The Diagnos of Economy


Executive Summary

This document is the result of the socioeconomic assessment of Shushi. It is intended to be the foundation upon which coordinated and purposeful development occurs so that Shushi can regain her form status as the cultural center of Armenians. This assessment is but the first stepping stone in a long road to the future vision. The offered vision is one from the people of Shushi and all of Karabagh and is simply articulated and expanded upon by Business Pareta, LLC in their assessment work. Business Pareta, LLC is hopeful that all stakeholders will converge and work together to realize this combined vision of Shushi.

Introduction of Shushi


Shushi is a small town in NKR with not more than 3000 people in population. During 19th and 20th centuries, Shushi was one of the cultural and economic centers in Caucasus. In the beginning of 20th century there were more than 20.000 Armenian inhabitants in Shushi. During the soviet time, Azeri leaders carried out the assimilation or dispersion of the Armenian population of Shushi.

In 1992 Armenian forces liberated Shushi during the war for freedom of Karabagh.

Now, the town of Shushi is a symbol of the Armenian cultural renaissance as well as a symbol of the centuries of Armenian culture. Shushi is the symbol of national pride having overcome so many obstacles to ensure the Armenian culture and history continues in this ancient capital.

Goals of the Assessment

In the last quarter of 2009, Hayastan All Armenian Foundation (HAAF) initiated the economic assessment of Shushi to measure the following:

  • to assess current economic situation in Shushi,
  • to identify the future vision of Shushi,
  • to create a master plan for the physical and economic reconstruction of Shushi.

Implementing Organization


Shushi’s assessment was carried out by Business Pareta, LLC, a private consulting company specializing in community development, local strategic planning, start up business development and business advice and planning. Having operated in across all of Armenia, Business Pareta has helped found and develop over 80 successful enterprises as well as helping to establish investment funds and portfolios for external investment. Also, Business Pareta is proud of its community support having assisted in the development private and third sectors in 15 Armenian communities.


To Whom the Assessment May Concern:

The following report is the product of the efforts of Business Pareta, LLC to assess the economic realities of Shushi and to offer the beginnings of a master plan to realize the cultural and historical place of Shushi. Business Pareta asks that local, national and international stakeholders engage in a healthy discussion about how to realize the offered plan. The assessment was written for all possible investors but in particular, we expect the following investors and supporters to be most interested:

  • Hayastan AAF,
  • Institutional Donors of HAAF,
  • Current investors in Shushi,
  • Local businesses,
  • NKR Government and local administration,
  • Social sphere organizations,
  • Business support organizations, which are interested on Shushi’s development.

Master Plan Summary


The table below is the summary of the time bounded activities that must occur to reach the 2015 vision of Shushi. The table is divided into three sectors, Private, Public and Third (NGO) Sector and responsibilities and actions have been duly described. The actions described come from the logical assessment of the economy and the assessment attempts to give a starting point for discussion to gain agreement about the development timeline. Business Pareta hopes to see each of these issues expanded upon during the 2010 planning year and as a part of that process all stakeholders will have input and consensus reached about how to achieve the stated vision.

Table of master plan 2010- 2015:


Current situation


Year of planning


Year of infrastructure development


Year of construction and training


Year of Services establishment


Year of advertising and development



Private sector

Few, weak businesses: 10 stores, 8 restaurants, 2 hotels comprising 20 rooms.

Community assessment, comprising macro and micro economic structures for economic development

Tourism market assessment in Diaspora

Projection of construction of real estate development in Shushi

Development of Services for Education, Cultural and Tourism sectors.

Advertising in Diaspora

Tourism cluster insures Shushi as cultural, educational, ethnic, religion, and ecotourism center of Armenians

Poor services.

Investment environment assessment

Tourism market assessment in Armenia

Construction or reconstruction of buildings in historical center of Shushi

Developments of Agencies who will deliver training ensure quality services for hospitality training.

Advertising in Armenia

Average number of tourists in Shushi is over 300 persons per day on average

Construction of 2 new hotels with 100 rooms, remodeling of the old bath and bazaar.

Assessment of investment opportunities

Educational market assessment in Armenia and Diaspora

Construction or reconstruction of hotels, B&Bs, restaurants, museums, educational institutions

Development of transport services that ensure clean, reliable and cost-predictable transport

Establishment of small and large businesses in tourism cluster resulting in registered, operating businesses



Assessment of investment barriers

Purchasing or renting of real estate in Shushi

Establishment of working mechanisms for services, trainings for employees

Founding of private galleries and shops to offer tourist focused traditional arts and crafts.




Business plan development for possible investment


Development of partnerships for tourism services between Shushi / Stepanakert and main centers of Diaspora



Public sector

No governmental support for businesses in Shushi

Setting the general construction plan of Shushi. Planning of the physical infrastructure development

Construction of physical infrastructures including roads, water system, gas distribution, electricity distribution and phone and internet utilities.

Creation of Shushi’s strategy for tourism development including all stakeholders of the tourism cluster

Leading of tourism cluster development initiatives and supporting the advertisement of Shushi’s tourism cluster

Public sector ensures Shushi as cultural, educational, and tourism center for Armenians and all who appreciate the Armenian history.

Construction of water pipeline for new water supply.

Special laws and zoning regarding the historical center and investment law giving tax advantages for investment

Reconstruction of historical buildings in the center of Shushi, including the ancient defensive wall.

Continued development of laws and rules supporting further investment and development of services for the educational, cultural and tourism clusters



Moving of Ministry of Culture, the General Court, and the Stepanakert Branch of the Armenian Agricultural University from Stepanakert to Shushi.

Reconstruction of the Stepanakert Airport.

Development of Small and Medium Enterprise support strategy in Shushi




Development of educational development and culture development strategies

Establishment of state museums of art, culture, and history




Third (NGO) Sector

Very few Non-Governmental Organizations (NGOs) exist to aid in social development.

Involvement of current and future investors in the development of a healthy third (NGO) sector to develop culture, history and education

Founding and strengthening of fledgling NGOs to allow them to quickly assist in the development of Shushi

In support of sustainability, the involvement of NGOs in the delivery of training and capacity building

Investment by the All-Armenian Foundation and other supporting, international foundations to promote and advertise Shushi on the world stage

Strong NGOs that focus on the cultural development of Shushi and surrounding areas

Interest of All-Armenian Foundation and other external foundations in development of Shushi as the Cultural and Historical Cen-ter of Armenian knowledge and experience.

Forming and promoting within NKR, Armenia and the Diaspora the concept of Shushi as the rightful center of Armenian culture and history

Encouragement of the Third (NGO) Sector to undertake networking and fundraising activities to meet development needs that are not met by the private or public sectors.

Encouraging the greater Shushi Community and the supporting Foundations to found and develop museums and exhibitions that champion Armenian culture and history.

Founding and development of Business Community NGO to provide quality assessments and business community planning to further cluster development.

Continued support and development of the cultural sites and new museums that operate for the greater good of Shushi and all Armenians.

A developed business NGO community that provided further planning and integration of businesses for cluster development

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