Armenia – further changes and challenges ahead

Craig Oliphant

1 September 2018

Current developments in Armenia, following the April 2018 revolution (also known as the ‘Velvet Revolution’) and the advent to power of Nikol Pashinyan, seem to prompt a mix of optimism and caution. On the upside, while what unfolded in April was dramatic and unexpected, the change took place in a peaceful manner, and literally without a single shot being fired. As things stand, there is a lot of goodwill towards Nikol Pashinyan and his new coalition government. And local popular support for him personally is genuine, as was further in evidence at the large-scale turnout at the rally in Yerevan on 17 August to mark his first 100 days in office. He spoke of the “fundamental change” to usher in the “second wave of the revolution”.

There is certainly a need for significant change in the country, and in particular for urban renewal. There is a need to modernise the agricultural sector and to diversify energy supplies. There are opportunity areas within the country (the R&D ‘hub’ in Yerevan, for example) and observers would be well-advised to watch what happens or continues to happen amongst talented Armenian youth abroad. In this context, one should ask to what extent are those who left the country planning to return.

On the other hand, there is a massive amount of work to be done and challenges to be faced, including the vested interests of key actors to be grappled with. Armenia is not going to secure the kind of trade and investment it requires unless there is clarity on reforms going forward.

Also, on the sobering side, the new government (the Cabinet line-up was only formed in mid-May 2018) has come to power without much preparation. The new Armenian Government is a coalition made up of members of the ‘Civil Contract Party’ and the ‘Way Out’ bloc (Yelik), as well as Dashnaktsutyun and ‘Prosperous Armenia’. The new Foreign Minister (Zohrab Mnatsakanyan) and Defence Minister (David Tonoyan) are both well-regarded professional officials who have each previously served as deputy ministers in their respective ministries. These and other ministries have to contend, though, with severe shortages in civil service personnel and funding.

Complex situation

The new government faces a very complex situation. It inherits a legacy where nearly 30% of the country’s population lives below the poverty line. Armenia is not in a great position security-wise or from the economic standpoint. But expectations are now high, and time is not necessarily on the side of the government. So, the government is also bound to search urgently for tangible outcomes above any other.

One aspect of ‘tangible outcomes’ was that some eye-catching arrests began happening in the summer, despite the early pledge when Pashinyan took over power that there would be ‘no vendettas’. The most notable of the arrests – now overturned – was that of former president Robert Kocharyan who was remanded in custody for two months from 27 July. That was in connection with the brutal clampdown against protesters on 1 March 2008, as part of a 20-day state of emergency declared in that period to tackle large-scale unrest and demonstrations against the elections that brought Serzh Sargsyan to power. On 13 August 2018, Kocharyan was released from a pre-trial detention facility after Armenia’s Court of Appeals ruled that he could not be prosecuted for the 2008 post-election violence in Yerevan, or held liable for ‘actions deriving from his status’ at that time.

It remains to be seen what happens with a similar arrest of (among others) the former Chief of Staff of the Armenian armed forces, General Yuriy Khachaturov, holding the post of Secretary General of the CSTO, and whose arrest and release on bail on 27 July also prompted an expectedly jaundiced reaction in Moscow. In public remarks at the beginning of August, Russia’s Foreign Minister Lavrov said this “looks like a vendetta“, pointedly using the word for actions that Pashinyan a few months ago had pledged to steer clear of (EADaily, 1 August 2018). The reaction of Russia to recent changes in Armenia has thus far been subdued – but it seems the sharp change of tone not least over the “Kocharyan affair” had a bearing, indirect or otherwise, on the reversed decision through the Court ruling on 13 August. Robert Kocharyan has subsequently announced that he plans to run as a candidate in the next parliamentary elections.

New elections?

The current expectation is that snap elections are likely to be called in Spring 2019, and indeed should be held by no later than the end of May. In that sense the situation is already one of a ‘pre-election’ buildup. Nikol Pashinyan has a tight-rope to negotiate. He naturally wants to demonstrate some tangible outcomes. But he is also keen to avoid making clear-cut decisions one way or the other so as not to (unnecessarily) alienate the electorate.

