Author Archives: Chiara Loda

Azerbaijan – Economic crisis and international attitude

Ilham Aliyev, the president of Azerbaijan, seems increasingly concerned about international criticism of his country. In Aliyve’s words: [International circles] are trying to present Azerbaijan as a totalitarian and authoritarian country where rights and freedoms are violated. This trend started the day I was elected President” [1].Despite the aggressive tone, this reveals that Azerbaijan is worried about its reputation. This is a change from before and results from the global drop in energy prices, which has severely hit the Azerbaijani economy and, more broadly, the Azerbaijani sense of self-reliance.

On August 24, Mehman Aliyev, head of the independent news agency ‘Turan’, was arrested by the Azerbaijani authorities. However, on September 11, he was released from pretrial custody. According to the analyst Liz Fuller, various developments may have influenced this outcome. One is pressure from international organizations, such as the ‘Council of Europe’ and ‘Reporters without Boarders’, as well as powerful countries. Notably, the US State department called for the immediate release of Mr. Aliyev. Concern was also voiced by the UK and France, while the Norwegian Foreign ministry Tweeted: “We are deeply concerned about the situation around the news agency and, in general, freedom of the press in Azerbaijan[2]“. This apparent responsiveness to international pressures represents a clear departure from the past. For instance, during the ‘European Games’ hosted by Baku in 2015, the Azerbaijani political establishment ignored international pledges to free political prisoners, and dismissed negative press reports as merely the expression of a global anti-Azerbaijani bias.

This departure does not result from a weakening of the ruling authorities. On the contrary, as analyzed in this blog, in 2016 a constitutional reform led to the massive empowerment of the presidency. The presidential mandate was extended from five to seven years, and the president acquired the right to dissolve the Parliament under certain circumstances, and to appoint a vice-President (who is, de facto, an unelected second-in-command). With reference to this latter point, in February 2016 President Aliyev chose his wife, Mrs Mehriban Aliyeva, as the vice president of Azerbaijan[3]. This move can be interpreted as an attempt to further consolidate the continuity in power of the whole Aliyev family. In this regard, it is worth mentioning that the current president, Ilham Aliyev, is the son of late president Heydar Aliyev, who ruled the country from 1993 to 2003[4].

A more convincing interpretation suggests that this more conciliatory attitude on human rights issues could be related to the unfortunate effects of the drop of energy prices. In the past decade, lucrative oil exports fuelled the economic growth of Azerbaijan. For years, the profitability of the energy sector provided few incentives to the systematic promotion of other industries. Thus, despite the president’s emphasis on the importance of the non-oil sector, actual investments in that direction remained modest. In November 2016, the Turan information agency complained about the lack of a coherent strategy to support small and medium-sized business[5]. However, the economic crisis required some proper moves in that direction, such as the promotion of tourism.  At the beginning of September 2017, President Aliyev attended the inauguration of the Khazar Palace hotel complex in the coastal city of Lankaran, which is located relatively near the Iranian border. The complex, equipped with all modern comforts, is openly targeting foreign tourists[6].

In addition, Azerbaijan has also relaxed its visa policy. In mid-2015 President Aliyev declared that: “Everyone who wants to come to Baku should be able to receive an e-visa and not have to go to the embassy or elsewhere”. The introduction of e-visas, effective as of summer 2017, is a minor revolution for a country that “was a stalwart on the ‘Hardest-visa-to-get’ list”[7]. The simplification was welcomed with enthusiasm by Arab visitors, especially from the Gulf, and contributed to the enhancement of the tourism sector. Their increasing presence is starting a debate about the appropriateness of building hotels that are compliant with Halal requirements, as a way of further attracting Muslim visitors. Additionally, the quick increase of affordable travel options is a crucial component of the national strategy of tourism promotion[8]. Since the summer of 2017, low-cost flights have operated between Baku and Moscow three times per week. Furthermore, since the end of October 2017, an equivalent air-link has been in place between Saint Petersburg and Baku.

In brief, whether these mechanisms are effective or not[9], the drop in energy prices is posing a remarkable challenge to Azerbaijan. Other than being a crucial economic issue, this situation affects the way Baku perceives itself and its relative weight in the international system. “There can be no talk of political independence without economic independence. (…) [Our guiding principles are] non-interference in each other’s affairs and mutual respect”. These words, pronounced by President Aliyev in his last inauguration speech  (October 2013), seemed to imply that, by virtue of its oil-related wealth, Azerbaijan deserved immunity from international criticism. Since then, things have dramatically changed. The recent receptiveness of Baku to international pressures can be interpreted as the acknowledgement, for the time being, of the inappropriateness of a daring international attitude.

Notes

[1] Turan Information Agency. 2017. ‘Azerbaijan Not to Lose Anything from Leaving Council of Europe – Ilham Aliyev’, October 5 (Retrieved through LexisNexis).

[2] Turan Information Agency. 2017.‘Foreign Ministry of Norway Concerned about Situation around Turan News Agency’, August 30 (Retrieved through LexisNexis).

[3] Notwithstanding the empowerment of the presidential figure, journalistic investigations shed light on the presidential family offshore investments.

[4] President Ilham Aliyev was elected a few weeks after the death of his father.

[5] Turan Information Agency considers that over-dependency from the oil sector is the main feature of Azerbaijan’s macro-economic structure. That makes extremely difficult to bring about radical changes in the short-run [Turan Information Agency. 2016. ‘Unjustified tariffs and rates’, November 30 (Retrieved through LexisNexis)].

[6] BBC Monitoring Trans Caucasus Unit. 2017. ‘Azerbaijan: Southern region media highlights 28 Aug – 10 Sep 17’, October 3 (Retrieved through LexisNexis).

[7] MENA English (Middle East and North Africa Financial Network). 2017. ‘Time for obtaining evisas to Azerbaijan reduced to three hours’, September 4 (Retrieved through LexisNexis).

[8] Global English (Middle East and North Africa Financial Network). 2017. ‘Land of Fire to take new steps for tourism development’, October 25 (Retrieved through LexisNexis).

[9] Turan Information Agency. 2017. ‘Economy Does Not Come Out of Crisis’, October 14 (Retrieved through LexiNexis).

Armenia – The others and Russia: Walking the complementarity tightrope

In the last months, Armenia has been remarkably active in developing and enhancing its international ties. However, Russia has not stopped keeping in check its “small brother”. Armenia’s sudden withdrawal from NATO’s Agile Spirit exercise in Georgia is illustrative of the pressures and challenges it faces. Rather than being confined to the foreign policy realm, these developments have some domestic implications.

Over the summer, Armenia was working towards the strengthening of the relationship with a plurality of actors. Such diplomatic activism can be interpreted as being in line with its main foreign policy guideline, namely complementarity. That means cultivating ties with as many international partners as possible, within the leeway consented by Russia. Concerning the relationship with the EU, Yerevan and Brussels are expected to sign the Comprehensive and Enhanced Partnership Agreement (CEPA), whose details were finalized in March. Both Piotr Switalski, the head of the EU Delegation in Yerevan, and the Armenian president, Serzh Sargsyan, are confident about a successful outcome. In the words of Mr Sargsyan: “We have no reason to not sign that document”. A similar statement was also made by Prime Minister Karen Karapetian. Other than interacting with the EU, Armenian officials had discussions with their Iranian counterparts about the implementation of a free-trade zone. Additionally, Armenian president Serzh Sargsyan and the Turkmen president Gurbanguly Berdimuhamedov pledged to reinforce their bilateral ties. These developments, and some prior diplomatic moves, have domestic implications. Thus, they can be understood as being linked to the September 2016 Government reshuffle, and to the need to promote foreign investments and sustainable developmen[1].

Focusing on the relationship with the EU, CEPA can be interpreted as the last episode of a complex interaction. In addition to being an upgrade in bilateral relations, the signature of CEPA is relevant since at the last minute, in September 2013, Armenia withdrew from the Association Agreement (AA) talks with Brussels and announced instead its decision to join the Russian-led Eurasian Union. Even though most analysts suspect this U-turn to be the result of Kremlin pressure, Armenian political elites have never publicly admitted that this was the case. For instance, in recent times President Sargsyan denied any such external interference, saying that: “We negotiated with both the EEU and the EU, since initially both sides said that one does not interfere with one another. But, what should we do when the European Union said that it hinders?”[2] In other words, it was hinted that the EU, rather than Armenia, suddenly departed from what had been previously agreed. However, in spite of this official rhetoric, the influence of Russia seems clear[3].

