| No 4 | July to August 2007

ARMENIA | Trends in Conflict and Cooperation

The political situation in Armenia for this period was dominated by preparations for the country’s approaching presidential election, set for February 2008. This pre-election period consists of a rather uneven contest between the country’s still divided opposition and the presidential front-runner representing the ruling elite, Prime Minister Serzh Sarkisian. While hindered by a degree of unpopularity, which was confirmed by the findings of a public opinion survey in late August, the Armenian premier still holds a firm position as the unofficial successor to outgoing incumbent President Robert Kocharian. As the latest in a series of quarterly surveys designed and coordinated by the U.S.-based Gallup Organization and commissioned by the U.S. International Republican Institute (IRI), the survey revealed that Sarkisian has the support from a mere 11 percent of the population. A trend of isolated, yet disturbing violence has also emerged in recent months (see Country Stability and Conflictive Domestic Events (relative) last Update) and unlike the previous period, which experienced a slowdown of conflictive events after the parliament elections in May, it suggests a potential for greater conflict as the election approaches (see graph). This conflict is not defined by a traditional clash between the ruling authorities and the marginalized political opposition but is more of an internal competition within the political elite. The opposition, on the other hand, has attempted to overcome its inherent divisions and rivalries, which have served to fragment and marginalize it for so long. The leaders of five opposition parties met in late August to discuss the “hypothetical possibility” of closing ranks behind a single challenger to the incumbent leadership candidate in the presidential election. But even these talks soon broke down over the competing ambitions of the rivaling opposition figures resulting in a failure to Source: FAST event data even agree on the selection of a unified candidate. The talks did lead to an unexpected turning point for the country’s opposition, however. This turning point was first revealed by the election results with the emergence of a new opposition replacing the older, more traditional opposition in the new parliament. This also means that the “old guard” opposition, including Stepan Demirchian (People's Party of Armenia), Artashes Geghamian (National Accord party) and Soviet-era dissident Paruyr Hairikian (National Self-Determination Union), has past its political prime. Their political irrelevance is apparent by their lack of success in past presidential elections and they are seen as offering little new in terms of platform or promise. Other opposition heavyweights have also failed to emerge as serious contenders. The National Democratic Union Chairman Vazgen Manukian, whom several opposition parties jointly backed in the 1996 presidential ballot, did not even bother to attend the opposition negotiations because he had already announced his intention to participate in the 2008 election. The former Prime Minister and Hanrapetutiun (Republic) party leader Aram Sargsian has hinted that he would support former President Levon Ter-Petrossian should the latter decide to run. Thus, the emergence of a newer, younger and generally more dynamic opposition combined with the demise of the “old guard” tends to guarantee a leading role for former Foreign Minister Hovannisian. The former Parliamentary Speaker Artur Baghdasarian (by no means a new political figure) joined the opposition ranks late in summer of 2006 and was able to still retain a platform in parliament. Despite the significance of a new, more dynamic and younger opposition, the closed nature of the Armenian political system inherently limits and restricts the impact and power of any political party or group seeking to counter the entrenched ruling elite. In addition, each of these opposition leaders faces their own challenges. Baghdasarian, for example, has been seriously weakened by a series of internal problems and defections from his Orinats Yerkir party. Hovannisian is also hindered by a sense of insecurity in his new role as deputy. He seems not yet comfortable or assured in his role as parliamentarian and still articulates a political platform more appropriate for a foreign minister than a member of parliament. For example, his recent introduction of a new bill in parliament calling on Armenia to recognize the Nagorno-Karabakh Republic (NKR) as an independent state is only the latest in a series of statements and political moves reflecting a new “hard line” and more maximalist nationalist agenda. While the move was most likely a tactical play for nationalist populism, the response was widely negative even from within the traditionally more hard line Armenian Diaspora. Similarly, his release of a formal statement welcoming the recent election of Turkish President Abdullah Gül was rather inappropriate. This is especially since he was the only parliamentarian to make such a statement suggesting that he is more comfortable as a foreign policy player than as a deputy with a more limited mandate. FAST Update | Armenia | No 4 | July to August 2007

