An analysis of the main challenges that Yerevan now faces
A month has passed since Armenia’s ‘violet revolution’. The country is being lead by a new prime minister who came from outside the old system, and the new government, young and energetic, is completely unalike any other government that has been in power before.
But what has changed in Armenia, both within the country and within its foreign relations, especially with Russia and the West?
An attack on corruption
Over the course of the last month’s work of the new government, several corruption schemes have been uncovered.
They have affected all aspects of life and, as is being uncovered, these schemes were supported and built on shady agreements at the highest level.
The first to be taken down was the customs service, which for many years has been the foundation and moving force behind Armenia’s existing monopolies.
Another target has been illegal tax evasion.
All of these schemes were built on agreements between the oligarchs and the ruling Republican Party. The result: large monopolies with almost entire control over numerous sectors of the economy.
Moving away from ‘Russian’ agenda
A part of these anti-corruption activities of the new government clearly speaks about a change in Russia’s role in the Armenian economy.
The most obvious example is the annulment of a contract with Tashir Capital, which is owned by Russian-Armenian businessman Samvel Karapetyan, who Forbes says is one of the ‘kings of real estate’ in Russia.
Over the past two years, Samvel Karapetyan became the sole owner of Armenia’s electric energy grid. In 2015 he bought out Elektroseti Armenia and in 2017 he was awarded with the trust management of High-Voltage Power Systems in Armenia.
In Armenia and abroad, people said that Moscow itself had actually transferred Armenia to the trust management of its ‘own’ billionaire.
As if in confirmation of this speculation, in 2016 the top manager of Gazprom, Karen Karapetyan, was appointed prime minister of the country. Moreover, experts and the public say that he was the protégé of Samvel Karapetyan.
These events took place during the period when Serzh Sargsyan was the president of Armenia.
After an unsuccessful attempt at becoming a PM with absolute power, Sargsyan was forced to resign. The government, almost simultaneously, left behind ‘Russian protégé’ Karen Karapetyan.
The velvet revolution in Armenia is now becoming a revision of former agreements, including ones conducted between Armenia and Russia. Samvel Karapetyan, it would seem, has been excluded from these agreements.
he revision cannot go on without affecting other companies with Russian connections that control strategic enterprises and industries in Armenia.
For example, the public is already talking about the situation concerning the country’s railway system. The South Caucasus Railway, which is owned by the Russian Railways state company, uses Armenian railways free of charge. It is probably time for them to start paying.
Another company with Russian capital, GeoProMining, has also come up against serious problems in Armenia.
GeoProMining is involved in gold and copper-molybdenum extraction in the country. Recently, the leadership of the company made an announcement stating that a ‘nationalist approach’ is being shown towards Russian capital in Armenia.
The word ‘nationalism’ was used, it would seem, because of a demand to pay taxes and obey the law.
And lastly, the interests of Russian company Gazprom may also be affected. There are currently discussions being held that will most likely see a decrease in the price of gas in Armenia, in addition to electricity.
Russia and Armenia: confusion after the revolution
But despite the process of ‘cleansing’ the market of Russian monopolies, the new government of Armenia has made clear promises that it supports a strategic partnership with Russia.
Prime Minister Nikol Pashinyan, who has made bold statements to the effect that Armenia will not leave the Eurasian Economic Union nor the Collective Security Treaty Organisation which are both lead by Russia, is of the same sentiment.
The Armenian leadership is distinctly grateful to Russia for its lack of ‘interference’ in the period of the velvet revolution.
There were two important results that came about from the meeting held between Pashinyan and Russian President Vladimir Putin in Sochi on 17 May.
The first: An announcement on an upcoming shipment of anti-aircraft missile systems to Armenia.
The second: Russia’s agreement with Georgia to discuss the mechanism for launching ‘commercial corridors’ through South Ossetia and Abkhazia [regions of Georgia that unilaterally declared independence, which Russia and four other UN member states have recognized. Georgia and the broad international community insist on the territorial integrity of Georgia -ed].
But the context of these two important results is ambiguous.
Almost immediately after the meeting between Pashinyan and Putin, Syria recognized the independence of Abkhazia and South Ossetia. Few in the region doubt that Russia ‘asked’ Syria to make this move. Against the backdrop of the scandal that was raised in Georgia because of this, it became clear that little will come of the second point of discussion – the commercial corridors will be put aside.
Moreover, the Deputy Minister of Foreign Affairs of Russia Grigori Karasin, who leads negotiations with Georgia, recently announced ‘serious concern in Moscow over Georgia’s deepening cooperation with NATO’.
