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Armenia: An Opportunity for Statesmanship
Armenia: An Opportunity for Statesmanship
Table of Contents
  1. Executive Summary
The Shifting Dangers of Nagorno-Karabakh
The Shifting Dangers of Nagorno-Karabakh
Report 217 / Europe & Central Asia

Armenia: An Opportunity for Statesmanship

Unless Armenia’s next presidential election is fair and gives its winner a strong political mandate, the government will lack the legitimacy needed to implement comprehensive reforms, tackle corruption and negotiate a peaceful end to the Nagorno-Karabakh conflict.

Executive Summary

After May’s parliamentary elections, Armenia is preparing for a pivotal presidential vote in 2013 that will determine whether it has shed a nearly two-decade history of fraud-tainted elections and put in place a government with the legitimacy needed to implement comprehensive reform and resolve its problems with Azerbaijan. President Serzh Sargsyan has a brief opportunity to demonstrate statesmanship before he again faces the voters in what is likely to be a competitive contest. Sargsyan has demonstrated some courage to promote change, but like his predecessors, he has thus far failed to deal effectively with serious economic and governance problems, including the debilitating, albeit low-intensity, Nagorno-Karabakh war. Another election perceived as seriously flawed would serve as a further distraction from peace talks and severe economic problems. The likely consequences would then be ever more citizens opting out of democratic politics, including by emigration.

The genuinely competitive parliamentary election had some positive signs. Media coverage during much of the campaign was more balanced, and free assembly, expression and movement were largely respected. The president’s ruling Republican Party won a solid majority of seats, but its former coalition partner, Prosperous Armenia – associated with rich businessmen and ex-president Robert Kocharyan – came in a strong second. The Armenian National Congress (ANC), led by the first post-independ­ence president, Levon Ter-Petrossian, returned to parliament after a more than ten-year absence. Nevertheless, many old problems reappeared: abuse of administrative resources; inflated voters lists; vote-buying; lack of sufficient redress for election violations; and reports of multiple voting and pressure on some voters. Reforms adopted after the violence that left ten dead and 450 injured following the 2008 election that brought Sargsyan to power were spottily implemented.

It is crucial that the February 2013 election in which Sarg­syan will seek a second term, becomes “the cleanest elections in Armenian history”, as the president had promised, not least because polls show very low trust in nearly all government bodies and institutions, including the presidency and parliament. The president initially took some bold steps, most noteworthy attempting to normalise relations with Turkey. A new class of under-40 technocrats, less influenced by Soviet ways of decision-making, has risen through the ranks and is widely seen as favouring a new style of government. But change has been slow. Political courage is needed to overhaul a deeply entrenched system in which big business and politics are intertwined in a manner that is often at least opaque. This manifests itself most vividly through the domination of much of the economy by a small group of rich businessmen with government connections.

The political crisis after the 2008 post-election violence, as well as the 2009 world economic crisis, shook Armenia. Weak political will and the resistance of vested interests muted many of the long-overdue, if timid, reforms the administration started. The economy consequently remains undiversified, unhealthily reliant on remittances. Rates of emigration and seasonal migration abroad are alarmingly high. There have been few serious efforts to combat high-level corruption. The executive branch still enjoys overwhelming, virtually unchecked powers. The judicial system is perceived as neither independent nor competent: the prosecutor dominates procedures, and mechanisms to hold authorities accountable are largely ineffective.

Media freedom is inadequate. Outright harassment of journalists and media outlets has decreased, but there is still a glaring lack of diversity in television, from which an overwhelming majority of Armenians get their information. No nationwide broadcasters are regarded as fully independent.

Russia remains Armenia’s key ally – both its main security guarantor and biggest trading and investment partner. Because of the war with Azerbaijan and frozen ties with Turkey, Yerevan has few realistic alternatives to Moscow, though it has frequently sought a “multi-vector” foreign policy and deeper ties with Euro-Atlantic partners. The EU and U.S. are trying to increase their influence, offering expertise and other aid to promote reforms, but they should do more to keep the government accountable and encourage the building of democratic institutions, especially if they want to be seen as credible, even-handed critics throughout the region with elections also due in Georgia and Azerbaijan in 2012-2013. Twenty years after the breakup of the Soviet Union, peaceful democratic transitions of power have yet to become the norm in the South Caucasus.

President Sargsyan and his government acknowledge many of the most pressing problems, but numerous reforms exist only on paper or seem deliberately designed with ineffective enforcement mechanisms. The cautious, evolutionary approach to reforms provides at best weak stability. The breakup of the Republican-Prosperous Armenia governing coalition and a more competitive parliament may now provide the stimulus the administration needs. Limping towards change, however, would neither capitalise on Armenia’s strengths nor be a good presidential campaign strategy. The country needs a better future than a stunted economy and dead-end conflicts with neighbours.

Yerevan/Tbilisi/Istanbul/Brussels, 25 June 2012

Agdam is a ghost town destroyed by fighting in and around Nagorno-Karabakh. WIKIMEDIA/João Leitão

The Shifting Dangers of Nagorno-Karabakh

As the EU’s foreign policy chief, Federica Mogherini, visits Azerbaijan and Armenia next week, Nagorno-Karabakh will be high on the agenda in Baku and Yerevan. The conflict may seem frozen from afar, but it is anything but quiet. This unfinished war on Europe’s edge looks much more threatening than even a year ago.

