CNN World
Feb 15 2013
Which way will Armenia tilt?
By Anna Borshchevskaya, Special to CNN
Editor’s note: Anna Borshchevskaya, assistant director of the Dinu
Patriciu Eurasia Center at the Atlantic Council, was an IREX grant
recipient in Armenia. The views expressed are her own.
On February 18, Armenians will cast their ballots for president.
Although eight candidates have registered, victory and a new five-year
term for incumbent Serzh Sargsyan are a foregone conclusion. Still,
this election is not meaningless.
The conduct of this poll is important, as will be Sargsyan’s choices
after the poll. If the international community gives the election a
clean bill of health, it will increase Sargsyan’s legitimacy. He will
have the opportunity to enact much needed reforms in order to move
closer to the West or, perhaps as likely, avoid tough reforms and move
Armenia – already broadly sympathetic to Russia – further into Moscow.
Upon first winning the presidency in February 2008, Sargsyan faced a
legitimacy crisis. Some have claimed that he has used his position and
connections – he was sitting prime minister and had served previously
as secretary of the national security council and defense minister –
to rig the election against Levon Ter-Petrossian, a former president.
At least ten died in the ensuing protests.
This year, Sargsyan faces little resistance, with Sargsyan’s slide
towards authoritarianism and Armenia’s lack of democratic institutions
leaving the opposition fractured and divided. His most formidable
opponents – Ter-Petrossian and wealthy businessman Gagik Tsarukyan,
chief of the Prosperous Armenia party – both declined to run.
That Sargsyan effectively gets a free pass does a disservice to
Armenia, which faces formidable obstacles to its development. When
Georgian President Mikheil Saakashvili inherited a corrupt and
inefficient state in 2004, he stamped out government corruption and
reformed Georgia into a Western-leaning economy. On January 31, 2013,
the World Bank issued a report, `Fighting Corruption in Public
Services: Chronicling Georgia’s Reforms,’ praising Georgia for
tackling corruption and noting that Georgia can serve as an example
for other countries facing similar challenges.
Armenia will find no such praise. Its government remains corrupt and
inefficient. The country was among the worst hit during the 2008-2009
economic crisis, with GDP shrinking by 14 percent in 2009, according
to the IMF. Since then, Armenian GDP has grown slowly – at an average
annual rate of approximately 3.5 percent between 2010-2012. In
contrast, Georgia grew by an average annual 6.6 percent in the same
three years. In 2010, according to official statistics, 35.8 percent
of Armenia’s population was living below the poverty line – an
increase from 27.6 percent in 2008. And, while neighboring Georgia and
Azerbaijan welcome foreign investors, organized crime keeps most
foreign investors out of Armenia. The Armenian Diaspora – who care
deeply about Armenia’s success – have long ago concluded that
investing in their homeland is a thankless task that will pay
dividends neither individually nor for Armenia.
Hundreds of thousands of Armenians now flee the country for better
prospects. Younger, more educated Armenians head to the West, while
their older, blue-collar compatriots head north to Russia. The Russian
government has welcomed these migrants, and has helped place them in
areas of Russia facing population decline. While Russia might use
these Armenians to mitigate its own demographic problem, the same
migration merely exacerbates Armenia’s.
Last April, the European Commission estimated that one-third of
Armenia’s population had emigrated since Armenia’s independence in
1991. Visiting Armenia in December 2012, one young Armenian told me
that if she or her peers had even small hope that the economy would
improve, they would stay. But few see such hope.
Meanwhile, a full sprint into Russia’s embrace may compound Armenia’s
problems. In recent years, Armenia has become Russia’s primary
foothold in the South Caucasus. Russia’s influence in Armenia is vast
not only political and economic, but also military and cultural.
Armenia depends on Russia for gas; Russia owns Armenia’s communication
and railway networks, and has extended a lease for a Military Base in
Gyumri until 2044.
The Kremlin also hopes to bring Armenia into a Russia-led Customs
Union – a precursor to the so-called Eurasian Union, which Russian
president Vladimir Putin hopes will be a counterweight to the European
Union.
With aid, however, the West has leverage.
Since 1992, the United States has provided Armenia with approximately
$2 billion in development and humanitarian assistance, the highest aid
per capita among the former Soviet states. Although the U.S. reduced
funding in 2011, when the Millennium Challenge Corporation penalized
Armenia for failing to enact political reforms, the European Union
compensated with an augmented aid package and is currently negotiating
a free trade accord.
It is now up to Armenia to choose which direction it wishes to go:
Will it join the West and a community of democracies and liberal
economies, or will Sargsyan tilt Armenia more toward a Kremlin-led
community of increasingly autocratic former Soviet states.