The withdrawal from the Association Agreement shows that Russia can be an unpredictable and capricious “big brother”. Thus, while there should be no objection to signing CEPA[4], the Kremlin still keeps a close eye on its South Caucasian ally. In this regard, notwithstanding the diplomatic activism of the past months, the last-minute withdrawal from the NATO’s Agile Spirit exercise in Georgia, which took place between September 3 and September 11 was remarkable.

Armenia is a member of the Russian-led Collective Security Treaty Organization (CSTO). However, the country has been developing ties with NATO, as per the Individual Partnership Action Plan and the Partnership for Peace program. Within this framework, some Armenian troops took part in NATO’s peacekeeping operations in Afghanistan and Kosovo[5]. Aware of the possible tensions and misunderstandings arising from this situation, Armenian cadres often specified that cooperation with NATO neither interfered with the CSTO’s commitments nor involved any future plan of membership. For instance, during an interview in July 2017, President Sargsyan ruled out any ambition to join NATO[6].However, in spite of these precautions, the withdrawal from the NATO drill seems indicative of some misunderstanding between Moscow and Yerevan.

Armenian policymakers said that their participation was never confirmed. Notably, Armenian Deputy Speaker Eduard Sharmazanov also remarked that, notwithstanding cooperation with NATO, CSTO plays a crucial role for the security of Armenia[7]. However, that does not mean cutting ties with NATO. In this regard, presidential spokesperson Vladimir Akopyan stated that missing the military exercise did not prelude a reconsideration of the relationship with NATO (i.e. cooperation without membership)[8]. It must be added that it is not the first episode of this kind. In 2009 Armenia, after confirming its involvement in a NATO exercise, also pulled out at the last moment[9].

Despite the aforementioned declarations, some doubts are in order. Georgi Kajarava, the Georgian Defense Ministry spokesman, said that this decision was highly unexpected[10]. Even more explicitly, the Armenian expert Ruben Mehrabyan bluntly said that: “A simple comparison of realities that have taken shape in the region and Armenian-Russian relations simply rule out any theories for the exception of Russia resorting to brazen blackmail and the Armenian leadership back-pedalling.” Mr Mehrabyan also ruled out that the withdrawal of Armenia could be attributed to the participation of Azerbaijan. First, Baku announced its involvement at the very last minute. Second, both Armenia and Azerbaijan participated in games organized and hosted by Russia[11].

The hypotheses about Russian pressure= are reinforced by an analysis of the Russian press. The pro-government newspaper “Pravda” used the expression “common sense prevailed” when commenting on Armenia’s sudden refusal to participate in the NATO drill. In the same article, which also hinted at the unhappiness of Russia with the cooperation between NATO and Armenia, it was plainly stated that: “We would also like to remind our Armenian friends that it was Vladimir Putin (not Angela Merkel) who stopped the offensive of Azerbaijani troops in Nagorno-Karabakh in April [2016][12]”.

While these dynamics relate to the international sphere, they are also relevant to the understanding of domestic developments, first and foremost the future of Serzh Sargsyan[13]. As reported in this blog, Mr Sargsyan declared that in the future he would like to be involved in security affairs. However, he prudently refrained from commenting on the NATO issue. Due to the constitutional reform of 2015[14], Mr Sargsyan could extend his position in power by becoming premier. Given that, his silence could be interpreted as a way to avoid tensions with a crucial partner.

In addition to this prudence in international affairs, an analysis of domestic dynamics also seems to confirm the unwillingness of Mr Sargsyan to quietly retire. While he refrains from declarations about his future, Galust Sahakian, a deputy chairman of President Sargsyan’s Republican Party of Armenia (HHK), declared that the President should stay in power after the end of his second presidential mandate (i.e. should become Prime Minister), since no other leader could take up such a responsibility.

In conclusion, Armenia needs to find a balance between its desire for investments and modernization, and its need for not displeasing Russia. Turning to the current leadership, prudent decisions seem connected to their permanence in power.

Notes

[1] Refer to Erik Davtyan’s analysis for more insight on Armenia recent diplomatic moves and their implications.

[2] ARMINFO News Agency. 2017. “Kiesler: European Union is ready to sign agreement on extended and comprehensive partnership with Armenia”, September 12 (Retrieved through LexisNexis).

[3] This author conducted expert interviews in Armenia in Summer 2015 and Summer 2015. All her respondents agreed on Russia having strongly influenced that decision. For further insights, refer to: Loda, C. (2016, May). Perception of the EU in Armenia: A View from the Government and Society. In Caucasus, the EU and Russia-Triangular Cooperation?. Nomos Nomos. Pp 131-152.

[4] BMI Research. 2017. “New EU Deal No Game Changer”, Armenia Country Risk Report, October 1 (Retrieved through LexisNexis).

[5] Thai News Service. 2017. “Armenia: Armenian presidential spokesman comments on relations with NATO”, September 8 (Retrieved through LexisNexis).

[6] Thai News Service. 2017. “Armenia: Armenian presidential spokesman comments on relations with NATO”, September 8 (Retrieved through LexisNexis).

[7] BBC Monitoring Trans Caucasus Unit. 2017. “Programme summary of Armenian Public TV news 1700 gmt 4 Sep 17”, September 5 (Retrieved through LexisNexis).

[8] ITAR-TASS. 2017. “Armenian presidential spokesman says no plans to review relations with NATO”, September 07 (Retrieved through LexisNexis).

[9] ARMINFO News Agency. 2017. “Dashnaktsakan: Armenia is an independent state, and can independently decide in which exercises to take part, and in which there is no”, September 04 (Retrieved through LexisNexis).

[10] ARMINFO News Agency. 2017. “Armenia to participate in the training “Combat Commonwealth 2017” within the framework of the CIS against the backdrop of refusal to participate in NATO exercises”, September 4 (Retrieved through LexisNexis).

[11] BBC Monitoring Trans Caucasus Unit. 2017. “Pundit: Armenia misses US-led drills due to Russia’s “brazen blackmail””, September 6 (Retrieved through LexisNexis).

[12] Stepushova, Lyubov. 2017. “Russia tells Armenia where to sit”, Pravda.Ru, September 7, http://www.pravdareport.com/world/ussr/07-09-2017/138617-armenia-0/.

[13] BMI Research. 2017. “New EU Deal No Game Changer”, Armenia Country Risk Report, October 1 (Retrieved through LexisNexis).

[14] In 2015, a constitutional referendum reduced the powers of the President and enhanced those of the Prime Minister. Considering the political implications of this change, it has been observed that it would enable President Sargsyan, who is serving his second and last presidential mandate, to extend his permanence in power by becoming Premier. This blog extensively covered this topic, focusing on the details of the reform, the campaign before the vote and the relevant debate in 2016 and 2017.

Armenia – Shortcomings in the parliamentary elections and the long shadow of the future

On 2 April 2017, a parliamentary election took place in Armenia. This was a particularly remarkable event in the political life of the country, as it was the first national vote after the approval of the constitutional reform, in December 2015 and the subsequent adoption of a new electoral code. The victory of the Republican Party, which has been in power since 1999, makes it possible for the incumbent, President Serzh Sargsyan, to think of taking on a prominent political role after the end of his second (and last) presidential mandate in 2018. In spite of the emphasis by the ruling political cadres, the president included[1], on the proper management of the electoral process, domestic and international observers have lamented malpractices both during the electoral campaign and the election itself. In spite of these concerns, most international observers have refrained from condemning the overall result.  This post will offer a detailed account of these issues.

RESULTS

On Monday 10 April, the results were published by the Central Committee Election (CEC).

Of the 105 seats in Parliament, 58 were won by the Republican Party, 31 by the Tsaroukyan bloc (led by the businessman Tagik Tsaroukyan), 9 by the Yeld bloc, and 7 by the Dashnaktsutyun Party (ARF) [2]. As prescribed by the new electoral code, four representatives of ethnic minorities were elected under a special quota. Three of them were allied with the Republican party (Assyrian, Kurdish and Yazidi) while the other one, a representative of the Russian community, run with the Tsaroukyan bloc.

The formations which did not meet the 5% threshold, and therefore were not assigned any seat, were: the ANC–PPA Alliance, the Ohanyan-Raffi-Oskanian Alliance, Armenian Renaissance, the Free Democrats Party and the Armenian Communist Party.

