Domestic policy

The great scandal within the ranks of the Heritage Party, as well as the “disfavored” oligarch Khachatur Sukiasyan’s resignation from Parliament, have proved to be the most important domestic political events.

Since this Wednesday the Heritage Party has been “down with a high fever”, and the process has even overshadowed the discussions of the Armenian-Turkish Protocols.

At first, when Party Chairman Raffi Hovhannisyan was reported to have resigned from Parliament, everything could be put down to his eccentric behavior, which surprises even highly experienced political figures, experts and journalists: instead of assessing his failure at the parliamentary elections in a single-mandate constituency, he introduced a bill on recognition of the Nagorno-Karabakh Republic before the Armenian Parliament; all of the sudden, he “granted” the post of Board Chairman to the inexperienced politician Anahit Bakhshyan; or, nominated Armen Martirosyan to the post of head of the Heritage parliamentary faction.

However, it has become clear this week that the real reason for this eccentric behavior may have been the strife within the party. Hohvannisyan must have come off a loser. An article in one of the opposition newspapers once more demonstrated a most unattractive feature of the Heritage Party: mass media’s strong influence on its activities. If not so, what is an explanation that a newspaper article provoked daily extraordinary sittings of the party Board and of the parliamentary faction, which made most important and scandalous decisions – ones expelling a number of outstanding members and appointing new heads of the Board and of the parliamentary faction? Without going into details of this week’s most bitter domestic political conflict, we would like to focus our attention on the main results.

The most important result is the party’s ruined reputation as a supposed promoter of a new political culture over the last few years. The myth has exploded for everybody to make sure that primitive strife is typical of the Heritage Party, which does not make it different it from other Armenian political parties. The second conclusion is that the founder of the Heritage Party Raffi Hovhanissyan has obviously lost control of the situation and is now keeping himself aloof from the press (though some newspaper articles claim that Hovhannisyan himself provoked the crisis. However, it is yet early to draw any conclusions). Moreover, he has actually left the heads of a number of the party’s local chapters and active members “to the mercy of fate”, as they objected to the Board’s scandalous decisions. Hovhannisyan’s “estrangement” will certainly have an impact on Armenia’s domestic political life: Hovhannisyan was viewed as a prospective presidential nominee from the Opposition in the 2013 presidential election and, admittedly, enjoyed the support of part of the opposition electorate, particularly the Yerevan intelligentsia. As a matter of fact, the Heritage Party’s reputation was based on Raffi Hovhannisyan’s personal authority. If he does not “re-fill” his posts and establishes control over the situation as soon as possible, the political force will certainly leave the political scene. The ruling coalition has certainly taken advantage of the situation. They “joined their voices” claiming Raffi Hovhannisyan has nothing to do in politics any more. Indeed, if a politician is unable to re-establish control over his own party, he is unlikely to get over this blow. The possibility of his founding a new party seems hardly promising either, as the situation within the Heritage Party has discredited him. By the way, the accusations brought against the opposition Armenian National Congress (ANC) by the “newly-fledged” leaders of the Heritage Party appear unfounded as well. Although an article that exacerbated the conflict within the party appeared in a popular newspaper close to the ANC, further developments showed it was only an occasion for an “offensive” launched by one of the groups in the party elite. In any case, we can state that one of the few more or less influential forces that were highly critical of the initialed Armenian-Turkish documents has been “disabled” on the threshold of the autumn session of the Armenian National Assembly. Now, far from trying to raise a wave of protest, the Heritage Party will not even raise the issue of a referendum on the initialed documents and confidence in the President, which was announced earlier.

As regards Khachatur Sukiasyan, his resignation as Parliament member fuels the rumors about a “preliminary agreement” with the authorities – “freedom for termination of political activities.” Journalists and experts feel even graver doubts now that Sukiasyan’s previously announced press conference has been postponed for an uncertain period. Mr. Sukiasyan was expected to provide answers to a number of questions of public concern. In his written statement, the ex-MP stressed that, last March, the Armenian Parliament members betrayed their colleagues by sanctioning their prosecution. So he does not want to continue working in this Parliament. In any case, in the near future, we all can see whether it is only a wish “to take a short rest” or the doubts aroused by the silent supporter of the Opposition leader will be confirmed: on September 18, the Armenian National Congress (ANC) is to hold a regular “nation-wide” rally, and Sukiasyan’s presence or absence will clarify the situation.

Meanwhile, at its sitting in Paris, the monitoring commission of the Parliamentary Assembly of the Council of Europe (PACE) failed to listen to a report on Armenia’s execution of PACE Resolution #1677 because of a packed agenda. The issue is to be discussed late this September, on the threshold of PACE’s session this autumn. Considering the release of most of the Opposition members, the European officials are expected to make a generally positive appraisal of Armenia’s authorities’ activities to honor the PACE Resolution. Also, the “Armenian issue” may be postponed until the winter session for the country to fulfill the Resolution. At the same time, we should expect the country to remain under monitoring.

As we had expected, the ad hoc parliamentary commission set up to study the tragic events on March 1, 2008, represented by the coalition-forming and allied parties, challenged the ANC’s claims that a number of oligarchs and high-ranking officials were provided with uniforms from the storehouses of the RA Ministry of Defense, which were later distributed among the members of illegal armed groups allegedly formed to attack the demonstrators. The commission member Gurgen Arsenyan stated that the Rear Services of the RA Ministry of Defense did not provide the criminal groups with uniforms. After conducting an inspection at the storehouse, the commission did not record any discrepancies alleged by the Opposition. Arsenyan pointed out that the commission members saw the registration books and do not doubt the data. Another commission member, representative of the Armenian Revolutionary Federation (ARF) shared this opinion. We would like to remind our readers that the members of the fact-finding expert group were not allowed to see the same documents. It was only after the Opposition “raised a clamor” that an inspection was conducted. Whether the registration books were “fixed” – the public is most unlikely to know about it.

