Armenia’s Murky Politics

ARMENIA’S MURKY POLITICS

>From the Economist Intelligence Unit ViewsWire
Apr 11th 2007

Campaigning begins for a rigged election

Campaigning for Armenia’s parliamentary election, scheduled for
May 12th, began officially on April 8th. The contest will be watched
closely by foreign observers, as it could predetermine the fate of the
country’s political leadership. Victory in the legislative election
is seen as crucial to President Robert Kocharian’s apparent plan to
hand over power to his most influential associate, Serzh Sarkisian,
who became prime minister on April 4th following the death in office
of premier Andranik Markarian. Mr Kocharian, in power since 1998,
also seems keen to retain a key role in government after completing
his second and final term in office early next year.

The president and Mr Sarkisian will therefore go to great lengths
to ensure that the former Soviet republic’s parliament continues
to be dominated by their political allies. The latter are tipped to
grab the vast majority of parliament seats through a combination of
vote-rigging, vote-buying and control of the media. For this reason,
there is widespread scepticism about government assurances that
the elections will put an end to Armenia’s post-Soviet history of
electoral fraud.

By fair means or foul Twenty-eight parties and about two hundred
individual candidates have filed for registration with the Central
Election Commission to vie for 131 seats in Armenia’s National
Assembly. Ninety of those seats will be up for grabs under the system
of proportional representation, with the remaining 41 seats to be
contested in nationwide constituencies on the first-past-the-post
basis.

With credible opinion polls practically non-existent in the
country, it is not easy to gauge the electoral chances of various
contenders. Popularity alone will not guarantee success. In terms of
ability to secure the largest number of votes, the clear frontrunner
is the Republican Party of Armenia (HHK).

Nominally headed by Mr Markarian until his death, it has over the
past year come increasingly under the control of Mr Sarkisian.

The HHK is a typical post-Soviet "party of power" mainly comprising
senior government officials, civil servants, and wealthy business
people dependent on government connections. It can wield enormous
administrative resources, through control of the electoral process
coupled with voter intimidation and heavy televised propaganda. The
Armenian press has been awash with reports of local government
chiefs being instructed by party bosses to earn the HHK a particular
number of votes in their respective areas at any cost or risk
dismissal. Accordingly, they have reportedly been forcing scores of
public sector employees such as doctors and schoolteachers to join
the governing party.

The HHK’s de facto takeover by Mr Sarkisian in mid-2006 has also
meant that it now enjoys the crucial backing of most members of the
country’s business elite. The so-called "oligarchs" often hold sway in
a particular part of the country and are in a position to bully and/or
bribe voters. Many of them already helped the HHK win the previous
parliamentary elections that were judged to be undemocratic by Western
observers. There are no indications that the HHK will be seeking to
prevail by more legitimate means this time around. A strong HHK showing
is vital for the realisation of Mr Sarkisian’s presidential ambitions.

Kocharian’s choice That Mr Sarkisian, widely regarded as Armenia’s
second most powerful man, is Mr Kocharian’s preferred successor
seems a given. Both men are natives of Na gorny-Karabakh who played
a major role in the Armenian-populated disputed enclave’s 1991-1994
secessionist war with Azerbaijan. They have worked in tandem and
jointly weathered many political storms since moving to top government
positions in Yerevan in the late 1990s.

The question is just how strong Mr Kocharian would like his heir
apparent to be. The 52-year-old president made it clear last December
that he will not become "Armenia’s youngest pensioner" after leaving
office, suggesting that he wants to continue to pull the government
strings in some official capacity.

There is mounting speculation that he is eying the post of prime
minister.

Whatever Mr Kocharian’s exact intentions, it is evident that he is
trying to secure his political future by covertly sponsoring another
election favourite: the Prosperous Armenia Party (BHK) of Gagik
Tsarukian, the wealthiest of the local oligarchs.