At least four important variables have changed which require the EU High Representative and the EU member states to pay close attention. And they are more closely linked to Europe’s preoccupations with Syria and Russia than may at first appear to be the case.

First is the new dynamic of hostility between Turkey and Russia. The stubborn and apparently irrational stand-off between Moscow and Ankara is not just suffocating mutual trade, squeezing Turkey’s tourism and keeping Western nations preoccupied about dangers of their confrontation in Syria. It is also causing new tensions in the countries situated between Russia and Turkey or with special ties to them both, in particular in the Caucasus and Central Asia.

These tensions are acute in and around Nagorno-Karabakh, a territory fought over in the 1988-1994 war between Armenia and Azerbaijan after the Armenian majority community of this former autonomous oblast of Soviet Azerbaijan sought to unite with Armenia. Armenian forces won control of almost all of the territory and seven districts of Azerbaijan around it. The Organization for Security and Cooperation in Europe’s Minsk Group, co-chaired by Russia, the U.S. and France, leads a long drawn-out conflict resolution process. It is stuck on much the same stumbling blocks today as it was when the ‘basic principles’ for resolution were formulated in 2007.

Russia-Turkey strains have long been a factor because of Baku and Yerevan’s relationship with each. Armenia is a member of both of Moscow’s regional organisations, the Collective Security Treaty Organization and the Eurasian Economic Union. Its strong security links with Russia were further upgraded in December 2015 when the two agreed on a Joint Air Defense System in the Caucasus.

Azerbaijan meanwhile has traditionally enjoyed strong links with Turkey. They see themselves as brother nations speaking Turkic languages. Baku has relied on security cooperation with Turkey, including through the 2010 Agreement on Strategic Partnership and Mutual Support. Azerbaijan’s main oil and gas export pipelines pass through Turkey and a new gas export pipeline will open alongside them soon.

But Baku has recently turned increasingly to Moscow to strengthen its military position: over the last five years, 85 per cent of Azerbaijan’s arms imports have come from Russia, according to the Stockholm International Peace Research Institute.

Azerbaijan’s loyalties are thus challenged in the Russia-Turkey stand-off. The number of Azerbaijani actors whose strategic calculations are aligning more with Russia have increased – both because of their waning conviction that the West or Turkey could prevail in a showdown with Russia, and due to personal economic interests, a factor that runs through the whole region. This has led to extra pressures, including an apparent split within the Baku administration.

Baku for its part has increasingly been on the receiving end of ever-stronger Russian overtures for closer cooperation. After Turkey shot down a Russian warplane on the Syrian border in November 2015, Russia was quick to dial up its interest in Karabakh in an informal way.

Moscow has worked bilaterally in parallel to the Minsk Group to float ideas like the Armenian restitution to Azerbaijan of some of the territories surrounding Nagorno-Karabakh in return for Azerbaijan granting an ‘interim status’ to Karabakh itself. This option is drawn from the Minsk basic principles, but could consolidate Moscow’s role in both countries, especially if Russian peacekeepers are part of the proposal. Russian Foreign Minister Lavrov has said there was no ‘Lavrov’s or any other person’s document’, but speculation about Russia’s intentions is rife.

The second new dynamic is the re-entry into the region’s politics of Iran, which borders both Armenia and Azerbaijan. In January, Iran’s Deputy Foreign Minister announced that the country was ready to mediate in the Karabakh conflict. Where this will lead remains unclear. Iran traditionally has had warm links with Armenia, but has multiple rivalries with Azerbaijan over energy and security in the Caspian Sea, Iranian proselytising among the (mostly nominally) Shia Azerbaijanis, and Azerbaijan’s influence on ethnic Azeris in Iran, at least one fifth of the Iranian population. Tehran’s involvement injects an element of unpredictability, especially from Moscow’s perspective.

The third change are the budgetary problems in both Armenia and Azerbaijan, which may prompt political leaderships to seek flag-waving adventures in Nagorno-Karabakh. Azerbaijan has been hard hit by the drop in oil prices and the devaluation of its currency. Recent protests and localized social unrest in rural Azerbaijan indicate that levels of dissatisfaction of ordinary citizens may be high. Armenia’s economy has also been hard hit by the downturn in Russia, its top trading partner and investor, and a key source country of personal remittances, which made up to 18% of the country’s GDP in 2011-2015, according to the World Bank.

The fourth and most worrying element is a rise in security incidents. The Line of Contact and the international border between Armenia and Azerbaijan have never been calm since hostilities ceased in 1994. But 2014 and 2015 have seen a dramatic increase in the intensity and frequency of incidents, including the use of heavy weapons such as mortars and artillery in and around civilian areas and the downing of a military helicopter. One soldier was reported killed in January, three in December.

The West has seen the Karabakh conflict as fairly reliably frozen for the past 22 years, despite often vicious rhetoric and periodic escalations, and despite warnings by observers of risks given the past decades’ dramatic arms acquisitions.

But risk-aversion in Baku and Yerevan is dropping at the same time as nationalist rhetoric and arms races continue to rise. The dangers of the use of force to change the military situation on the ground may seem far-fetched. But recent shifts in the region, especially the possibility of new proxy conflicts between Turkey and Russia, make such events more likely and require renewed analysis and bold thinking. As Federica Mogherini visits Baku and Yerevan, she should be aware that business as usual is rife with risk and that the EU must prepare for the possibility that the situation will get worse and not better.