Nagorno-Karabakh peace process and region

The news about the appointment of the experienced diplomat Robert Bradtke as U.S. Co-Chair of the OSCE Minsk Group proved to be the most important event related to the Nagorno-Karabakh peace process. He was appointed by U.S. Secretary of State Hillary Clinton. The Armenian, Azerbaijani and Nagorno-Karabakh foreign offices stated their willingness to actively cooperate with the newly appointed Co-Chair. Both the pro-government and Opposition camps in Armenia stated that the appointment of such an experienced diplomat is evidence of the U.S. Administration’s serious attitude to the Nagorno-Karabakh peace process. In his interview with NEWS.am, Matthew Bryza made the following comment: “Ambassador Bradtke is a wise and experienced diplomat, as well as a personal friend of mine. I have every confidence he will pursue with his characteristic professionalism and skill, and wish him every possible success.”

“It is important for all our friends in the South Caucasus that the momentum in the Nagorno-Karabakh peace process be sustained and lead to a framework for a final peace agreement as soon as possible. Ambassador Bradtke is well prepared to do so,” Bryza said.

We would remind you that Matthew Bryza will soon be appointed U.S. Ambassador to Azerbaijan.

Official Baku’s policy has lately shown a noteworthy tendency. Press Secretary of the Azerbaijani foreign office Elhan Polukhov has been the source of a number of leaks of important information “arranged” by the Turkish press. He admitted that, immediately after the first stage of the Nagorno-Karabakh peace process (the withdrawal of Armenian troops from the five regions surrounding the NKR), Azerbaijan is ready to reopen the border and unblock communication. The statement is especially noteworthy in the context of the Turkish media reports on Armenia’s possible involvement in the Nabucco project. Another “important declaration” is that the Azeri official announced the terms of forcibly displaced persons’ possible return to Nagorno-Karabakh. The relevant negotiations are to get under way only after the second stage of the peace process (the withdrawal of Armenian troops from Kelbajar and Lachin). So the talks about Azeri refugees’ “forthcoming” return to Nagorno-Karabakh proved to be too early. Moreover, Azerbaijan will have to prove to the international community it is honoring its commitments.

This week has seen the passions over the initialed Armenian-Turkish Protocols abate. The ARF representatives are most active in voicing their opinions on the matter. However, their concern does not evoke any special public response. In its turn, the opposition electorate is waiting for the ANC’s rally scheduled for September 18. The ANC is not divided over the assessment of the initialed documents made by its head office, which was mostly a favorable one. This Friday a new statement was made. The Opposition presented it as a unanimous opinion of all the political forces forming the ANC, but not that of the ANC head office, thereby confirming the disagreements within the ANC, which forced it to take a harder line. Now the Opposition supporters are waiting for Levon Ter-Petrosyan’s traditionally long speech at a rally, where the participants are to hear detailed assessments of the latest tendencies in the in the Armenian-Turkish rapprochement and Nagorno-Karabakh peace process. As regards the parties forming the ruling coalition, their representatives are reaffirming their full support for President Serzh Sargsyan’s foreign policy.

In turn, at a news conference held jointly with his Croatian counterpart in Zagreb, the Armenian leader stressed the necessity for normalizing the Armenian-Turkish relations without any preconditions. “There can be no preconditions for lifting Armenia’s blockade by Turkey and establishing normal diplomatic relations between the neighboring states,” President Sargsyan said.

Economy and social life

At the Government’s sitting this Thursday, RA Minister of Finance Tigran Davtyan announced the completion of the main work on the 2010 draft budget. He warned the Government members that it will be a tight budget – the Government will have to put up with austerities. “We must try to stabilize our economy. Some expenses will be reduced next tear as compared with this year’s budget. I would ask all our colleagues to show understanding,” the Minister said. He reported that the draft budget provides for 1.3% GDP growth and 5.5% deficit, which is to be financed from internal and external sources.

The International Monetary Fund (IMF) has revised its forecasts about the economic situation in Armenia, IMF Resident Representative Nienke Oomes reporters this week. Although the final forecasts are expected in a few weeks, the preliminary estimates for this year are as follows: a 10-15 per cent economic decline, and inflation rate of 3% and a budget deficit within 7.5%. Oomes said that lower economic decline rates are expected as compared with the 18.5% this January-July. She expects GDP growth in Armenia in the last quarter, which is to influence the annual indicators. The IMF expects a 10-15 per cent decline by the end of this year and agrees with the Armenian Government, which forecasts slight economic growth next year.

Talking to journalists, Bagrat Yenguibaryan, Director of the Enterprise Incubator Foundation (EIF), was optimistic about the IT development in Armenia. He expressed the confidence that the sector is registering progress. According to him, the global economic crisis did not affect the sector: new companies replaced the wound-up ones and are successfully developing their business. Yenguibaryan also admitted that the companies have registered lower profits this year. He pointed out the importance of government assistance in critical situations. The most important question, however, remains: how can we speak of IT development in Armenia, while Internet speed is the lowest in the region?

The RA Ministry of Transport and Communication announced its plans to renovate a 2-km-long section of the Sevan-Martuni highway. The section was inundated with waters of Sevan Lake. The Ministry’s press service reported a total of 375 million AMD will be allocated from the state budget for the work to be completed next summer.