The BHK launched its activities little more than a year ago and claims
to have since recruited as many as 370,000 members, or 12% of the
Armenian state’s population. The party is capitalising on its leader’s
vast financial resources, which are being spent on distribution of
agricultural relief, free medical aid, and other public services
to large numbers of impoverished people. The aid, condemned as a
wholesale buying of votes by opposition and even some HHK leaders,
is earning Mr Tsarukian a populist appeal that should translate into
solid voter support for his party on polling day. BHK supporters are
too disillusioned with the traditional Armenian parties to care about
a huge disparity between Mr Tsarukian’s conspicuous wealth and modest
taxes levied from his businesses.

Expert opinion differs only on whether the BHK was set up as a
counterweight to the governing HHK or as a powerful addition to the
government camp.

Despite occasional signs of friction and mutual jealousy, the two
parties are unlikely to openly clash both during and in the wake of
the May 12th vote.

Furthermore, there is a conspiracy theory that they have already
amicably divided most parliament seats between themselves and form
a coalition government.

Divided opposition The BHK phenomenon makes it easier for the
Kocharian-Sarkisian duo to prevent their political opponents from
having a strong presence in the next Armenian parliament. Their task
is further facilitated by the failure of Armenia’s leading opposition
parties to form electoral alliances. Voters hostile to the government
will have a hard time picking one of more than a dozen opposition
contenders with virtually identical platforms. Many of them might
therefore not bother to vote at all.

The three largest opposition parties are led by Mr Kocharian’s
two main challengers in the 2003 presidential election, Stepan
Demirchian and Artashes Geghamian, and former parliament speaker
Artur Baghdasarian. The latter’s pro-Western Country of Law Party
was forced out of the governing coalition in May 2006. All three
opposition leaders feel that they are popular enough to do well
on their own. Only Mr Demirchian has considered teaming up with
several smaller opposition parties, notably the Republic Party of
Aram Sarkisian (no relation to the defense minister), a former prime
minister who is the regime’s most dangerous and uncompromising foe.

Those parties failed to reach agreement even among themselves,
reportedly bickering over who should be the would-be bloc’s top
leader. Only two of them, Republic and the Heritage Party of the
US-born former Foreign Minister Raffi Hovannisian, stand a chance
of clearing the 5% threshold for entering parliament under the
proportional system. The Armenian opposition also failed to put into
practice Republic’s idea of fielding common candidates in the 41
single-mandate electoral districts. The individual constituencies
are usually swept by wealthy pro-government candidates, and this is
likely to happen once again on May 12th.

With the election likely to follow an all too familiar pattern, there
is a strong possibility of joint opposition demonstrations in Yerevan
in the immediate aftermath of the polls. Whether or not the opposition
can pull large crowds is a different matter. Its most recent attempt
to topple the government with a campaign of street protests ended in
failure in spring 2004.

Aid in the balance The US and the EU have repeatedly warned that a
repeat of serious vote irregularities would be fraught with negative
consequences for the Armenian authorities. The US, in particular, has
tied provision of US$235 million in economic assistance to Armenia,
promised under the Bush administration’s Millennium Challenge Account
(MCA), to the proper conduct of the elections. But Washington will
likely tread carefully now that Armenia and Azerbaijan seem to
have made substantial progress towards a resolution of the Karabakh
conflict, a key US foreign policy aim in the region. US and other
diplomats involved in Armenian-Azerbaijani peace talks say the
conflicting parties will try to cut a peace deal during the period
between the Armenian legislative elections and presidential ballots
due in both Armenia and Azerbaijan next year.

Assuming that it really sees a chance for Karabakh peace, Washington
will hardly undercut the Kocharian administration if the polls are
marred by serious fraud. The EU may likewise exercise caution, even
though it has warned that a clean vote is a necessary condition for
Armenia’s participation in the European Neighbourhood Policy (ENP)
framework for privileged ties with the bloc.

Yet even the prospect of being left out of ENP or not receiving the
badly needed MCA funds will hardly force Armenia’s two top leaders
to finally hold an election according to Western standards–for them,
far too much is at stake.

Armenian Foreign Minister Criticizes Turkey For Blocking UN Genocide

ARMENIAN FOREIGN MINISTER CRITICIZES TURKEY FOR BLOCKING UN GENOCIDE EXHIBITION

Arminfo
11 Apr 07

Yerevan, 10 April: Armenia will not tolerate heartless and cynical
ignoring of the suffering of the peoples of Rwanda and Darfur and the
memory of the crime against the Armenian people, Armenian Foreign
Minister Vardan Oskanyan has said in a statement on the delay in
the opening of the exhibition at the UN dedicated to the genocide
in Rwanda.