While the results could be interpreted as a narrow victory for the Republican party and will mean that the party will probably resort to a coalition, it is undoubtedly a more favourable result than what was predicted by surveys immediately before the election[3].  Notably, the opinion polls released at the end of March by the KOG Institute and the Demokratijos projektai foresaw the “Tsarukyan bloc” as the clear-cut winner, with 40,4% of the vote, and the ruling Republican Party collapsing to 19.4%. Meanwhile, the poll organised by the Russian Public Opinion Research Center (VCIOM) predicted the Tsarkukian’s bloc would gain 41% of preferences, and the Republican Party 39%.

THE CAMPAIGN

This plurality of candidates had an impact on the electoral campaign, which was characterised by an unusual level of activism by candidates. Most of them were campaigned on a similar political platform, based on day-to-day economic issues, such as unemployment, low salaries and rampant emigration rather than macro issues such as any geopolitical confrontation. Citizens reported an unusually high number of visits from party representatives and pamphlets sent to their address. In spite of this genuine electoral competition, some misconduct has been reported. Notably, at the end of March, the Union of Informed Citizens (UIC), an Armenian civic organisation, declared that school principals across the country were urging their staff and their students’ families to cast their vote for the Republican Party. While the ruling party did not deny this allegation tout court, the actions were dismissed as the spontaneous campaign of private citizens in a manner that was perfectly consistent with the provisions of the electoral code. This last point was contradicted by the UIC’s findings, which outlined 136 cases of school directors being given instructions by representatives of the Republican Party[4]. Due to these episodes, the opposition ORO and YELK blocs appealed to the CEC, asking for the disqualification of the Republican Party. Both appeals were rejected.

In addition, some disinformation campaigns seemed having been attempted.

In March, some Russian Twitter accounts posted the above e-mail supposedly leaked from USAID to demonstrate that external forces were actively manipulating the election results. USAID immediately dismissed the e-mail as a fraud, claiming that the staff would not have sent anything like that (in broken English) from a Gmail account.

External actors were concerned about the conduct of the campaign. On 16 March  Piotr Switalski, the head of the EU delegation in Armenia, invited Armenian voters not to get involved in electoral fraud, either by participating actively or by looking the other way. During his speech, he openly mentioned vote-buying, saying: “Don’t be exposed to the temptation of selling your vote. You may be approached by people who will be offering you money, services, promises in exchange for your vote. There is no money in the world that can be worth selling your vote”. This was not an isolated comment, as, in the following weeks, the United States and the EU Mission in Armenia put out a joint statement noting their concern about: “allegations of voter intimidation, attempts to buy votes, and the systemic use of administrative resources to aid certain competing parties.” In other words, in spite of the electronic system of voter identification provided by international donors (already mentioned in this blog), foreign diplomats based in Yerevan voiced their concern about a fraudulent electoral environment.

ASSESSING THE VOTE

Most assessments of the Election Day, except by the CIS monitoring mission[5], mentioned some types of irregularities. However, external observers refrained from labelling the overall process as not free and fair. The International Election Observation Mission (EOM) reported that: “The 2 April parliamentary elections were well administered and fundamental freedoms were generally respected. [However], the elections were tainted by credible information about vote-buying, and pressure on civil servants and employees of private companies”. In other words, while the overall process was not dismissed as fraudulent, the broader electoral climate was described as plagued by illegal practices and petty corruption. A similarly cautious statement was made by an EEAS spokesperson who, while fully endorsing all the shortcomings pointed out by the EOM, commented that: “The election result nevertheless reflects the overall will of the Armenian people”. It also added: “We look forward to working with the democratically elected new Parliament and Government”. This statement was not complemented by any declaration of the EU delegation in Armenia, as ambassador Switalski declined to comment on the electoral result.

Domestic criticism, from both civic and political activists, was much more critical. The Citizen Observer Initiative denounced widespread violations in the conduct of the elections, outlining episodes such as controlled voting, the manipulation of voter lists, pressure and bribes, inefficient commission work, insufficient vigilance at polling stations, and the failure of the technical devices[6]. The unelected ANC-PPA not only complained about fraud, but formally appealed to the CEC for the invalidation of the electoral result. Even though this claim was rejected[7], the parliamentary election results were annulled in a central village in the Aragatsotn province due to widespread fraud. Remarkably, the handing out of vote bribes was admitted even by Eduard Sharmazanov, the spokesperson of the Republic Party, who, however, added that isolated episodes did not affect the overall result. In spite of the shortcomings mentioned above, plus others that had not been included in this post (for reasons of space), people did not take to the streets to demonstrate against the dubious result. That is surprising, considering that, in the past years, elections have almost always triggered widespread demonstrations. Notably, both in 2008 and in 2013, several thousand activists protested against the allegedly rigged presidential election[8].

WHAT ABOUT THE PRESIDENT?

In spite of all the controversies, both during the campaign and the vote, the Republican Party has emerged as the winner of this election. While the current Prime Minister, Karapetyan, will keep his job until May 2018, the scenario after the end of the presidential mandate of Serzh Sargsyan is still to be defined. As reported previously in this blog, the recent constitutional reform will reduce the prerogatives of the president, making this office mainly ceremonial, and increase those of the prime minister. This power-sharing innovation, introduced shortly before the end of the second presidential mandate of Serzh Sargsyan, has been widely interpreted as an attempt by Sargysan to avoid relinquishing power. For his part, Mr Sargsyan has been extremely laconic in declarations about his future plans. For example, a few days after the elections, he declared in an interview: “I have never planned where I will be in the next stage of my life. I always found myself in places where I was of greater help to our security.” Turning to Prime Minister Karapetyan, he is by far one of the most popular figures in the party. Even though he was not a candidate for parliament, since he did not meet the residency requirement, his image dominated the campaign of the Republican Party. However, he does not seem to have a solid support network in Yerevan that would enable him to determine his own political future. In conclusion, while no open declaration about the future of Mr Sargsyan has been made, this electoral success may give him the option of avoiding an early political retirement.

This research was supported by a FP7/Marie Curie ITN action. Grant agreement N°: 316825

Notes

[1] ARMINFO News Agency. 2017. “Serzh Sargsyan: Big work has been done on conducting elections in accordance to international criteria”, April 3 (Retrieved through LexisNexis).

[2] ARMINFO News Agency. 2017. “Armenian CEC presented the final results of Parliamentary elections”, April 10 (Retrieved through LexisNexis).

[3] Some speculations are made on the relationship between the Republican party and the Tsarukyan bloc. For example, it has been hypothesised that President Sargsyan covertly supported it, since it subtracted support from other opposition forces. Similarly, before the elections, the analyst Emil Danielyan conjectured about Tsarukyan and Sargsyan having a “tacit understanding” for the future, which could lead either to a formal coalition or a role for the ‘Tsarukyan bloc’ as “constructive opposition”. As of this writing (11/04/2017), a coalition between the two has not been announced.

[4] Some school principals involved have sued the Civic Initiative which brought the scandal up to public attention.

[5] Armenpress News Agency (English). 2017. ‘CIS observer mission assesses Armenia’s parliamentary election as “open and transparent”’, 3 April (Retrieved through LexisNexis).

[6] BBC Monitoring Trans Caucasus Unit. 2017. “Armenia: Observers say polls tainted by vote-buying, pressure”, April 3 (Retrieved through LexisNexis).

[7] Arminfo News Agency. 2017. “Sharmazanov to Ter-Petrosyan: Parliamentary elections are the best indicator of Armenia’s democratic development”, April 10 (Retrieved through LexisNexis).

[8] Loda, Chiara. “Perception of the EU in Armenia: A View from the Government and Society.” In Caucasus, the EU and Russia-Triangular Cooperation?, pp. 131-152. Nomos Verlagsgesellschaft mbH & Co. KG, 2016, 146.

Armenia – Is International Goodwill a Form of Soft Power? Some Insights from the South Caucasus

In September 2016, referring to the parliamentary elections due to be held in the spring of 2017, President Serzh Sargsyan of Armenia declared that: “I am sure that all these measures will contribute to raising public confidence in electoral process and ensure that we meet international standards for free and fair elections. Parliamentary elections will be held in our country in several months. The Republic of Armenia will send invitations to all partners for their participation in international monitoring missions[1]”. Even though political leaders do not always implement this kind of declaration, the recent Armenian record gives some backing to the credibility of the statement.

