Armenia: Approaching the Precipice

Posted on 07/7/15
By Richard Giragosian | Via ECFR
Armenians protest against increase in electricity prices. (Photo by HyeMedia)
Armenians protest against increase in electricity prices. (Photo by HyeMedia)

For any sitting government, it is dangerous to ignore deep discontent for too long. In most cases, effectively containing discontent prevents the emergence of a more threatening form of dissent. But as recent developments in Yerevan have demonstrated, the Armenian government was dangerously disdainful of deepening discontent within the country. And amid a wave of mounting protests, now in its fifth consecutive day, the over-confident and ever-arrogant Armenian government is locked in an escalating and tense standoff with thousands of angry, yet still peaceful protesters.

 

With thousands of supporters, at times surpassing 10,000 demonstrators, the protest has centered on one key demand: a reversal of the Armenian government’s recent decision to increase electricity prices. This rise, set to spike by more than 16 percent, the third such increase in less than two years, was the trigger for this wave of protests.

 

Public outrage over the price rise itself was only further exacerbated by the fact that the Armenian parliament was compelled to impose the increase at the request of the Russian-owned monopoly controlling the country’s electricity distribution network, or the Electric Network of Armenia (ENA). For many Armenians, there was an added insult when widespread media reports revealed a pattern of flagrant financial abuse by senior managers of the purportedly debt-ridden firm, including lavish spending on luxury homes, office space and cars. And the situation was worsened when senior ENA executives refused an invitation from the parliament to defend the price rise during an important legislative debate on the issue.

 

Armenia’s sudden decision, in September 2013, to sacrifice its long-planned Association Agreement with the European Union in favor of joining the Russian-dominated Eurasian Economic Union startled many observers. This decision was seen as an abrupt and unexpected “U-turn” and was largely the result of unilateral action by President Sargsyan. And although the move was subsequently defended as necessary to reaffirm the country’s security relationship with Russia, the presidential about-face was widely perceived as an act of surrender and submission. From that perspective, the move was seen as an act of capitulation over courage, and rooted more in Armenia’s insecurity, rather than security.

 

A similar perception also plagues the government today. The electricity price rise stems from Armenian insecurity in the face of a demand from the Russian-owned energy company and, for the Armenian public, it represents yet another Russian insult and a slight to Armenian sovereignty and independence.

 

It is this broader context that has added to the significance of this new round of discontent. For example, for many ordinary Armenians, there are three essential elements of the country’s strategic partnership with Russia. The first, is the security guarantee that Russia provides Armenia, which includes discounted weaponry. Yet even for the traditionally pro-Russian Armenians, confidence in Russia’s security promises has been seriously shaken by large arms deals between Russia and Azerbaijan. Indeed, Moscow has emerged as Azerbaijan’s number one arms provider.

 

A second element of the Armenian reliance on Russia is economic, with large numbers of Armenians working in Russian cities, sending home remittances to their families. Yet in the wake of the serious downturn in the Russian economy even this practical factor has come under question. Armenian remittances from Russia are down by some 40 percent since the start of the year so the Russian market is much less attractive than it once was for much of Armenia’s seasonal migrant labor.

 

But it in the context of the electricity price protests, Russia’s failed promise on low gas prices has emerged as a key area for discontent. The latest 16 percent rise follows a slew of earlier price rises: 27 percent in July 2013 and then by another 10 percent in July 2014. Ordinary consumers have been hit hard, exacerbating the situation for the population of a country where one-third of the population lives in official poverty.

 

Against this backdrop, the country is now approaching a precipice, with an increasingly stubborn government unwilling or unable to offer any concessions set against an ever more resolute group of empowered and enthusiastic youth activists. Thus, there seems to be no clear way out of this stalemate, as each side finds it more difficult to back down from its demands.

 

Richard Giragosian is director of the Regional Studies Center (RSC) in Yerevan, Armenia and the author of ECFR’s 2014 publication on Armenia’s Strategic U-turn.

 

This article first appeared at ECFR. Click here to go to the original.

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