The statement also noted that it is unacceptable that a country (Turkey
– editorial), which has responsibilities before the international
community to preserve peace and is a member of the UN, has been so
impatient towards the UN.

"It is ironic and shameful that the delay affected an event that
presented an opportunity to protect human rights and prevent acts
of genocide. The mere fact of the incident proves a complete lack of
respect for history and historical memory," Oskanyan said.

Turkey blocked the opening of the UN exhibition dedicated to the
1994 Rwanda genocide because of an indirect mention of the Armenian
genocide. The Turkish mission detailed its protest, saying that
it regards as unacceptable the reference to the origin of the word
"genocide", which was first used by prominent lawyer and human rights
activist Rafael Lemkin under the impression of the crimes against
Armenians.

Armenian President, Russian Deputy Premier Discuss Ties

ARMENIAN PRESIDENT, RUSSIAN DEPUTY PREMIER DISCUSS TIES

Arminfo
11 Apr 07

Yerevan, 11 April: Armenian President Robert Kocharyan and
Russian First Deputy Prime Minister discussed the development of
Armenian-Russian cooperation in Yerevan today.

The Armenian presidential press service reported that the two men
noted that gradually increasing Russian investments in Armenia and
the growth of trade between the countries were a proof of effective
bilateral cooperation. The officials also discussed the relaunch
of enterprises that have been handed over to Russia within the
framework of the agreement "property for debt", transport problems,
the development of regional cooperation and other issues.

NAIROBI: Raila Tells Parliament Armenian Brothers Back

RAILA TELLS PARLIAMENT ARMENIAN BROTHERS BACK
Owino Opondo

The Nation, Kenya
April 11 2007

Lang’ata MP Raila Odinga today claimed in Parliament that the deported
Armenian brothers are back in the country.

Mr Odinga, who first revealed the brothers’ presence in the country,
told the House they were once again enjoying State security and
hospitality.

He said the two, Artur Margaryan and Artur Sargsyan were recently
spotted in Mombasa and at Nakuru State Lodge.

The Armenians were deported from Kenya after causing a security breach
at the Jomo Kenyatta International Airport where they attempted to
force a guest through the customs desk without clearance.

Soon after being ejected from the country, police raided their rented
residence where they recovered firearms, bullets, unregistered
vehicles, registration plates for local, GK and diplomatic corps
vehicles, security cameras, and an assortment of military uniforms.

The Langata member spoke as MPs demanded that the findings of the
Kiruki Commission be made public.

Internal Security assistant minister Peter Munya discounted Mr
Odinga’s claims: "These are wild allegations because the MP (Raila)
is always dreaming about State House and State Lodges."

He was answering a question by Ndhiwa MP Orwa Ojodeh who wanted to
know when the minister will release the Kiruki Commission Report on the
two Armenian brothers which was presented to the President last year.

Mr Munya responded that the report will not be made public because
due to security considerations.

The Government had studied the report and realized it touched on
sensitive national security issues such as the Immigration, customs,
and airports.

From: Emil Lazarian | Ararat NewsPress

Armenian Premier Discusses Cooperation With Russia’s Ivanov

ARMENIAN PREMIER DISCUSSES COOPERATION WITH RUSSIA’S IVANOV

Arminfo
11 Apr 07

Yerevan, 11 April: Cooperation in the transport sector is the most
painful issue in Armenian-Russian relations, Armenian Prime Minister
Serzh Sargsyan said in Yerevan today during his talks with Russian
First Deputy Prime Minister Sergey Ivanov.

The Armenian government’s press service said that Ivanov congratulated
Sargsyan on his appointment as Armenia’s prime minister, expressing
confidence that Armenian-Russian relations will continue to further
develop. For his part, Sargsyan pointed out that Ivanov’s current
visit will become an additional impetus for further expansion of
bilateral cooperation in various sectors.