In a welcome move, a commission on forthcoming elections has been formed. The commission allows the main political groups and parties in parliament to discuss possible changes in legislative provisions and the electoral law. An agreement has already been reached to put forward a proposal removing the ‘majoritarian’ system or component (for individual candidates in a first-past-the-post system) which favoured the previous ruling RPA (Republican Party of Armenia, HHK). Under this agreement, the ‘majoritarian’ system would be replaced entirely with proportional (party) lists alone.

Other key issues are still under discussion, including the vexed question of party funding or ‘charitable’ donations, which was exploited by oligarchs as a means to ‘buy’ influence or shape developments in the past. The problem area here is that ‘Prosperous Armenia’ and its tycoon leader Gagik Tsariukian are part of the current coalition and Tsariukian’s automatic approach is to continue to engage in familiar practices of buying support locally through largesse and other ‘charitable’ initiatives. This is therefore likely to become a point of tension within the coalition looking ahead. But overall, a key marker on the near-term horizon for domestic politics will be indicated by the substance and amendments to the Election Law. Meanwhile, Yerevan itself is still awaiting the election of a new mayor after the resignation on 9 July of the former (discredited) mayor Taron Margaryan. Elections for a new Mayor will take place on 23 September. The Republican Party (HHK) – whose ranks the previous mayor came from, and whose father was a former prime minister – announced it will not be submitting a mayoral candidate in the city elections.

Initial achievements

Among some of the initial achievements of the new political leadership (within the first 100 days) is the fact that measures have been taken in an ongoing process to tackle corruption in a range of areas, including taxation, customs, police, education and health. Oligarchs have been ‘invited’ to pay the taxes they avoided in the past, partly through cosy agreements made with the Sargsyan regime. And this has been effective to an extent: in the first few months since the April Revolution, more than $40 million US Dollars were raised additionally into the budget through this drive on unpaid taxes. Also, criminal cases have been opened against Sargsyan’s acolytes (including his extended family) on a range of charges of embezzlement and corruption.

The medium- to longer-term challenges are considerable. And the demands of the immediate term, as alluded, constrain room for manoeuvre. But expectations remain high. The medium- and longer-term demands, once the euphoria fades away, centre on maintaining and further building trust among the wider public towards the government, which includes ministries, agencies and other structures. The old adage remains as true as ever: trust takes months and years to build but can be lost in a moment. As part of this there is the slow, incremental process of ensuring that policies are the result of politics and technocratic competence rather than oligarchic rule. In a nutshell, the key long-term challenge will be ‘regaining’ a state which over the past two decades or more was treated by the RPA and the oligarchs linked to it as their private property or private ‘network state’ – and to regain it without adversely affecting the country’s defence capability.

The situation is likely to continue to be very fluid for the months ahead, as it has been since the early part of the year. In one sense, it can be said that the ‘Revolution’ has already morphed through four shifting phases or objectives:

  • “Reject Serzh Sargsyan”;
  • Get rid of the RPA;
  • Hold free and fair elections; and (now, looking ahead)
  • Win those free and fair elections.

Protests at Amulsar mine

A particular challenge in recent weeks, and since late June 2018, has been a series of protests and blockades outside a local gold mine, the Amulsar mining development, near the spa town of Jermuk (170km south-east of Yerevan). This has come from a standoff involving local residents, augmented by environmental experts and other activists concerned about potential ecological damage and campaigning for the right to live in a healthy environment, and pitted against the mine-owner Lydian International, an international company – and with the government authorities caught uncomfortably in-between. The situation partly reflects a wider context of a legacy of corruption and environmental damage from mining over many decades in Armenia, which has more than 400 mines.

Prime Minister Pashinyan initially called on the protesters blocking the newly-completed mine to disband – but to no avail. He shifted course quickly to show he is listening to local concerns. But he is also keen not to ‘spook’ other international investment. For now, a government-appointed working group has been set up to further investigate environmental concerns related to the Amulsar mining development and to report back. It is unclear how the situation will be resolved, and it is another significant test at this juncture for the new authorities. Lydian International, meanwhile, has made it clear that it will not hesitate to resort to international arbitration if the Armenian government decides to have the Amulsar mine shut down.

Regional context – more of the same?

