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Armenian Opposition Coalition Unveils New Economic Manifesto

During the presidential campaign, Levon Ter-Petrossian accused the "bandocracy" headed by then-President Robert Kocharian and Prime Minister (now President) Serzh Sarkisian of leading Armenia to economic ruin.
The main opposition Armenian National Congress (HAK) headed by former President Levon Ter-Petrossian unveiled on February 23 a detailed plan of measures that it said are necessary for the "radical transformation" of Armenia's flawed economic system.

The 15-page program was developed by a team of economists led by former Prime Minister Hrant Bagratian, who served from 1993-96 as prime minister under Ter-Petrossian. It lists 100 policy measures that the HAK believes would end the monopolization of key sectors of the Armenian economy, improve the country's business environment, and ensure a more equitable distribution of wealth among its citizens.

The opposition bloc specifically wants to shift the main tax burden from small and medium-sized enterprises to a handful of government-linked "oligarchs" whom it accused of "strangling free enterprise" in the country. This would be done through the introduction of a progressive income tax scale as well as sharp increases in other taxes paid by the wealthiest Armenians.

Armenia would also be able to quickly double the volume of its state budget, according to the program. It says that would in turn allow for sharp increases in pensions and public sector salaries, as well as government spending on education and public services.

The program also calls for a substantial toughening of Armenia's antitrust legislation and a strict separation of business and politics. It says these measures would put an end to "the extreme concentration of the country's economic resources in the hands of a few oligarchs and their families."

The power of Armenia's government-backed oligarchs was one of the phenomena Ter-Petrossian lambasted in October 2007, in the first of a series of public speeches in Yerevan in the run-up to the February 2008 presidential ballot. On that occasion, Ter-Petrossian accused the "bandocracy" headed by then-President Robert Kocharian and Prime Minister (now President) Serzh Sarkisian of leading Armenia to economic ruin.

Ter-Petrossian accused them and their closest associates of personally taking control of the most lucrative forms of economic activity through direct ownership of business or "state racketeering." "The three main principles of the capitalist or market-based economy have been breached: creating equal opportunities, ensuring fair competition and protecting private property," he said.

"In the last five years, the criminal regime has stolen at least $3 billion to $4 billion from the people," Ter-Petrossian continued. "If that sum had been invested in Armenia, we would have had a qualitatively different country. If it had been invested in Artsakh [Nagorno-Karabakh], it would have already been independent."

Ter-Petrossian singled out as pillars of that" bandocracy" the customs system, which he said abetted the creation of economic monopolies by creating privileged conditions for businessmen with close ties to the country's leadership; and the National Bank, whose policy of shoring up the national currency he said had brought the industrial sector to the verge of collapse.

At a February 23 press conference to unveil the new economic program, senior HAK coordinator Levon Zurabian said the present regime "caters to the oligarchy" and is therefore incapable of implementing the measures required to promote robust economic growth. He said the HAK will itself take such measures if it succeeds in toppling the government.

Zurabian claimed that the HAK is preparing for early national elections in view of what he called continuing government "failures." "If the failures continue at this pace, power will simply fall on our head, and we must be ready for that," he said.

But as Armenian Revolutionary Federation (Dashnaktsutiun) parliament deputy Artsvik Minasian pointed out to the opposition paper "Haykakan zhamanak" on February 11, the HAK has no constitutional means of unseating President Sarkisian because it is not represented in parliament and cannot therefore call for his impeachment. And the likelihood that Sarkisian's Republican Party of Armenia would undertake the sort of palace coup that forced Ter-Petrossian to step down in February 1998 is so remote as to be virtually nonexistent.

-- Ruzanna Stepanian and Liz Fuller

About This Blog

This blog presents analyst Liz Fuller's personal take on events in the region, following on from her work in the "RFE/RL Caucasus Report." It also aims, to borrow a metaphor from Tom de Waal, to act as a smoke detector, focusing attention on potential conflict situations and crises throughout the region. The views are the author's own and do not represent those of RFE/RL.


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