Armenia is not a consolidated democracy, as clearly stated by “Freedom House-Nations in Transit” 2016 report. In 2016 (like in the previous years) Armenia is classed as a semi-consolidated authoritarian regime. In particular, with reference to electoral processes, it is considered that the level of local self-governance remains insufficient. Looking at the executive level, some observers and members of the opposition have criticised the recent constitutional reform[2]. According to them, rather than being aimed at the greater good of the country, the reform represents a tool to extend President Sargsyan position in power. Additionally, corruption remains pervasive. In spite of these and other shortcomings, in recent times Armenia has often searched for international advice and approval before implementing major reforms. Relevant examples of that are the forthcoming parliamentary elections, as hinted at the beginning of the post, and the recent constitutional reform (approved by referendum on December 2015).

International observers have been formally invited to monitor the forthcoming parliamentary election, scheduled for April 2, 2017. More precisely, on January 19, Arsen Babayan, Head of the Information Department of the Armenian National Assembly, declared that four international organisations have been invited: the Council of Europe, PACE, OSCE, and CIS Inter-Parliamentary Assembly[3]. Such a move was widely expected. Remarkably, in anticipation of a formal invitation from the Armenian authorities, in the past months, the OSCE/ODIHR conducted a “Need Assessment Mission report”, which involved consultations with both institutional and civic actors. As a result, the deployment of 24 long-term observers and 250 short-term observers has been recommended. Additionally, the Armenian government has been cooperating with international donors towards the enhancement of electoral capabilities and transparency. For example, after some talks, the Government and the EU delegation in Armenia agreed on the funding and purchasing of cameras to be placed in the polling stations. Additionally, a program for the timely acquisition of voter identification technologies has been coordinated by UNDP and funded by the EU, the USA, Germany, and Great Britain[4].

This search for the cooperation and, more indirectly, the approval of the international community (especially EU and the US) is not new. As already dealt with in this blog, in July 2015, before submitting the text of the new constitution to the voters, the Armenian authorities asked the Venice Commission (the advisory body of the Council of Europe specialised in constitutional law matters) for an advisory legal opinion. Following the opinion, the draft of the constitutional reform was amended accordingly. This cooperative attitude is diametrically opposed to the hyper-assertive behaviour of neighbouring (and arch-enemy) Azerbaijan. Notably, in November 2016, the Azerbaijani Constitution was modified by referendum. On that occasion, the government in Baku, despite of severe criticism from the opposition, refrained from asking for any external advisory opinion on the draft. Notwithstanding the lack of a formal invitation, but in response to a request from several human rights defenders, the Venice Commission issued an urgent preliminary opinion on the draft (which was not formally discussed by the Azerbaijani authorities), highlighting concerns on matters like civil liberties and over-empowerment of the presidency.

Armenia has nothing specific to gain from being a “good international citizen”. In spite of its membership in the Russian-sponsored Collective Security Treaty Organizations (CSTO) and the Eurasian Union (EEU), Armenia seems to be on remarkably good terms with the EU. Notably, even though no specific dates have been announced yet, Yerevan and Brussels are concluding the negotiation of an agreement to deepen economic and political ties. This is happening roughly three years after a Armenian u-turn. More precisely, in September 2013, after the sudden withdrawal of Yerevan from Association Agreement (AA) talks with the EU, it was made clear that Armenia was not eligible for any alternative form of association. This did not prevent Armenian officials, including the President, from making frequent comments about the desire for cooperation with Brussels[5]. The ongoing search for another form of association seems to have helped the Armenian cause, as shown by the current ongoing negotiations.

In short, Armenia is making successful use of its soft power (i.e. persuading others to do something without resorting to coercion). Notably Yerevan, in spite of its binding ties with Russia, has convinced the EU of the importance of not abandoning its “willing child”. Even though it would be superficial and dismissive to ascribe this outcome solely to Armenia’s “good international attitude”, it is safe to say that it has played some role.

If this hypothesis is correct, it can allow us to make sense of soft-power strategies implemented by extra-European states[6]. In particular, it can help us to understand why mega-events, such as sporting competitions, have limited power in seducing an external (Western) audience. As Nye points out, “The best propaganda is not propaganda”. This refers to the mediocre outcomes of Russian and Chinese soft-power strategies, which project a government-crafted message that, ultimately, is not credible[7]. A similar point can be made about neighbouring Azerbaijan, which for years has implemented an (expensive) state-sponsored public diplomacy strategy, involving both grand events and a carefully planned official narrative. In spite of the effort, during the “European Games” of 2015 the international spotlight was on political prisoners rather than on the brand-new stadiums[8].  At things stand, Baku seems to have acknowledged the limited effectivity of the strategy.

In summary, Armenia, notwithstanding its binding ties with Russia, has been successful in portraying itself as an eager partner of the EU. In addition, both before the recent constitutional reform and the forthcoming parliamentary election, external advice and approval have been proactively sought. This is in sharp contrast to the Azerbaijani strategy, which until recently was more focused on grand events rather than on initiatives and reforms that were geared towards external observers[9].  Going beyond these cases, these observations may be relevant to the broader understanding of soft-power tools. While the limits of building stadiums seems have been realised now, more attention should be paid to “international goodwill”.

This research was supported by a FP7/Marie Curie ITN action. Grant agreement N°: 316825

Notes

[1] ARMINFO News Agency. 2016. “Armenia’s President: Armenia’s new government’s task is to give new impetus to development of economy”, September 17 (retrieved through LexisNexis).

[2] This blog has analysed the Armenian constitutional reform, including the public debate around it, in the following dates: November 30, 2016; December 9, 2015; September 13, 2015.

[3] ARMINFO News Agency. 2017. “Arsen Babayan: 4 international organizations invited to observe parliamentary elections in Armenia”, January 19.

[4] ARMINFO News Agency. 2017. “Negotiations continue on installing video cameras in polling stations in Armenia, Switalski says”, January 24.

[5] Loda, C., 2016, May. Perception of the EU in Armenia: A View from the Government and Society. In Caucasus, the EU and Russia-Triangular Cooperation? (pp. 131-152). Nomos Verlagsgesellschaft mbH & Co. KG.

[6] Providing a detailed account of the Armenian geopolitical membership may be daunting. Even though the country is geographically much closer to Teheran than to Brussels, the Armenian political narrative has consistently emphasised the belonging of the country to the European-Christian civilisation.

[7] Nye, J.S. 2013. “What China and Russia Don’t Get About Soft Power”, National Herald Tribune, May 2 (Retrieved through LexisNexis).

[8] Loda, C. 2016. “Azerbaijan, Foreign Policy and Public Diplomacy”. Irish Studies in International Affairs, 1-17. Retrieved from http://www.jstor.org/stable/10.3318/isia.2016.27.7.

[9] Also in the case of Azerbaijan, the targeted audience is the western one. For a more detailed analysis, see: Loda, Azerbaijan, Foreign Policy and Public Diplomacy.

Armenia – One year after the Constitutional Reform: Future perspectives for the President and his party

In 2015, after a referendum, Armenia voted to switch from a semi-presidential political system to a parliamentarian one. As a consequence of that, most governing prerogatives are due to shift from the president to the prime minister. This change has been accompanied by discussions about the implications of the change. Notably, both before and after the vote, the public debate has focused on the consequences on the tenure in power of President Serzh Sargsyan, who has been ambiguous as to whether he will run for Prime Minister after the end of his second and last presidential mandate. Almost one year after the constitutional amendment, the debate has not ceased.

The debate about the constitutional reform has centred on the personal gains of politicians (especially the serving President) rather than on the institutional implication. This is nothing new in either an Armenian or the South Caucasian context. More than a decade ago, in the months preceding the Armenian Constitutional Reform in 2005, the public debate in Yerevan focused on how the new legislative provisions would give substantial immunity to the president[1]. Similarly, in 2010, when neighbouring Georgia approved a similar reform to the 2015 Armenian constitutional change, critics observed that it would secure then then President Mikheil Saakashvili’s position in power. In the end, the electoral defeat of Mr Saakashvili’s party (UNM) in the 2012 parliamentary election was followed by a smooth transfer of power, often saluted by external observers as a crucial moment in the Georgian path towards democratisation.

Back in Armenia, the debate has been recently revitalised after the public declarations of the President. At the end of October 2016, when asked by Al Jazeera about his intention to run for Prime Minister in 2017, President Sargsyan answered evasively: “You know, I find it too early for these conversations.” While, for roughly one month, Mr Sargsyan refrained from further comments, in the following days and weeks different comments came from the ruling majority, the opposition and the press. Tatevik Shahunyan, who is Vice Speaker of the Armenian Parliament and Spokesman for the ruling “Republican Party” (RP), declared that it was premature to talk about the political future of the President before knowing the results of the Parliamentary elections in 2017; this statement neither confirmed nor denied the scenario of Mr Sargsyan becoming Prime Minister at the end of his presidential mandate[2].

