary to achieve the desired change.
If a strategy is limited to coordinating actions that an agency is already implementing or can easily implement, it loses its strategic character and becomes an action plan.
Therefore, the development of strategic planning capacity within the public administration should also be accompanied by the development of the capacity for critical and long-term thinking.
This is particularly important as the primary responsibility for strategy development is gradually shifting into the public administration itself.
The strategic management system can be conditionally presented as three consecutive stages: defining objectives; allocating a budget for those objectives; and establishing implementation mechanisms with measurable monitoring tools.
If the final component is absent from this chain, a strategy can continue to exist even when its objectives are not being achieved.
In the approach proposed in Armenia, the use of a management dashboard is considered important for monitoring. Such a system can bring together the main measurable indicators of strategies, their responsible entities, and the progress of implementation in one place.
However, a dashboard can be effective only if the indicators have been properly defined in advance. If they measure not outcomes but merely the number of completed activities, the system can show high performance without any real change.
Therefore, the quality of the monitoring system depends to a great extent on the quality of the objectives and indicators established during the strategy-development stage.
What Would Make the Reform Work?
The process underway in Armenia can be viewed not as a program to reduce the number of strategies, but as an attempt to restructure the strategic management system.
The first level is structural: to limit the number of strategies and organize the strategic system vertically.
The second is financial: to link strategic objectives to the medium-term expenditure framework and the annual budget.
The third is managerial: to create a system in which every strategic objective has a measurable indicator, a responsible agency, the necessary resources, and regular monitoring.
Only the combination of these three levels turns the consolidation of strategies into a change in the governance system.
Otherwise, the six major strategies may simply replace numerous smaller strategies while retaining their main shortcomings.
If we consider the Czech example, one important point stands out: creating a hierarchy of strategies and reducing their number, where necessary, may be only the first step.
The creation of Strategic Framework Czech Republic 2030 did not eliminate the proliferation of sectoral strategies because it was not supported by sufficient strategic coordination. The OECD’s criticisms and recommendations concern not only reducing the number of strategies, but also coordinating their development and implementation, strengthening central government capacity, improving the interconnections among strategies, and conducting regular reviews.
In the case of Armenia, too, the key issue is not the consolidation of strategies itself, but what kind of hierarchy, accountability, and linkages will be established around these six strategies.
In this sense, the success of the consolidation of strategies should be assessed according to the following criteria:
- Have the government’s priorities become clearer?
- Are they reflected in the budget?
- Does their implementation have clearly identified responsible entities?
- Are there measurable outcomes?
If the system can answer these questions positively, then the consolidation of strategies will be not merely a rearrangement of documents, but a qualitative change in the public administration system.
If not, the six strategies may simply replace numerous smaller strategies without substantially changing how the state sets priorities, allocates resources, and evaluates results.
This article was prepared by the Regional Center for Democracy and Security (RCDS) with the financial support of the European Union within the framework of the “Sustainable, Impactful and Inclusive Civil Society” (SIICS) Project. Its content is the sole responsibility of RCDS and does not necessarily reflect the views of the European Union.
The “Sustainable, Impactful and Inclusive Civil Society” (SIICS) Project is implemented by the Democracy Development Foundation (DDF), People in Need, and the Boon Scientific and Cultural Foundation. It aims to strengthen the role of civil society in Armenia as a resilient, independent, and trusted actor in democratic governance, policy development, and community empowerment.