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Risks For The Armenian Authorities

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  • Risks For The Armenian Authorities


    Vestnik Kavkaza
    Nov 27 2012

    Susanna Petrosyan, Yerevan. Exclusively to Vestnik Kavkaza

    Less than three months remain till the presidential elections in
    Armenia. Today the political forces analyze their advantages and
    possible risks. The main competitors are the authorities represented
    by President Serge Sargsyan and the party Prosperous Armenia headed by
    tycoon Gagik Tsarukyan. Internal political prospects can be predicted
    after the analysis of the system's stability in three directions -
    economic, internal political, and foreign political risks.

    Economic risks

    The discussed state budget project for 2013 is heavily criticized by
    the opposition. According to the most conservative estimate of the IMF,
    35% of Armenian economy is in shadow; Armenian experts are sure that
    this figure achieves 50%. The other important consequence is paying
    the foreign debt which is more than $400 million - it is a huge sum
    which is twofold greater than the sum allocated to paying the debt in
    2012. Many experts believe that the government will take new credits
    for serving the current debt. These suggestions were confirmed by the
    deputy financing minister Vardan Aramyan. Negotiations on getting a
    new credit are going on, but either the EU or Russia hasn't given a
    positive answer.

    One more economic risk is a negative business environment: despite the
    government's statement on development of minor and medium business,
    in fact this business is oppressed in favor of major monopolists.

    The current economic risks may enforce after the growth of prices
    on Russian gas, which is planned since April 1, 2013, according to
    certain sources. Gas prices growing, allocation of huge sums for debt
    service, and monopolization of economy which causes migration will
    create tension in the socio-economic sphere. To resist the risks the
    government should have necessary reserves which are few. The state has
    to collect taxes properly and reduce the so-called "shadow segment"
    for providing these reserves. It means damaging interests of tycoons
    who are closely connected with the authorities.

    Therefore, the socio-economic situation will remain tense, but we
    cannot say that it is hopeless and can cause a social burst. Most
    probably, the system's stability will maintain in the socio-economic

    Foreign political risks

    The dominating directions of the Armenian foreign policy are settlement
    of the Nagorno-Karabakh conflict, Armenian-Turkish relations, and
    relations between Armenia and the key players in the region - the USA,
    Russia, and the EU.

    Tension remains on the firing line in the Karabakh conflict, but
    it became permanent. A possibility of reviving wide-scale military
    activities is thought to be tiny by many Armenian experts. The results
    of the elections will hardly cause escalation of the conflict.

    Regarding the second direction of the foreign policy, as the
    Armenian-Turkish border is closed in Turkey's sole discretion,
    there will be no surprises. Moreover, a Russian military base which
    provides Armenian security is situated new the border in west Armenia
    and plays an important role in providing stability in the region.

    As for foreign players, Brussels and Washington support the
    administration of Serge Sargsyan. They are very interested in victory
    of the current authorities. Firstly, Sargsyan promised and signed
    the Armenian-Turkish protocols in October 2009. Secondly, he has
    many times stated on his readiness to sign the Madrid Principles of
    the Karabakh settlement. The solution of both problems is connected
    with the West's striving for diminishing Russia's influence in the
    South Caucasus. Signing of the Madrid Principles opens a way to
    the settlement of the conflict and weakens Russia's influence. Key
    importance (for the US especially) is gained by the protocols on
    normalization of the Armenian-Turkish relations, including settlement
    of diplomatic relations and opening communications. Fulfillment of
    the protocols will weaken Russian influence on Armenia. Considering
    this fact, Washington and Brussels try to hold Sargsyan in power. All
    international institutes which are controlled by Western countries
    will support him in the coming elections.

    At the same time, the position of Russia, one of the key players in
    the region, toward the Armenian authorities is still dim. Moreover,
    it seems Russia doesn't want to be involved into the process at all
    or at least distances itself from it.

    Ahead of the parliamentary elections in 2007 and the presidential
    elections in 2008, Russia expressed political support of Sargsyan.

    Today we cannot see this. Long time has passed since any important
    Russian figures visited Yerevan. In late summer it was discussed
    that President of Russia Vladimir Putin would visit Armenia. However,
    it didn't happen.

    Internal political risks

    The Republican Party of Armenia is a quite strong organization which
    controls force structures, the government, the parliament, and has huge
    financial capacities. At the same time, today Armenia experiences
    a tendency to forming an alternative pole to RPA - it includes
    Prosperous Armenia and the Armenian National Congress. Probably the
    Dashnaktsutyn Party will join these forces. This alternative pole can
    present a unified candidate, and most probably he would be a tough
    competitor for Serge Sargsyan in the elections. Nobody believes in
    social polls in Armenia; their results often disturb orientation in
    the internal political situation. However, the social attitude to the
    current authorities is expressed in activeness of social initiatives,
    numerous protest demonstrations near the government building, the
    Presidential Palace, which are connected with the authorities' policy
    and unfair court verdicts.

    According to observers, Sargsyan has the biggest anti-ranking among
    politicians. In the situation when the alternative pole is being
    formed and the social support is so low, account on "dead souls"
    (about 500 thousand votes of citizens who are not in the country at
    the moment), which is normal for RPA, can lead to serious accidents.

    If the authorities ascribe a half a million votes to them, it can
    explode the society.

    Speaking about internal political risks for the system, the open use
    of damaging information should be noted; it is the first time in the
    Armenian political life. Until now damaging information has never been
    used openly in election campaigns. There were only threats to use it,
    but the authorities broke the tradition. I mean damaging information
    against the former foreign minister, the member of Prosperous Armenia
    Vardan Oskanyan. The power opened Pandora's Box by the incident; and
    probably soon serious damaging information against the authorities
    will appear.

    It should be realized that there are more participants in the
    presidential elections than in the parliamentary elections, as
    voters understand clearly whom they elect and what for. Moreover,
    200-250 thousand voters are labor migrants who come to Armenia for
    winter. The majority of these people will hardly support the power
    which forced these people leave the country in a search for job.

    Nevertheless, the system is relevantly stable in all three directions.

    However, it is difficult to say whether the stability will maintain
    in the certain extreme situation.