[Passage omitted: parties further praised bilateral cooperation]

Sargsyan said that relations between Armenia and Russia develop
dynamically in political and economic spheres, but the transport
issue remains the most painful one. He expressed his satisfaction with
the operation of the ferry service between [Russian port] Kavkaz and
[Georgian port] Poti. Sargsyan also talked about the re-opening of the
Armenian companies handed over to Russia under the "equity-for-debt"
deal, saying that Armenia is ready to create necessary conditions
for settling the issue. Ivanov noted the need to find commercially
viable solutions.

The parties also discussed issues related to cooperation in sectors
like energy, nuclear energy, transport, telecommunications and
military-technical cooperation.

Sergey Ivanov: Armenia Is Russia’s Strategic Partner

SERGEY IVANOV: ARMENIA IS RUSSIA’S STRATEGIC PARTNER

Arka News Agency, Armenia
April 11 2007

YEREVAN, April 11. /ARKA/. Armenia is Russia’s strategic partner,
Russian First Deputy PM Sergey Ivanov said Wednesday answering
journalists’ question whether Armenia is Russia’s strategic partner
or stronghold.

"If you ask my personal view, I can answer since I am familiar very
well with the matter – I have often visited Armenia in last six or
seven years of my work at defense ministerial post. I think Armenia
is our strategic partner. This is gauged not only by military and
political interest", he said.

Ivanov also stressed that Russia and Armenia have been tied by common
culture for centuries.

Speaking about military cooperation, he said that Russia has a military
base in Armenia. In his words, the troops deployed in Armenia feel
themselves comfortable here and secure both Russian and Armenian
interests.

Ivanov said that the military base presence here is not directed
against other states, but "ensure our joint security, since we are
CSTO members".

He said Armenia and Russia are partners and allies and pointed out
Russian Defense Ministry’s school in Armenia as convincing evidence
of that.

In his words, he together with Armenian Prime Minister Serge Sargsyan
visited the school today.

Ivanov expressed gratitude to Armenian leadership and to Serge Sargsyan
personally for their care of the school.

He thinks the school is in very good state and Russian military and
their families feel themselves comfortable here.

Ivanov also pointed out that besides military cooperation there are
also economic and cultural ties and Russian language is a factor
making these ties closer.

The Armenian Prime Minister, in his turn, said that the statement about
"stronghold" a mere misunderstanding.

"Somebody wanted to take advantage from this and the man who said that
wanted to say something good, but said the first thing that came to
his mind", Sargsyan said.

Russia’s State Duma Speaker Boris Grizlov said during his visit to
Armenia in December 2004 that "Armenia is Russia’s stronghold in
South Caucasus".

Armenian President Decrees Appointment Of Government Members

ARMENIAN PRESIDENT DECREES APPOINTMENT OF GOVERNMENT MEMBERS

Arka News Agency, Armenia
April 11 2007

YEREVAN, April 11. /ARKA/. RA President Robert Kocharyan has signed
a decree appointing members of the RA Government, the RA presidential
press service reports.

Aghvan Vardanyan has been appointed Minister of Labor and Social
Affairs; Norair Davidyan Minister of Health; Karen Chshmarityan
Minister of Trade and Economic Development; David Harutyunyan Minister
of Justice; Vardan Oskanyan Minister of Foreign Affaires; Vardan
Aivazyan Minister of Ecology; David Lokyan Minister of Agriculture;
Armen Movsisyan Minister of Energy; Manuk Topuzyan Minister and Head
of the Government Staff; Levon Mkrtichyan Minister of Education and
Science; Hamik Poghosyan Minister of Culture and Youth Affairs; Hovik
Abramyan Minister of Territorial Administration; Andranik Manukyan
Minister of Transport and Communication; Aram Harutyunyan Minister
of Urban Development and Vardan Khachatryan Minister of Finance
and Economy.

On April 4, 2007, the RA President signed a decree appointing Serge
Sargsyan RA Prime Minister.

All the Ministers have been re-appointed to their posts.

The RA President appointed all the Ministers except for the Minister
of Defense. Chief of the RA Joint Staff, Colonel-General Mikael
Harutyunyan holds this post.