On foreign policy and regional implications, since coming to power Nikol Pashinyan has sought to convey that internal changes in Armenia do not affect geopolitics, or in other words, that the substance of the country’s external relations remains as is. Despite saying different things in opposition, he has underlined that Armenia will remain in the CSTO, the Eurasian Economic Union (EES), the Customs Union and the Commonwealth of Independent States (CIS). His first visit abroad after becoming prime minister was to Russia (the EES summit in Sochi) in mid-May. He then went to Moscow in mid-June for a bilateral meeting with Vladimir Putin. In mid-July Pashinyan was in Brussels, partly to attend the Euro-Atlantic Partnership Council (EAPC) at summit level as part of the NATO Summit on 11–12 July. The main message he delivered in Brussels, including in his meeting with the European Commission President Jean-Claude Juncker on 12 July (and also during the visit of German Chancellor Angela Merkel to Yerevan on 24 August), is that Armenia is no longer a corrupt, oligarchic, undemocratic state failing to represent the will of its people. And his strong card in his approach is the ‘legitimacy’ factor. He has enough support from the Armenian people who will stand behind him, at least in the short- to medium-term, as he charts the waters ahead.

Russia’s approach

As mentioned above, Moscow’s stance over the coming months is going to be a very important factor in determining some of the next steps in Yerevan, and therefore crucial to watch. Thus far, until the arrest and detention (and subsequent release) of Robert Kocharyan, Russia’s approach towards changes in Armenia had been fairly restrained. But it is clearly looking for a number of assurances behind the scenes. And the ‘levers’ that Moscow has at its disposal are many, whether in the energy sphere, ‘strategic assets’, or the wider field of arms supplies. One overarching concern that persists comes back to the familiar mindset of the Kremlin: namely, that street protests do not or should not ultimately be seen to win out. Former Georgian president Mikheil Saakashvili’s reported remarks on 2 August, in which he reiterated an earlier claim from April taking some credit for the revolution in Armenia, are (at best) unhelpful in this regard, and really only serve to aggravate Russian perceptions and stir sharp reactions. There are those furthermore who might, for example, draw comparisons between Nikol Pashinyan and the Russian opposition activist Aleksandr Navalny. While there are more differences than similarities between these two personalities, nevertheless some uncomfortable (for Moscow) general parallels do exist insofar as they are both anti-corruption campaigners who spent time in prison and whose campaigns resonate with the public mood.

NK prospects

Finally, on Nagorno Karabakh (NK)–the long-running unresolved conflict in the region–the conventional wisdom given regional constraints is there is unlikely to be any direct read-across or easing on the NK gridlock arising from changes in Armenia more widely. On the one hand, Nikol Pashinyan has made two important statements in recent weeks. Firstly, he has stated that he is ready to discuss peace with Azerbaijan on Armenia’s behalf, but not on NK’s behalf simply because he does not represent the people living there who have their own institutions. And secondly, he has said that there should be peaceful messages and signals coming from Baku to facilitate the consideration of a compromise settlement or resolution. That is because Baku’s current militaristic approach will only constitute a broader threat to peace in the NK region. However, President Ilham Aliev made Baku’s position clear in remarks on 2 August. He was dismissive of the idea of a new initiative of talks, involving Stepanakert. He said that Baku wants peace, but it also wants its territory back. And until that territory is returned, he said, ‘there will be no peace’ (Turan, 2 August 2018).

Based on that stance from Baku, and the limited room for manoeuvre for the new government in Yerevan ahead of expected elections, it is hard to see any early prospect for progress in talks. But it may not be beyond the realms of feasibility to achieve at least some easing of the aggressive rhetoric and militaristic pressure from Baku. An area that could (and I argue should) be explored is the scope for reinstating a high-level ‘hotline’ between Baku and Yerevan. That might be something to watch, and not least perhaps in the context of President Aliev’s visit to Moscow, which is taking place on 1 September, where the main focus beyond NK and regional security is likely to be on issues of bilateral economic cooperation. Then again, on the idea of a hotline, there is invariably the disconnect between on the one hand ‘western’ analysis of what should or could happen, and on the other hand local patterns of behaviour in the Caucasus which do not always conform to what might seem a desirable or logical way forward.

Image details

Title photo caption: Nikol Pashinyan, Armenian Prime Minister, on the right, and Jean-Claude Juncker.

Title photo credit: EC Photo/Etienne Ansotte

About the Author

Craig Oliphant

Craig Oliphant is a Senior Adviser in the NGO sector, at the London-based Peaceful Change Initiative (PCi).

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