As expected, the opposition commented on these developments in a much more decisive way. Levon Zurabian, a parliamentary leader of Armenian National Congress (HAK), interpreted President Sarksyan’s statement as an admission of political ambitions beyond his presidential mandate. This opinion was promptly reiterated by Mr Zaruhi Postanjian, the leader of Heritage party. The press enriched the debate by pointing out the potential intra-party implications of this “tandem”. The pro-opposition paper Zhamanak reported that an exceptional electoral result by the ruling Republican Party might be interpreted as stemming from the work of the current Prime Minister Karen Karapetyan. In that case, his resignation in favour of Serzh Sargsyan would seem illogical. President Sargsyan might benefit more from a “moderately good” result which, without jeopardising the ruling majority, would not be interpreted as the personal success of Mr Karapetyan[3].

After roughly a month of silence, President Sargsyan finally spoke both about the Prime Ministership and party unity, denying any conflict between his personal ambitions and the future of his faction. On November 26, in occasion of a speech given at the “16th Convention of the Republican Party of Armenia[4]”, he ruled out the immediate substitution of the Prime Minister, saying that:  “[I]n case we receive the vote of trust in the coming elections, our government will again be headed by Prime Minister Karen Karapetian who will continue to implement the current programs.”. In spite of this declaration, which in any case did not clarify President Sargsyan’s intention after the end of his presidential mandate in 2018, some members of the opposition maintained their comments. For example, Levon Zurabyan (HAK) declared: “Karen Karapetyan is being used by the PR to secure their success in the parliamentary election. That will later pave Serzh Sargsyan’s way to the prime minister’s office”.

In relation to intra-party dynamics, President Sargsyan’s speech placed the emphasis on the need for the Republican Party to unite[5] and promote the modernization of the country. Notably, significant space was devoted to the economic results obtained in the last eight years in the face of the global financial crisis. He pointed out the need for Armenia to undergo a broad process of reforms, both in relation to the economic development of the country and in the face of external challenges. In the words of President Sargsyan: “We need to reduce and eliminate the negative [spill-over of the hostile external environment]. Any successful reform will bring also new success in other areas”. This insistence on change seems to refer not only to future targets but also to measures adopted in the recent months. Notably, a reduction in the gas price, effective as of July 2017, was approved in October. In the same month, an anticorruption bill was voted.

The lengthy speech by President Sargsyan at the annual party convention suggests that the forthcoming parliamentary campaign will be mostly centred on economic themes rather than on strong personalities. That is in line with one of the declared goals of the constitutional reform, namely the replacement of a people-based political culture with the consolidation of ideological platforms. Pertinently, the President’s rhetoric reveals the attempt to minimise intra-party divisions and shift the attention to a programmatic platform. In this perspective, the opposition, which is hardly unified, has already expressed its interest in joining forces to prevent a landslide victory of the Republican Party. The next months will be crucial in understanding whether the soon-to-be introduced parliamentary system can indeed foster democratisation as claimed by its proponents, rather than being the vehicle for personal political ambitions.

This research was supported by a FP7/Marie Curie ITN action. Grant agreement N°: 316825

Notes

[1] Arminfo News Agency. 2005. “Those Who State that the Bill of Constitutional Reform will lead to Impunity of the President are Unaware of the Bill”, November 26 (Retrieved through LexisNexis).

[2] ARMINFO News Agency. 2016. “Sharmazanov in the footsteps of Serzh Sargsyan’s interview to Al Jazeera: It is tactless to speak of President’s plans after 2017 elections until election results are known”, November 4 (Retrieved through LexisNexis).

[3] BBC Monitoring Trans Caucasus Unit. 2016. “Armenian press discuss president’s interview with Al-Jazeera”, October 29 (Retrieved through LexisNexis).

[4] In occasion of the 16th Convention of the Republican Party of Armenia, Prime Minister Karapetyan has formally joined the Republican party.

[5] In spite of this pledge for unity, analysts suspect that the inclusion of Mr Karapetyan in the Republican Party has not been received with unanimous enthusiasm [ARMINFO News Agency. 2016. “Expert: with Karapetyan’s assignment the old guard turned the most vulnerable point of Republicans”, November 28 (Retrieved through LexisNexis)].

 

Azerbaijan – A New Constitutional Reform: Towards a Monarchical Presidency?

On 26 September, citizens of Azerbaijan were called to vote in a constitutional referendum. The constitution, approved in 1995, was already amended in 2002 and 2009. While the current amendments concern numerous topics (including civic liberties and right of assembly), some of them specifically concern the President’s role. It is proposed:

  • To amend Article 101.1 of the current constitution, which would extend the presidential term from 5 to 7 years.
  • To introduce a “First Vice President” and a “Vice President”, chosen and appointed by the president. In the case of the president’s inability to perform his role, the First Vice President would take over. Currently, this “second-in-charge” function is a prerogative of the prime minister
  • To remove the minimum age limit to run for President (currently, it is 35). Similarly, the minimum age for parliamentarian is lowered from 25 to 18.
  • To introduce the right for the President to dissolve the parliament. This is in the event that the parliament votes no confidence to the government twice in a year or refuses the suggested appointees to the Constitutional Court, the Supreme Court or the Central Bank’s main board.

In order to maximise the inclusivity of the voting process, polling stations have been established in Azerbaijani embassies. Remarkably, everything is ready in Ankara, Teheran and Riyadh.  However, notwithstanding the vocal support of the ruling party, the opposition has expressed its grave concern over the proposed changes.

While President Ilham Aliyev has not personally commented on the proposed amendments, pro-government voices have openly endorsed them. MP Siyavus Novruzov, who is the deputy executive secretary of the ruling ‘New Azerbaijan Party’, has defined the proposed amendments as necessary to enhance national security and reform of the state administration[1]. Emil Huseynli, head of the ‘Support for Youth Development – Dushunje’, declared that the various changes, including the strengthening of the presidential office, will foster the sustainable development of the country. Referring to the relaxation of the age limits, he commented that: this “will create an opportunity for the political activity of literate, prospective young people.” However, the opposition thinks that this amendment is specifically designed to favour a semi-monarchical transfer of power and, henceforth, that the children of the president would likely be the main beneficiaries of this “political opportunity”. Notably, it has been observed that Heydar Aliyev, the only son[2] of the presidential couple, will be 27 in 2025 (the most likely year for a presidential election). If his father decides to run for the presidential office in 2018 and to step down after that, the young Heydar would be an extremely probable “new” candidate. Other possible scenarios are the election of Heydar to parliament or the appointment of a member of the presidential family as vice-president[3]

In addition to being concerned about the future implication of these changes for the Aliyev family, the opposition is worried about the immediate effects of a “reinforced presidency”. Arif Hajili, the leader of Musavat party, bluntly declared that: “They [the state authorities] are not even able to explain to their citizens why we need these changes to the Constitution. They believe they can create a second North Korea here and rule in the same style[4]. Similarly, the prominent lawyer, Fuad Agayev, commented that: “An analysis of the document indicates that, if adopted, it will have an adverse impact on human rights, civil rights and freedoms, as well as power-sharing”.  This kind of apprehension is also shared by some international observers. Chris Smith, Chairman of the U.S. Helsinki Commission, sent a concerned letter to Ilham Aliyev. At one point, it stated clearly that: “By lengthening presidential terms and expanding presidential authorities, the proposed constitutional changes are susceptible to abuse that would entrench political authority, making it less responsive to the will of the Azerbaijani people.” Lastly, some observers expect the referendum to be rigged.

In September various well attended protest rallies took place in Baku. The main argument is that the only aim of the referendum is to reinforce Aliev’s rule. “No to monarchy!” and “No robbery!” were the main slogans chanted[5]. Additionally, in the attempt to generate an international response, some Human Right Defenders asked to Thorbjørn Jagland, the Secretary General of the Council of Europe, to submit the proposed amendments to the Venice Commission[6]. The main points of concern they raised were: the massive empowerment of the presidential office, the authoritarian climate the referendum takes place in, the non-consultation of the parliament, and the absence of public debate[7]. In addition to the Azerbaijani Human Right Defenders, on 5 September the PACE Bureau also asked the Venice Commission to give an urgent opinion.

