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The Cup Runneth Over: A New Era of Oligarchic Competition
By Serouj Aprahamian on February 14, 2015
http://armenianweekly.com/2015/02/14/new-era/
Special for the Armenian Weekly
Civic activist Artak Khachatryan was kidnapped by three masked men in
front of a shopping center in Yerevan, on Sat., Feb. 7. He was found
hours later beaten unconscious on the side of a street near his home.
Prosperous Armenia member Artak Khachatryan lies in a hospital bed
after being abducted and beaten by unknown assailants.
Khachatryan has played a leading role in protests against the
government's controversialTurnover Tax Law affecting small and medium
sized businesses. He is also a prominent member of the Prosperous
Armenia Party (PAP), the second largest political party in Armenia's
parliament, headed by well-known oligarch Gagik Tsarukyan.
The beating immediately prompted harsh condemnation from the PAP. The
party's political council placed responsibility for the crime on the
ruling regime, and threatened to take to the streets and boycott
parliament should the perpetrators go unpunished.
What followed was a series of warnings from the government and
responses from Tsarukyan's team, culminating in an aggressive speech
by President Serge Sarkisian five days later. The speech has been
characterized as a virtual declaration of war against Tsarukyan, with
Sarkisian hurling personal insults and promising to crackdown on the
opposition tycoon.
In turn, Tsarukian responded the next day calling for snap elections
and the organization of rallies, marches, protests and civil
disobedience aimed at removing the president from office.
This unexpected flurry of events has blown open a dramatic rift in the
upper echelons of Armenia's oligarchic establishment.
Up until 2012, Tsarukyan's party was a member of the governing
coalition and considered to be close to the president. Whatever
differences existed between the two were considered to be mostly
cosmetic. Many even felt that PAP's leaving the coalition was a ploy
to divide the opposition, rather than an actual challenge to the
regime. As is often pointed out, the two sides even share family ties,
with one of Tsarukyan's daughters being married to Prime Minister
Hovik Abrahamyan's son.
So what happened to replace the oligarchic unity of the past with the
clearly deep fissures of today? Was the beating of a civic activist
enough to spark a war of words that has spilled over into open
confrontation?
Making sense of these developments requires us first to recognize
that, for businessmen of Tsarukyan's stature, the state represents a
major threat to their wealth. Unlike oligarchs in developed countries,
the elite in Armenia do not have a stable and functioning legal system
to defend their fortunes.
Making sense of these developments requires us first to recognize
that, for businessmen of Tsarukyan's stature, the state represents a
major threat to their wealth. Unlike oligarchs in developed countries,
the elite in Armenia do not have a stable and functioning legal system
to defend their fortunes. They must constantly find alternative ways
to maintain their privilege. This explains why so many feel the need
to directly hold political office, control media outlets, and assemble
their own private armies.
Having often gained their riches through dubious means themselves,
they are at all times susceptible to state reprisal should they raise
their head. Those who have dared challenge government policy in the
past, no matter what their status or wealth in society, have been
quickly retaliated against.
For example, during the 2008 presidential elections, opposition
candidate and former president Levon Ter-Petrosian openly tried to
court oligarchs such as Tsarukyan to his side, warning that they face
the constant risk of losing their fortunes under the current regime.
Indeed, tycoons such as Khachatur Sukiasyan who supported
Ter-Petrosyan were driven out of the country, having many of their
assets seized and handed over to pro-government businessmen. This
gloves-off response did not go unnoticed by the likes of Tsarukyan.
Even before that, the central concern of the super-rich in Armenia has
always been protecting themselves against threats to their wealth and
property. A 2003 study by the Armenia 2020 project, based on
interviews with13 leading oligarchs, concluded that "the state, its
machinery and institutions are perceived by the oligarchs as a
dangerous force, able at any moment to cause serious damage to their
business."
Former coalition partners, oligarch Gagik Tsarukyan and President
Serge Sarkisian, have gone from allies to adversaries over recent
weeks.
Tsarukyan and his party have made clear that their main concern is
changing this economic environment in the country. They have rallied
against higher taxes, seizure of companies through state power, rising
national debt, unfavorable investment conditions, and crisis in the
financial market. An often repeated phrase from Tsarukyan and other
PAP members is that the "people's patience has run out," that their
"cup has runneth over," and that is why he has entered the political
arena.
Developments over the past week have proven that the oligarchic class
is not a homogenous entity many once made it out to be. The tacit
ruling arrangements of the past have broken down. There are clearly
divergent interests at play, and opposing groupings taking shape.