Armenia Has No Alternative To New Nuclear-Power Unit Before 2016

ARMENIA HAS NO ALTERNATIVE TO NEW NUCLEAR-POWER UNIT BEFORE 2016

Arka News Agency, Armenia
April 11 2007

YEREVAN, April 11/ ARKA/. Armenia has no alternative to the
construction of a new nuclear-power unit before 2016, RA Deputy
Minister of Energy Areg Galstyan stated at the lecture "On prospects
for developing Armenia’s energy sector".

"A long-term assessment of the uptrend in natural gas prices until
2025-2030, as well as possible rates of rise in prices for nuclear
fuel, shows that Armenia practically has no alternative to the
construction of a new nuclear power unit," hen said.

Galstyan pointed out that special attention is paid to the development
of atomic energy in Armenia.

As part of the New European Neighborhood Policy, Armenia pledged
to shot down the currently operating nuclear power unit as soon as
possible, but on condition of construction of a new power unit of
identical capacity in Armenia.

According to the Minister the creation of the capacities is aimed at
ensuring Armenia’s energy independence.

"All the measures to put the power unit out of operation must not
affect the development of Armenia’s energy sector and economy,"
he said.

The calculations based on the estimates of domestic demand and possible
enhancement of the export potential testify that in 2016 Armenia will
nee a power unit with a capacity of 1,000 megawatts, and the second
power unit is likely to be constructed after 2020, Galstyan said.

The construction of the new power unit is estimated at $2bln.

Tourism Priority Development Sphere In Armenia

TOURISM PRIORITY DEVELOPMENT SPHERE IN ARMENIA

Arka News Agency, Armenia
April 11 2007

YEREVAN, April 11. /ARKA/. Tourism sphere is a priority of development
in Armenia, Armenia’s Deputy Minister of Trade and Economic Development
Ara Petrosian said at the "Competitiveness of tourism in Armenia"
conference.

According to Petrosian, together with the private involved agencies
the government takes all required measures for the development of
the sphere.

Petrossian also pointed out the particular importance the tourism
sector has on the international level. Particularly, tourism promotes
reduction of poverty and job creation.

"The development of the tourism sphere in Armenia is on a correct
path. A lot of works have already been done, from restoring the
infrastructures to positioning Armenia on the international market,
which promotes inflow of new tourists," Deputy Minister said.

The "Competitiveness of tourism in Armenia" conference is held in
Armenian on April 11-12 by Armenia’s Ministry of Trade and Economic
Development, Armenian Development Agency and CAPS. Among participants
are heads and representatives of the involved agencies, tour operators,
public organizations and representatives of hotel and restaurant
businesses.

CBA Permits AtskahBank To Participate In Mastercard System

CBA PERMITS ARTSAKHBANK TO PARTICIPATE IN MASTERCARD SYSTEM

Arka News Agency, Armenia
April 11 2007

YEREVAN, April 10. /ARKA/. The Central Bank of Armenia (CBA) permitted
Artsakhbank CJSC to participate in the MasterCard international
payment and account system. The respective decision was made by the
CBA’s Council, CBA’s press service reported.

Artsakhbank CJSC was founded by the decree of President of
Nagorno-Karabakh Republic (NKR) on the basis of Sberbank in December
1995. CBA issued a general license to Artsakhbank on 10.31.96.

According to the official balance data as of December 31 2006, the
bank total capital made AMD 3,962.3mln, its total assets amounted to
AMD 22,881.1mln and the credit portfolio AMD 12,547.4mln. The balance
sheet profit on the capital made AMD 1,327.4mln with profit amounting
to AMD 1,012 as of the end of 2006.

According to CBA, 209,113 plastic cards were in circulation in Armenia
as of the beginning of 2007.

11,817 MasterCards issued by Armenian banks were in circulation.

The Armenian Card national payment system became a full member of
MasterCard payment system in December 2002 and gained the right to
issue and serve EuroCards/MasterCards and CirrusMaestro cards. The
founder banks received the right to become its associated members. 19
commercial banks are currently members of Armenian Card. ($1=
AMD363.78).