In response, on 20 September the Venice Commission issued a “Preliminary Opinion on the Draft Modifications to the Constitution”. In the context of widespread concern on different matters, including the repression of dissident opinions, the Venice Commission expressed clear worries about the amendments in relation to the presidency. More specifically, it noted that, back in 2009, the removal of the two-term limit to re-election had already strengthened the power of the president. In the light of that, it said that: “the modification to Article 101 which extends the Presidential mandate for longer than is the European practice, coupled with the previous removal of the two-term limit, concentrates power in the hands of a single person in a manner not compatible with the separation of powers”. In addition, the Venice Commission expressed its concern about the president’s powers to dissolve the parliament, to call early elections, and to appoint a vice-president who, in practical terms, would be an unelected second-in-command.

Even though the voting has yet to be finalised, the rejection of the proposed amendments seems highly unlikely in contemporary Azerbaijan. Henceforth, in the face of domestic and international concern, the presidential office, which is already remarkably strong, will be further reinforced. Unfortunately, this seems to be a prelude to a further consolidation of the authoritarian tendencies in the country.

This research was supported by a FP7/Marie Curie ITN action. Grant agreement N°: 316825

Notes

[1] BBC Monitoring Trans Caucasus Unit. 2016. ‘Azeri court approves referendum on constitutional change’, 26 July (Retrieved through LexisNexis).

[2] In addition to him, the president has two daughters, Leyla and Arzu.

[3]Turan Information Agency. 2016. ‘It’s time for the United States to act on Azerbaijan’, September 9 (Retrieved through LexisNexis).

[4] Turan Information Agency. 2016. ‘Arif Hajili: Usurpation of Power Will Not Save Aliyev’. 18 September (Retrieved through LexisNexis).

[5] Turan Information Agency. 2016. ‘Jamil Hasanli: Aliyev does not get tired to pervert the Constitution’. September 17 (Retrieved through LexisNexis).

[6] The role of the Venice Commission, with reference to the constitutional referendum in Armenia, has already been discussed in this blog.

[7] Turan Information Agency. 2016. ‘The report of “Musavat” about the referendum campaign’. 5 September (retrieved through LexisNexis).

Azerbaijan – F1 and the limits of public diplomacy

From 17-19 June, the Formula One Grand Prix took place in Baku. In contrast to the “European Games” in 2015, the race received limited attention from governmental actors and the Azerbaijani media. Two explanations are possible. The first lies in the changed domestic circumstances. Given the global low energy price and its dramatic setback on citizens’ life standards, politicians deemed it inappropriate to focus too much attention on such frivolous spending. The second lies in the disappointing international reception to last year’s “European Games”.

President Ilham Aliyev, who is known for his interest in sports events, kept an unexpectedly low profile before, during and after the F1 race. Even though he and his wife, Mehriban Aliyeva, attended the opening ceremony and presented the trophies at the end, in the preceding months, Mr Aliyev almost never mentioned this event[1]. For example, on 16 June, the day before the race, the most high-profile remark to Parliament came from Ali Hasanov, the president’s aide for public and political affairs. This is in contrast with the attention paid the “European Games”. On that occasion, the President personally inaugurated most of the sports facilities and did not miss a chance to voice his enthusiasm. At the award ceremony, he used phrases like: “These Games united our people even more, instilled a sense of pride in us – just look at what we are capable of accomplishing!”. One year on, the quest for attention seems to have been dimmed. We can see this in the media coverage of the event too where studies reveal that the Formula One race received considerably less attention[2]).

The first explanation for this change lies in domestic conditions and the dramatic drop in energy prices. As already analysed in this blog,  Azerbaijan faced a devaluation of its currency at the beginning of the year, which has led to the dissatisfaction of its citizens. In the following months, the local Manat has remained extremely weak and unemployment has risen. This situation does not seem temporary and a mix of recession and high inflation is likely for the next two years[3]. With the exception of those who managed to rent out their balconies to view proceedings, the race, which placed an additional burden on the shrinking state budget, does not seem to have brought any particular benefits to the population. That said, the decline in living standards does not seem to have affected the Aliyev family. In April, the four-day-war in Nagorno-Karabakh caught most the public attention, but at the same time the leaked “Panama Papers” revealed that Leyla and Arzu Aliyeva, daughters of the President, held a 56 per cent stake in the development of a profitable gold mine. Given this situation, any undue emphasis on the F1 race, when most citizens are struggling to make ends meet, could have easily sounded like “let them eat cake”.

The second explanation, which complements the first one, is that, after the European Games, Azerbaijan had an abrupt awakening about the limits of public diplomacy. Even though President Aliyev recently declared that: “The first European Games (…) were very successful”, very few heads of European states (namely Bulgaria, Luxemburg, San Marino and Monaco) flew to Baku to attend them. Most politicians simply declined the invitation. However, a day before the inauguration ceremony, the German Bundestag, on the grounds of human right violations, prohibited high-ranking state officials from attending the event.  Additionally, in spite of some official claims about the influx of tourists (without providing any numbers), international arrivals were probably below expectations. In addition to this disappointing international attendance, few international reporters focused on the competition. Instead, most of the international press wrote about the country’s human rights record, rather than about the brand-new infrastructures. Notably, The Washington Post criticised the pop-singer Lady Gaga for performing at the opening ceremony, while some human rights defenders were held in jail[4]. Even though presidential speeches never mentioned these facts, domestic actors observed the limited PR effect of this initiative. For example, Emil Huseynli, chairperson of the `Support for youth development’, declared that the cold reception to the games was part of a global smear campaign against Azerbaijan. Additionally, some Azerbaijani news sources reported that some Youth Groups protested against the fact that, according to them, the European Parliament politicised the Games “as a way of putting pressure on Azerbaijan”. In short, it soon became apparent that instead of boosting the international reputation of the country, the Games put the spotlight on undesired topics.

In conclusion, a year ago Azerbaijan seemed a confident actor, determined to win over the international community by means of a well-funded public diplomacy campaign. However, the changed economic circumstances, together with the lessons learned about the limited efficacy of this strategy, seem to have brought about a partial reconsideration of this strategy.

This research was supported by a FP7/Marie Curie ITN action. Grant agreement N°: 316825

Notes

[1] Looking at the English version of the official Website of the President of Azerbaijan, this event has been only mentioned, along with numerous other points, in occasion of the opening of Azerbaijani-German Economic Forum in Berlin.

[2] Translated into English by BBC Monitoring.

[3] BMI Research. 2016. “Stagflation To Persist”, Business Monitor Online, March 10 (Retrieved through LexisNexis).

[4] “Blinders in Azerbaijan”. 2015. The Washington Post, August 9 (retrieved through Lexis Nexis).ze

Armenia: recognizing Karabakh? The Armenian debate and the reaction from Azerbaijan

In the aftermath of the “4 Days War” in Nagorno-Karabakh, the Armenian President, Serzh Sarkisian, declared that, in the case of resumed hostilities, his country would recognize the de facto Republic of Nagorno-Karabakh. One month after, a bill titled “On recognition of Republic Artsakh [Nagorno-Karabakh]”, submitted by two opposition MPs, was approved by the Government and presented to the Parliament for discussion. Nevertheless, both political and media actors have bee equivocal about the suitability of the unilateral recognition of Nagorno-Karabakh. From the Azerbaijani side, it is remarkable the limited attention this event was given. In particular, President Ilham Aliyev, who in the past adopted a warmongering narrative, has not commented on this specific development.

Following the cease fire in 1994, Nagorno-Karabakh consolidated itself as a de facto state after a bloody war between Armenia and Azerbaijan. Currently, its statehood remains completely unrecognized given that not even its Armenian patron has taken a formal stance in that direction. This choice has been mostly motivated by the commitment not to spoil the mediation effort of the Minsk Group, which is the OSCE group in charge of facilitating a resolution of the stalemate. For example, speaking to the representatives of the mass media in March 2013 President Sarkisian declared: “What will the citizens of NK and Armenia gain today if independence of NKR is recognized? (…) How dangerous will such a decision for the people of Nagorno-Karabakh be? (…) It means a slap in the face not only for the other side but also for the Co­chairs [of the Minsk Group]”. In brief, it is argued that recognizing Nagorno-Karabak would lead only to new troubles in the absence of tangible benefits. This position was widely shared by the Armenian political spectrum as demonstrated by the rejection of the various pro-recognition bills proposed by “Heritage Party”. However, in 2010 International Crisis Group pointed out that, in the case of resumption of full-scale hostilities, the de facto state may be recognized and a pact of mutual defense with Nagorno-Karabakh may be signed. After April 2016, political actors had to deal seriously with these issues.