Armenia experienced impressive economic results in recent years, the growth of Armenia’s GDP in January- June in 2007 was 12.2%, which is higher than in the same period in 2006. This allows the new Armenian government to demonstrate some optimism although it will have to overcome several longer term challenges, including the need for greater economic competitiveness and for more effective measures to combat corruption. Greater state spending is planned for all spheres of social security, including a 60 percent increase in pensions – the new average pension will be around USD $60. However, this may be a strategic move linked to the approaching presidential election, since only four months ago Prime Minister Sarkisian claimed that such a pension rise would be impossible. The increase, which will take effect on the eve of the 2008 presidential election, will be especially welcome by pensioners who make up a considerable part of Armenia’s electorate and usually vote in large numbers. The greater part of the 80,000 elderly in Armenia have no income but only a pension and live in extreme poverty. Their survival owed to charity diners. “Providing high pensions is quite difficult in a country with widely spread unemployment. Today there is just 0.9 workers per pensioner, when there should be at least two to provide the pension per one person,” says Anahit Gevorgian, Head of the Elderly People’s Department at the Ministry of Labor and Social Issues. The government’s new decision inspires hope in pensioners, but the alarming tendency for daily prices hikes dampers these hopes. The data of the State Commission for Protection of Economic Competition say bread products have increased in price by 7.8 percent, flour by 8.2 percent, vegetable oil by 10-12 percent and butter by 20-25 percent since the beginning of summer. Another problem is the African Swine Fever (ASF), a disease that first hit the country’s northern regions leading to the deaths of hundreds of pigs in Lori and Tavush regions, and has now spread to other areas of the country reaching in particular the outskirts of the Armenian capital. The disease crossed into Armenia from neighboring where it has killed tens of thousands of pigs in the summer. Veterinarians have established control over the situation. However, many villagers try to hide their pigs, which could aggravate the situation. Unlike the situation with bird flu, the eradication of infected or suspected pigs is much more costly considering farmers are offered no financial compensation for turning in or killing their more valuable swine. banned immediately imports of meat from Armenia on 5 September, citing the ASF outbreak. It also restricted imports of some Armenian agricultural products for the same reason. At the same time, Armenia announced it would put an embargo on poultry imports from Russia after receiving an official notification of a bird flu outbreak from Russian authorities.

Armenia has until now maintained strong political and economic ties not only with Russia but also with Iran, while being a leading per-capita recipient of U.S. government assistance. Tehran has served as one of Armenia’s few conduits to the outside world ever since the economic blockades imposed on the small landlocked country in the early 1990’s by its more hostile neighbors, and . Armenian leaders hope that joint projects with Tehran will also reduce Armenia’s strong dependence on Georgia for land routes to Russia and for its import of energy resources from Russia. There were again several high level meetings between and Tehran and several agreements on economical and cultural cooperation were signed as well. But the has expressed concern about Armenia’s deepening economic relations with Iran, with a senior American diplomat warning that they might run counter to international sanctions imposed on Tehran over its controversial nuclear program. However, at the moment it seems that ties between Azerbaijan and Iran are becoming closer. As a result of talks between the President of Azerbaijan, Ilham Aliyev and the President of Iran, Mahmoud Ahmadinejad on 21 August, Baku claimed that Iran supports the position of Azerbaijan on the Armenian-Azerbaijani Nagorno-Karabakh conflict. Furthermore, an article on the Nagorno-Karabakh conflict was included in the joint declaration of the presidents which was signed in Baku. “It is symbolic that right now the President of Iran is visiting Azerbaijan, while their vice-president is in Yerevan,” stated Richard Giragosian, a regional analyst. He added that while the Iranian President is in Baku discussing energy and transit issues, the vice-president is in Yerevan talking about sports. According to Giragosian, Azerbaijan is more important to Iran than Armenia. This is from the point of view that Iranians would benefit more from the region’s energy networks by working together with Azerbaijan. However, Armenia has not much choice in choosing its “friends” in the region.

Although the outlook for political stability remains secure, there have been some signs of increasing internal tension and an upsurge of violence, which is indirectly linked to Armenian politics. Thus the upward trend of conflictive events (see graph) will most likely continue through the pre-election period and culminate with the presidential election campaign in February 2008.

Contact FAST International is the early warning program of swisspeace, FAST International covering 25 countries/regions in Africa, Asia and Europe. Based in Country Team: Armenia Bern, , the program is funded and utilized by an Sonnenbergstrasse 17 international consortium of development agencies, including the 3000 Bern 7 Austrian Development Agency (ADA), the Canadian International Switzerland Development Agency (CIDA), the Swedish International Development [email protected] Cooperation Agency (Sida) and the Swiss Agency for Development and www.swisspeace.org Cooperation (SDC).