Publication: Eurasia Daily Monitor Volume: 2 Issue: 35

The Armenian authorities have been under domestic pressure in recent weeks to end what many see as the virtual impunity enjoyed by the country’s tiny class of millionaire businessmen with close government ties. The Armenian version of post-Soviet “oligarchs” are widely hated — and feared — for their utter disregard of laws and conspicuous wealth that contrasts with the country’s widespread poverty.

The ruling regime has heavily relied on the oligarchs to manipulate elections and bully its political opponents, making it doubtful that any serious action will be taken to rein them in.

Still, the authorities had to do something after a late-night gunfight in a Yerevan suburb on February 4 between two criminal groups left at least one person dead and several others seriously wounded. It was the most massive shootout reported in the Armenian capital in a decade, involving, according to newspaper reports, hundreds of gunmen. Some of them were said to be personal bodyguards of several of the oligarchs who hold seats in parliament.

The incident reportedly stemmed from a dispute over control of a local minibus service, a highly lucrative business activity that is the exclusive domain of senior government officials, their cronies, and loyal businessmen. It seems to have raised President Robert Kocharian’s eyebrows, with police making dozens of arrests and confiscating large quantities of weapons. Yet the key question of whose business interests were behind the mafia-style clash remains unanswered.

Local newspapers were quick to draw grim conclusions. “Much of the political power in Armenia is concentrated in the hands of criminal business . . . and illegal armed groups belonging to it,” the pro-opposition daily Aravot wrote on February 9. Golos Armenii, a paper that staunchly backed Kocharian during the last presidential election two years ago, was even more outspoken: “The semi-presidential form of governance in Armenia is coming to an end and will be replaced by absolute oligarchy, the rule of a few individuals . . . The executive and legislative branches are, in essence, already intertwined with the oligarchs and controlled by the latter.”

Armenian tycoons are typically individuals with a high school-level education who made fast money during the turbulent 1990s and now have extensive business interests dependent on government support. For example, one of them, Samvel Aleksanian, enjoys a de facto monopoly on imports of sugar and flour to Armenia, while Russian citizen Mikhail Baghdasarov has the exclusive grip on fuel supplies. Both men are believed to operate under the “tutelage” of Defense Minister Serge Sarkisian, Kocharian’s most trusted lieutenant.

The oligarchs like to flaunt their wealth, living in ridiculously big villas and roaming the streets in motorcades made up of several SUVs with almost identical license plates. Many Armenians would agree that traffic lights are essentially non-existent for them.

In fact, just one week before the infamous shootout, one such behemoth, the hugely expensive civilian version of the U.S. army’s Humvee vehicles, crashed into three other cars on a busy street intersection near downtown Yerevan at a high speed, killing two people, and injuring several others. The police have reported no arrests so far and are reluctant to name the Hummer’s real owner. There are only 11 such cars in Armenia.

What makes the oligarchs particularly important for the regime is the fact that they usually hold sway in a particular area of the country through their businesses and local quasi-criminal elements. They are able to bribe and intimidate local voters and resort to other election falsification techniques. Ballot box stuffing was commonplace during the 2003 presidential election, which Western observers described as undemocratic. But the criticism did not prevent many tycoons from themselves getting “elected” during the equally disputed parliamentary polls held a few months later.

Another common feature of the Armenian super-rich is the burly and mostly unarmed “bodyguards” that accompany them at every turn. The men’s most visible characteristic, a shaven head or a short haircut, has brought a new political meaning to the word “skinhead” in Armenia.

The authorities needed their services last spring when the Armenian opposition tried unsuccessfully to force Kocharian to resign with a campaign of street protests. Scores of riot police stood by and watched as two dozen well-built thugs smashed photojournalists’ cameras after trying to disrupt an opposition rally in Yerevan on April 5, 2004. Opinion differed only on which powerful individual employed them.

Two of the assailants subsequently received a slap on the wrist when a Yerevan court fined them after a parody of a trial. One of the defendants was also a key participant in the February 4 gunfight, according to media reports. This man is now reportedly under arrest pending trial. His possible imprisonment would touch only the tip of the iceberg, however, as none of the big fish is likely to end up behind bars.

“Everybody is scared,” Golos Armenii noted alarmingly. “The oligarchy controls everything and as the [next] elections approach it will increasingly tighten its stranglehold on political forces in order to avoid surprise developments.”

(Golos Armenii, February 12; Haykakan Zhamanak, February 12; Aravot, February 9).