“If military actions were to continue and escalate on a larger scale, the Republic of Armenia would recognize the independence of Nagorno Karabakh. With these words, on the 4th of April, President Sarkisian hinted at the possibility of formal recognition. However, after the end of the armed hostilities, no further declaration in this direction came from the Presidential office. By contrast, some actors in the opposition considered the time ripe to bring forward this issue again. = That translated into a bill called “On recognition of Republic Artsakh,” proposed by the opposition PMs Zaruhi Postanjyan (Heritage party) and Hrant Bagratyan (Armenian National Congress). On the 5th of May the Armenian government approved it for parliamentary discussion within 30 days. As expected, this triggered a debate not only in Armenia but also abroad.

Although most external powers did not openly comment on this decision, Russian officials manifested their opposition. Remarkably, at the beginning of May, the Russian Minister of Foreign Affairs, Lavrov, spoke against unilateral recognition. It is reasonable to say that the Russian stance may have influenced the public debate. At the moment, politicians from both the government and the opposition are adopting a prudent attitude. Prime Minister Abrahamian said that, with Azerbaijan respecting the cease-fire, there is no need to rush into recognition. Similarly, the Minister of Foreign Affairs, Edward Nalbandian, reassured external powers saying that: “The conclusion of the Government does not imply an endorsement of that initiative. (… ) [In that event], the President of the Republic of Armenia, would inform his partners in advance and, first of all, the heads of the OSCE Minsk Group Co-Chair countries”. This moderate position is also shared by the bulk of the opposition. Armen Rustamyan, the leader of the ARF faction in parliament, declared that recognition should not be unilateral, but instead in line with the Minsk Framework. Similarly, a few days previously, former President Ter-Petrosyan stated that a premature recognition of Karabakh would irremediably jeopardize the effort of the Minsk group. Turning to the media debate, most Armenian newspapers agree that an early recognition would harm the interest and the long-terms goals of the country[1].

Given the sensitivity of the issue, Baku may be expected to react to such a move. However, it = composed behaviour adopted by Azerbaijan has taken observers by surprise. This is in striking contrast to the previously assertive narrative. Whereas in the past President Aliyev continuously reaffirmed the military strength of his country and the commitment to the re-conquest of the lost lands, recently his declarations seem more conciliatory and less in favor of resuming hostilities. Consistent with that, the reaction to the possible recognition of Nagorno-Karabakh has remained contained. Hikmet Hajiyev, the Foreign Ministry’s acting spokesperson, declared that: “By recognizing the separatist regime formed in the occupied territories of Azerbaijan, Yerevan will put an end to the Minsk peace process and should this happen, the Minsk Group will possess no negotiating mandate”[2] Thus, no explicit declaration came from the President and the media debate remained limited. Speculating on the reasons behind that, it can be hypothesized that the country, which has been severely hit by the drop in oil prices, may be reconsidering its extra-assertive attitude and narrative of the previous years. The liberation of prominent political prisoners in the past months has already been read in this vein.

In sum, even though probably it will not have an immediate follow up, the Armenian debate on the recognition of Nagorno-Karabakh is relevant not only for Yerevan but also for Baku. Thus, the fact that Armenia is acting cautiously makes new attempts of mediation possible. On 16th of May, the two presidents will meet in Vienna even though, given their irreconcilable positions, expectations for a breakthrough run low[3].

This research was supported by a FP7/Marie Curie ITN action. Grant agreement N°: 316825

Notes

[1] “Armenian press say Karabakh recognition matter of time, but not now”, BBC Monitoring Trans Caucasus Unit, May 10, (2016).

[2] Russia & CIS General Newswire, “Recognition of Karabakh independence by Yerevan to derail OSCE Minsk group’s mediation efforts – Azerbaijani Foreign Ministry”, May 3, (2016).

[3] “Armenian press skeptical about “favorable” outcome of meeting with Azerbaijan”, BBC Monitoring Trans Caucasus Unit, May 14, (2016).

 

Armenia and post-sanctions Iran. Opportunities and constraints

The beginning of 2016 will be probably remembered for the lifting of international sanctions on Iran. This event has changed long-consolidated equilibria not only in the Middle East but also in the South Caucasian region. While oil-rich Azerbaijan has good reasons to fear the return of Teheran on the global energy market, apparently Armenia has only to gain from that. Even if the two bordering (and internationally isolated) countries have always somehow interacted, Yerevan knew that too much enthusiasm in this regard would have not only enraged the Russians, but also severely compromised its relations with the western word.  Departing from that, the recent international rehabilitation of Iran provides an interesting opportunity to Armenia, allowing it to have a normal relationship with another bordering country (in addition to Georgia). Currently, talks between the two countries are ongoing. Among other things, the possibility of Iranian gas transit through Armenia is being discussed. In spite of all these potential gains, the Armenian presidential office is remarkably silent on the issue. Remarkably President Sarkisian, who at the beginning of March found the time to congratulate the “Young land defender members”, did not make any public declarations about future forms of cooperation with Iran. Similarly the Ministry of Foreign Affairs, which has actively worked to make talks happen, has not advertised these efforts loudly. This low profile can be put down to the fear of enraging Russia. However, even if this factor is absolutely crucial, it would be incorrect to explain the whole dynamic in light of the interaction with the Kremlin. Conversely, a deeper understanding can be gained first by looking at the relation of Yerevan with the West and second by looking at the domestic dimension.

Further cooperation with Iran would undoubtedly benefit Armenia. First, it would be a golden opportunity for Yerevan to break its “dual dependency” on Russia, as energy provider, and on Georgia, as a main transit route.  As result of the Nagorno Karabakh conflict, Armenia’s borders with Turkey and Azerbaijan have been closed. This has led to a pattern of asymmetric relations with Russia. Second, better relations with Iran would indirectly advantage Armenia vis-à-vis Azerbaijan, which in turn has been experiencing some lingering tensions with the Shi’ite giant.  More specifically, even if both Baku and Teheran are Shi’ite energy-rich countries, cooperation is hampered not only by different ideas about the role of religion in public, life but also by the presence of a large Azeri minority (around 20 million people) in Iran. In spite of that, they have found some understanding, as exemplified by their decision to complete a railway link by the end of 2016. However, this project does not mean that Mr Rohani has ruled out the Armenian option. Remarkably, in February Armenian public TV announced that Iranian specialists would soon visit the country and assess the feasibility of a railway connection. In brief Armenia, over-dependent on Russia and structurally isolated from the rest of the region, seems on the paper a less-attractive partner than Azerbaijan. However, the tensions between Teheran and Baku may work in favour of Yerevan by promoting its inclusion in Iran’s long-term plans.

Despite all the aforementioned benefits, Iranian-Armenian cooperation is not obstacle-free. First, the Armenian potential for international actions is severely restricted by its pervasive ties with Russia. Looking specifically at energy and economic factors, two elements emerge: the role of Gazprom and the membership in the Eurasian Union. First, the Russian state-owned Gazprom gas company is in control of the whole Armenian gas market. More precisely in 2014 Gazprom, which was already the majority stakeholder in the Armenian gas company, bought the remaining shares and become its sole owner[1]. Additionally, in January 2015 Armenia joined the Russian-led Eurasian Union. Due to its membership, Yerevan is barred from setting its own custom duties and, consequently, restraints are placed on its free-trade policy. All these elements are indicative not only of the Kremlin’s influence over Armenian external relations but also its interest in keeping the “smaller brother” firmly in its orbit.

As already hinted, understanding the Russian factor is necessary but not sufficient to explain the Armenian-Iranian relationship. Remarkably, the willingness to keep good ties with the United States and the European Union is another important factor in the equation. When sanctions were in place there was a tacit understanding that the West, first and foremost the US, would not have tolerated blatant violations of the international embargo. Henceforth, interactions with Teheran had to been qualitatively discreet and quantitatively limited. Even if the lifting of the sanction regimes changes this state of things, the situation is still too fluid to allow excessive public expressions of enthusiasm. The same applies to Brussels. In a recent interview the EU representative for external affairs, Federica Mogherini, when asked if Yerevan could act as the “new Hong-Kong” and connect the EU to Iran, answered that Brussels, fully aware of the potential benefits, is closely observing the situation[2]. In a nutshell, given the “in-progress” nature of this geo-political shift, Armenia seems to consider it prudent to interact discretely with Teheran rather than to voice premature enthusiasm.

