Page 79 - bne_Magazine_February_2019

bne February 2019
Opinion 79
Moscow in a quandary
It sometimes seems that Moscow is in a quandary, as yet not knowing what to make of the Robin Hood-like Pashinian and his band of merry men. Back in mid-August, the ‘People’s Prime Minister’ marked his first 100 days in office with a spirited speech to tens of thousands in the capital Yerevan’s Republic Square during which he made the striking claim that his administration had established the kind of “people’s direct rule” that once existed in ancient Greece.
And with Pashinian and his ministers now on the cusp of controlling both the executive and the legislative branches of power, many of his words bear repeating now. “In Armenia, there is no coalition government. In Armenia, there is no parliamentary majority. In Armenia, supreme power directly belongs to the people and the people carry out direct rule. This is the key meaning of the revolution that took place in Armenia,” he declared, adding: that Republic Square was now the “supreme body of the people’s rule”.
“This means,” added Pashinian, “that from now on this government will be accountable to this square, will obey
this square, and all key decisions must be made here at this square... In the future, the Republic of Armenia could be cited in the historical context just like ancient Greece is cited now and Yerevan could be cited like ancient Athens.”
Stirring stuff. But as this blog pointed out at the time, there’s the small matter of whether Vladimir Putin actually wants the new “ancient Greece” running its democratic experiment a short distance from his southern border. How many Russians might look on in envy? And as a landlocked country that
can't exactly afford to be choosy when it comes to developing economic relations with its four neighbours – given the three- decade-old unresolved dispute over the Nagorno-Karabakh breakaway territory, Armenia has no diplomatic relations
with either Azerbaijan or Turkey, has to tread carefully when
it comes to the third neighbour, Georgia, which the Russians watch like a hawk because of its Western leanings, and knows any expansion of business with the fourth, Iran, will be closely watched by Tehran's foe, Washington – how much free will can it really have in securing prosperity?
“Not afraid of the challenge”
Shortly after the sweeping victory of My Step – a bloc that includes ex-MP Pashinian’s Civil Contract Party – was confirmed, Pashinian was back at it. Though more restrained this time in elaborating Armenia’s new political era, he told a news conference that his power would be restricted by "rule of law and free media". "We are not afraid of the challenge of having a constitutional majority at the parliament," he added.
Getting down to economic brass tacks, Pashinian also stated that one of the first steps for the new parliament would be to make changes to the South Caucasus country's tax code. The changes should secure more freedom for local entrepreneurs and help attract foreign investment, he said.
Interestingly, Armenia’s population of less than three million is far outnumbered by the Armenian diaspora, said by some estimates to amount to more than eight million people. Since the old order was overthrown by the people power revolution, there has been anecdotal evidence and some sketchy statisti- cal evidence of a substantial increase in the number of the members of that diaspora returning to the homeland. The gov-
“From now on this government will be accountable to this square, will obey this square, and all key decisions must be made here at this square”
ernment will hope a good many of them will bring capital to invest. On a related note, in mid-August Armenia’s then deputy minister for the diaspora, a native Californian of Armenian descent, pushed a plan for diaspora bonds.
As things stood around the time of the revolution, remittances from the diaspora were, according to a Bloomberg
estimate, contributing around 14% of Armenian GDP. With unemployment calculated by the International Monetary Fund (IMF) at around 16%, many households rely on such cash to make ends meet. When Russia – Armenia’s main partner in trade and investment and a big provider of jobs to Armenians abroad – sneezes, Armenia catches a cold.
Indeed, Armenia’s economic growth prospects will in the coming year be very much at the mercy of the global economic trajectory and Russia’s progress against sanctions. Armenia's GDP growth is now expected by the European Bank for Reconstruction and Development (EBRD) to come in at 5.5%
Armenia, GDP growth
Source: IMF
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