ARMENIA IN THE VICE: PRISONER OF HISTORY
The Economist
June 27 2012
..ARMENIA tends to feature in the news because of its problems
(history, geography, demography and economics to name but a few. But
a new report from the International Crisis Group (ICG) says not all is
doom and gloom. The parliamentary elections in May showed significant
improvement. Media coverage was more balanced, and the authorities
permitted greater freedom of assembly, expression and movement than in
previous years. Like Georgia, Armenia has a class of “30-something”
technocrats, whose western education and global outlook means they
are less rooted in the Soviet mentality than their elders. That bodes
well for the future.
The economy is still recovering from the global financial crisis,
which saw GDP contract by 14.2% in 2009. In the same period, the
construction sector contracted by more than 40%. Remittances from the
diaspora dropped by 30%. That led Forbes magazine to label Armenia
the world’s second worst performing economy in 2011-much to Yerevan’s
irritation. Although official statistics claim 8 percent unemployment,
48% of respondents told a recent survey they were looking for a job.
Over one-third of the country lives below the poverty line. Complaints
of corruption are widespread, and inflation is high.
Low rates of tax collection-19.3% of GDP, compared with a 40% average
in EU countries-limit the government’s reach. Cracking down on tax
evasion could increase government revenue by over $400 million, says
the World Bank. A few, high-profile businessmen dominate the economy.
Their monopolies and oligopolies put a significant brake on business
development. Their influence also weakens political will for the kind
of reforms that the country sorely needs.
Armenia’s democracy also has lots of room for improvement. Abuse
of administrative resources, inflated voter lists, vote-buying and
pressure on voters were just some of the irregularities that took
place in May. Moreover, the flawed 2008 presidential elections, and
subsequent crackdown on protestors (during which ten people died and
450 were injured) mean the government has lots more to do to restore
its credibility. Public trust in the country’s democratic institutions
is low, and cynicism is widespread.
The next big test will be presidential elections in February 2013.
The president, Serzh Sargosyan, has promised “the cleanest elections
in Armenia’s history”. If so, he has a lot to do. “The country needs
a better future than a stunted economy and dead-end conflicts with
its neighbours”, the ICG concludes.
That is putting it mildly. Nagorno-Karabakh, over which Armenia went
to war with Azerbaijan is a “sleeping volcano” according to a 2010
book by Tom de Waal. The main fighting stopped in 1994 but between
April 27th and June 20th this year, at least eight Armenian and seven
Azerbaijani soldiers died. That’s by far the worst death toll of any
conflict anywhere in Europe (even including Russia’s troubled North
Caucasus). If it were happening in the Balkans, say, the world would
be watching worriedly. But it isn’t.
(For a longer report on Armenia, take a look at Tim Judah’s piece in
the New York Review of Books).