Publication: Eurasia Daily Monitor Volume: 5 Issue: 81

On April 22 Armenia’s new President Serzh Sarkisian completed the formation of his cabinet comprising representatives of four political parties and key loyalists of his predecessor Robert Kocharian. The appointment of the last five government ministers came after weeks of horse-trading within the ruling coalition, which is still grappling with a serious political crisis triggered by February’s disputed presidential election.

Of the 17 ministers appointed by Sarkisian following his April 9 inauguration, 11 had held the same positions in the previous government. Five of them are affiliated with the governing Republican Party’s junior coalition partners, the Armenian Revolutionary Federation (ARF, also known as the Dashnak Party) and the Prosperous Armenia Party. Two of the six new ministers represent another party, Orinats Yerkir (Country of Law), the leader of which, Artur Baghdasarian, came in third in the presidential race and recognized its outcome after being offered government posts. Orinats Yerkir will now control the ministries of transport and emergency situations.

The more powerful ministries of defense, foreign affairs and finance will be run by three other new figures who have no party affiliations. The fourth (and most influential) newcomer is Deputy Prime Minister and Minister for Local Government Armen Gevorgian. The 34-year-old Gevorgian had served as Kocharian’s chief-of-staff and is widely regarded as the most trusted of the former president’s aides. Gevorgian’s new role will enable Kocharian to retain influence on government policies. The extent of that influence will depend on who will manage the Armenian police, the National Security Service (NSS), and the tax and customs services, most of which are expected to have new heads in the coming weeks.

The scale and intensity of post-election demonstrations staged by Sarkisian’s main election challenger, Levon Ter-Petrosian, showed just how dissatisfied many Armenians are with their government, despite six consecutive years of double-digit economic growth. A visible increase in living standards has been accompanied by growing government corruption and a widening income gap between the country’s wealthiest citizens connected to the government and the vast majority of the population. The resulting widespread sense of injustice is a key reason why the once unpopular Ter-Petrosian made an unexpectedly strong showing in the February 19 election, which he considers to have been rigged. It took lethal force and military intervention to stop tens of thousands of angry protesters from sweeping the Kocharian-Sarkisian camp from power.

With the political crisis continuing, Sarkisian is clearly worried about this popular sentiment as he begins his five-year term in office. In his public statements that followed the deadly post-election unrest in Yerevan, Sarkisian renewed his earlier pledges to instigate “second-generation reforms” that would strengthen the rule of law and lead to a more even distribution of the benefits of economic growth. His newly appointed prime minister, Tigran Sarkisian (no relation), has echoed those pledges, announcing his intention to implement “ambitious” policies. The 48-year-old economist is known as a free-market reformer who earned plaudits from the International Monetary Fund and the World Bank in his previous capacity as chairman of the Central Bank of Armenia. Local observers doubt, however, that he will have the political muscle to take on economic clans that have long enjoyed preferential treatment by the government and that form the backbone of President Sarkisian’s power base.

The composition of the new Armenian government hardly bodes well for far-reaching policy changes. Addressing university students in Yerevan on March 12, Sarkisian implied that it would be radically different from the previous cabinet. “There will be changes that many people do not expect,” he said (Aravot, March 13). But the changes were few and not quite unexpected. Victor Dallakian, a veteran parliamentarian close to some regime insiders, suggested on April 22 that Sarkisian had been forced to keep dodgy Kocharian loyalists like Gevorgian in the government, because of the former president’s decisive role in the violent suppression of the opposition protests. Dallakian claimed that the new president would try to get rid of them if he managed to solidify his grip on power (RFE/RL Armenia Report, April 22).

“We have no right to say, ‘Dear people, tighten your belts, wait until we implement second-generation reforms in three, four or five years, and you will be better off,’” Sarkisian told the leadership of the State Tax Service (STS) on April 23 (Armenian Public Television, April 23). He demanded that tax officials stop harassing small and medium-sized businesses to meet their rising revenue targets. Sarkisian made even stronger statements at a similar televised meeting with senior officials from the State Customs Committee (SCC) on April 18, saying that corruption within the government agency was “thriving” and hampering Armenia’s economic development.

The sincerity of these remarks is questionable, given the fact that Armen Avetisian, the reputedly corrupt head of the SCC who was sacked earlier in April, is a longtime close associate of Sarkisian. Sarkisian himself has been accused by government critics of amassing a huge fortune and helping a handful of government-connected tycoons monopolize lucrative sectors of the Armenian economy over the past decade. For their part, the so-called “oligarchs” have helped the ruling regime win elections by less than legal means. Keeping them and other government-connected wealthy individuals happy while addressing the long-simmering public discontent in earnest seems a mission impossible.