” ‘The military buildup’ of the South Caucasus via external powers presents a serious threat to Russia. In this situation, the Russian side has the right to undertake measures to strengthen its own security and that of its allies,” he said.
How does Russia intend to ‘strengthen its own security’? Is the delivery of missile systems to Russia its answer to NATO’s expansion?
Nikol Pashinyan, however, continues to boldly assert that no pressure will prevent military-technological cooperation between Armenia and Russia from happening – apparently, he meant US sanctions against the Russian military-industrial complex.
Is the delivery of missile systems to Russia its answer to NATO’s expansion?
Moreover, Pashinyan said that in Armenia they looked on ‘with interest’ at the 9 May military parade, where new military technology was exhibited. This was assessed as Armenia’s interest in new Russian strategic weaponry.
oreover, Russia is concerned that Armenia may decide to re-examine its relations with its strategic ally. Russia is concerned about Armenia also changing its position on the Karabakh conflict.
Nikol Pashinyan stated in Stepanakert on 8 May immediately after his appointment as prime minister that Karabakh must become a side in the negotiations and defend its own interests, which demolished the conception of the Karabakh conflict resolution of the past 20 years.
On 7 June, a meeting between the ministers of foreign affairs of Russia and Armenia took place in Moscow. One of the main questions, it would seem, was whether this will be Armenia’s official position on the Karabakh issue.
Oddly, the new secretary of the Armenian Security Council, Armen Grigoryan, who has on multiple occasions insisted that the country re-examine its relations with Russia, has recently changed his opinion, and says that now, as a representative of the ruling government, he is for good relations with Russia.
Such rhetoric for a new government is understandable – it is dangerous to spoil relations with the Kremlin right now.
But international experts caution the new government of Armenia. In particular, the director of the Biden Centre and the former Second Deputy Secretary of Defence of the United States, Michael Carpenter, believes that the Kremlin will do all it can to prevent the establishment of democracy in Armenia:
“There will be a lot of pressure on Armenia from the outside. It will not be visible on the level of ‘Pashinyan met with Putin’. The pressure will be behind the scenes, and will be whispered about in hushed voices. Don’t stray too far, don’t forget about Russia’s interests in Armenia. I think that Armenia will have a difficult time of achieving success but I don’t think that it’s impossible. I think that they can make progress and I wish this for them.”
he situation is made even more intriguing by Pashinyan’s visit to Georgia on 30 May.
This was his first official state visit. And for the first time in many years, a representative of the Armenian government spoke openly about the most difficult issue between the two states – Javakheti, or in Armenian, Javakh. The region is densely populated by Armenians.
In Georgia, the issue of the area becoming a potential separatist region is discussed often. It is possible that that is why the leaders of Armenia did not visit this region in the past: in order not to bring about suspicions that the Armenian authorities would support such attitudes, be them real or imagined.
But Nikol Pashinyan met with Armenian residents of the region, and offered them a new ‘formula’ for Armenian-Georgian relations.
“Georgia and the Georgian nation must be convinced that there is no conspiracy in the actions of Armenia and the Armenian nation, and that there will be no provocations against Georgia or the Georgian nation.”
He also said that Armenia and Armenians should feel assured that the same is true of the Georgian side.
The Western agenda
There are a number of promising events. Here are several of them:
- On 1 June, an agreement on the enhanced partnership of the European Commission with Armenia came into play on a temporary basis;
- The European Parliament has called for support for reforms in Armenia;
- The ambassador of the US to Armenia Richard Mills said that the US is examining plans to support Armenia. In particular, the country may be invited to participate in the Millennium Challenge. This was discussed during a visit to Armenia by the Deputy Secretary of State for European and Eurasian Affairs Bridget Brink.
The Millennium Challenge was formulated during the presidency of Georgia Bush Jr., and Armenia was one of the first participants in the project. Over the course of five years, the country was supposed to receive 235 million dollars for various projects.
But after the presidential elections of 2008 and the events of 1 March in which 10 people died during demonstrations against what were asserted to be falsified elections, Armenia was disqualified from the program as a country which had turned away from democracy and did not receive the last 70 million dollar installment.
Both the USA and the European Union know full well just what resources have been spent in Armenia. They have discussed on numerous occasions the possibility of fighting corruption schemes in the country, have made concrete demands and have even listed the names of the individuals responsible for corruption in the country.
But nothing has changed.
The new Armenian government does not need to put forward any such lists. All that is left is to understand just to what extent the country is ready to manage its internal resources.