The final constraint to the enhancement of the Iranian vector has domestic rather than international origins. From a series of expert interviews in summer 2015, some concerns about making deals with Iran[3] emerged. Generally speaking, the Iranians were described as difficult partners to come to terms with. This view is not restricted only to the indigenous cultural elite, but is also shared by the population at large. Remarkably, from a Caucasus Barometer survey it emerges that only 52% of Armenians approve of doing business with Iranians[4]. This approval rating is significantly lower than the case of doing business with Russians, Americans, Europeans and Georgians. This analysis of grassroots perceptions suggests that deals with Iran, even if objectively convenient, may encounter a lukewarm domestic reaction. That might explain why Armenian political actors, first and foremost the president, are not eager to advertise the recent developments with Iran too much. In sum, while international considerations are important for understanding Armenia’s cautious approach to Iran, domestic implications should be further investigated.

This research was supported by a FP7/Marie Curie ITN action. Grant agreement N°: 316825

Notes

[1] Even before, the contractual strength of Russia over Armenia successfully prevented any real energy diversification.

[2] BBC Monitoring Trans Caucasus Unit (2016), “EU foreign policy chief interviewed on relations with Armenia”, February 29 (Retried through LexisNexis).

[3] All conducted by the author in Yerevan, in English, as part of the fieldwork related to her PHD thesis.

[4]  46% disapprove and 2% do not know.

Azerbaijan – Fall in oil price, economic crisis and possible political consequences

The drop in the global oil price represents a cold shower for the oil-producing economies. In 2008 a barrel cost $140, whereas in January 2016 it is now down to $30. The Middle-Eastern dynamics, first and foremost the rivalry between Saudi Arabia and the previously-sanctioned Iran, do not suggest a quick reversal of this trend. In light of that, the oil-rich economies have had to review their budget allocations and growth forecasts. Azerbaijan is no exception in this regard.

If we compare the first presidential speeches of 2015 and 2016, President Ilham Aliyev seems extremely aware of the trend affecting the country. In 2015, reviewing the economic performance of the past year, Mr. Aliyev proudly said: “Our main economic indicators for 2014 are very positive. I can say that perhaps they are the highest in the world”. By contrast, at the beginning of 2016 the president had to admit that: “The development which was observed in previous years has not been achieved. That was not possible, because, as I have already noted, the price of oil has fallen 3-4 times”.

The drop in oil prices is not purely an economic issue. Indeed, this dynamic may have strong repercussions on the political system, which is dominated by the president. Remarkably, Azerbaijan is by far the wealthiest country in the South Caucasus. According to CIA Factbook, in 2014 the GDP Per Capita was $17,800. In comparison, Georgia’s and Armenia’s was $9,200 and $8,200 respectively. Azerbaijan is also the most authoritarian of the three countries. In fact, according to the Freedom House, the country is Not Free. These data are relevant because various analyses point to a link between oil wealth and the authoritarian regime in the country. More precisely, Farid Guliyev[1] considers that the oil revenue, managed by a State Oil saving Fund, has benefited and expanded a patronage network and ultimately has fostered the stability of the ruling regime. Similarly Jody La Porte[2] considers oil wealth to have promoted elite cohesion and economic prosperity. These circumstances have made it possible to effectively marginalise existing and potential opposition movements[3].

Over the years, the huge energy revenues have triggered a dynamic which often characterises oil-producing states: rentierism. Azerbaijan can be considered a rentier state since the bulk of the state budget is made up of oil and gas dividends instead of taxes. In fact, given the abundance of energy resources and the positive global energy trend (for producing states), oil and gas were the main economic focus of the country. The CIA Factbook data shows that energy commodities constitute 90% of national exports, which, in turn, compose 43.3% of the state GDP. Even if the Azerbaijani president has periodically mentioned the importance of boosting the non-oil sector, various experts seemed skeptical about the practical application of that. Farid Guliyev, analyzing the phenomenon, observes that it has mainly concretized in the form of pharaonic infrastructures, carried out by elites’ cronies and payed for by oil money[4]. Similarly in summer 2015 another local expert, under condition of anonymity, called this emphasis on the development of the non-oil sector as an empty litany: many words and no concrete actions.

This rentierism, in the absence of abundant oil revenues, does not seem sustainable anymore. Suddenly, diversification has become a top priority and the declarations about it no longer sound like an empty statement: the poor state of the local finances requires something to be done. Looking at the steps taken, the stabilization of the currency seems the main targeted area. That has been made urgent by the decision taken by the Central Bank on 21 December to unpeg the Manat (which is the local currency) from the Dollar and let the currency fluctuate. This happened only after half of the hard-currency national reserves were used up in a desperate attempt to postpone the inevitable. As a result, in a few days the Manat lost one third of its value.

The devaluation of the local currency has been feared for a long time. From mid-November, hard currency was available only in banks, tourist facilities and airports. In fact, almost everybody expected it to happen in the immediate aftermath of the European games in summer 2015. Not only citizens but also banks considered this possibility extremely realistic and started to grant loans in dollars. Radio Free Europe has reported the story of a desperate debtor who explained how, no matter insistent he was, he could not obtain a loan in the local currency. Even if it was expected, the devaluation hit  many citizens hard, seeing prices rocketing up in few hours and their life-time savings shrinking. In reaction, protests took place in various cities and in some cases resulted in clashes with the police and arrests. At the moment, measures taken to mitigate the monetary shock include: the imposition of limits on foreign currency outflows and the introduction of a 20 per cent currency tax aimed at discouraging direct investments or real estate purchases abroad[5]. Additionally, the president has recently approved some poverty-reduction measures. Among them, some pensions will be increased by ten per cent. In the next months new welfare provisions, such as scholarships and extra-employment benefits, will be probably introduced.

Considering these circumstances the state budget for 2016 has been revised and now forecasts factor in the oil price at $25 per barrel instead of $50. Additionally, the presidential office plans to grant fiscal advantages to investors who will diversify the economy. For example, for seven years entrepreneurs who import equipment in Azerbaijan not only will not pay taxes but also will have only half of their income taxed[6]. However, even if almost everybody talks openly of the economic difficulties, the new circumstances will not end tout court the willingness of the country to host international grand events. For example, the organization of the Formula One Grand Prix, scheduled for June 2016, will not be affected by any new measure.

In light of these elements, it is worth looking at how the president frames the issue. On January 2016 the website of the World Economic Forum published an article authored by Mr. Aliyev. On that occasion, consistent with what he had said in previous days (and which is reported at the top of this post), Ilham Alieyv admitted that global trends were not favorable to the structure of the Azerbaijani economy. However, he declared that the government was doing everything in its power to mitigate the negative circumstances. He also added that, in spite of the low oil price, Azerbaijan is still crucial in providing energy security to Europe. Thus, the authorities are actively managing the things they have control over. The next weeks and months will show the response of the population. There is no obvious development. Even if the Azerbaijani establishment is perfectly in control of its security forces, some nervousness among top elites can reasonably be expected. As Thomas de Waal masterfully put it: “The public, it seems, can forgive an authoritarian government almost anything except a falling standard of living”.

This research was supported by a FP7/Marie Curie ITN action. Grant agreement N°: 316825

Notes

[1] Guliyev, Farid. “Oil and Political Stability in Azerbaijan: The Role of Policy Learning.” Caucasus Analytcal Digest 47 (2013)

[2] LaPorte, Jody. “Hidden in Plain Sight: Political Opposition and Hegemonic Authoritarianism in Azerbaijan.” Post-Soviet Affairs 31, no. 4 (2015): 339-366.

[3]The oil revenue does not only affect domestic policies but also foreign policy strategies.  In this regard, the ESI Think Tank coined the term “Caviar Diplomacy”, which refers to the Azerbaijani strategy of winning over Western public figures in exchange for precious gifts.

[4] Guliyev, Farid. “‘After Us, the Deluge’: Oil Windfalls, State Elites and the Elusive Quest for Economic Diversification in Azerbaijan.” Caucasus Analytical Digest 69 (2015).

[5] AAP Newsfeed. “CIS: Azerbaijan imposes currency controls.” January 19, 2016.

[6] “New law excepts some Azeri entrepreneurs from tax for seven years”, BBC Monitoring Trans Caucasus Unit (2016), January 19.