Given the immense resources at his disposal, the challenge posed by
Tsarukyan to the Sarkisian regime is certainly a serious one.
Also backing Tsarukyan is the 2nd president of the country Robert
Kocharian who has been releasing specially tailored interviews on his
website, 2rd.am, criticizing Sarkisian's reign--especially his economic
policies--and calling for radical change. In his latest interview on
Jan. 23, he stated that the biggest obstacle to progress in the
country is "the conflict between the political elite's economic
interests and the long-term interests of the nation."
These adversarial shifts among Armenia's oligarchic class represent a
serious new struggle for power within the country--one that is
motivated first and foremost by defending wealth and privilege.
These adversarial shifts among Armenia's oligarchic class represent a
serious new struggle for power within the country--one that is
motivated first and foremost by defending wealth and privilege.
Contrary to rhetoric from both sides about democracy and the common
good, what we are seeing is the polarization of the ruling elite in
terms of those connected to the state apparatus and those threatened
by or opposed to it.
It is yet to be seen what will result from this increased friction in
the upper echelons of power. What we can be sure of is that there is a
new era of oligarchic competition taking shape that is likely to have
very significant ramifications for the future of the country's
development.
By Serouj Aprahamian on February 14, 2015
http://armenianweekly.com/2015/02/14/new-era/
Special for the Armenian Weekly
Civic activist Artak Khachatryan was kidnapped by three masked men in
front of a shopping center in Yerevan, on Sat., Feb. 7. He was found
hours later beaten unconscious on the side of a street near his home.
Prosperous Armenia member Artak Khachatryan lies in a hospital bed
after being abducted and beaten by unknown assailants.
Khachatryan has played a leading role in protests against the
government's controversialTurnover Tax Law affecting small and medium
sized businesses. He is also a prominent member of the Prosperous
Armenia Party (PAP), the second largest political party in Armenia's
parliament, headed by well-known oligarch Gagik Tsarukyan.
The beating immediately prompted harsh condemnation from the PAP. The
party's political council placed responsibility for the crime on the
ruling regime, and threatened to take to the streets and boycott
parliament should the perpetrators go unpunished.
What followed was a series of warnings from the government and
responses from Tsarukyan's team, culminating in an aggressive speech
by President Serge Sarkisian five days later. The speech has been
characterized as a virtual declaration of war against Tsarukyan, with
Sarkisian hurling personal insults and promising to crackdown on the
opposition tycoon.
In turn, Tsarukian responded the next day calling for snap elections
and the organization of rallies, marches, protests and civil
disobedience aimed at removing the president from office.
This unexpected flurry of events has blown open a dramatic rift in the
upper echelons of Armenia's oligarchic establishment.
Up until 2012, Tsarukyan's party was a member of the governing
coalition and considered to be close to the president. Whatever
differences existed between the two were considered to be mostly
cosmetic. Many even felt that PAP's leaving the coalition was a ploy
to divide the opposition, rather than an actual challenge to the
regime. As is often pointed out, the two sides even share family ties,
with one of Tsarukyan's daughters being married to Prime Minister
Hovik Abrahamyan's son.
So what happened to replace the oligarchic unity of the past with the
clearly deep fissures of today? Was the beating of a civic activist
enough to spark a war of words that has spilled over into open
confrontation?
Making sense of these developments requires us first to recognize
that, for businessmen of Tsarukyan's stature, the state represents a
major threat to their wealth. Unlike oligarchs in developed countries,
the elite in Armenia do not have a stable and functioning legal system
to defend their fortunes.
Making sense of these developments requires us first to recognize
that, for businessmen of Tsarukyan's stature, the state represents a
major threat to their wealth. Unlike oligarchs in developed countries,
the elite in Armenia do not have a stable and functioning legal system
to defend their fortunes. They must constantly find alternative ways
to maintain their privilege. This explains why so many feel the need
to directly hold political office, control media outlets, and assemble
their own private armies.
Having often gained their riches through dubious means themselves,
they are at all times susceptible to state reprisal should they raise
their head. Those who have dared challenge government policy in the
past, no matter what their status or wealth in society, have been
quickly retaliated against.
For example, during the 2008 presidential elections, opposition
candidate and former president Levon Ter-Petrosian openly tried to
court oligarchs such as Tsarukyan to his side, warning that they face
the constant risk of losing their fortunes under the current regime.
Indeed, tycoons such as Khachatur Sukiasyan who supported
Ter-Petrosyan were driven out of the country, having many of their
assets seized and handed over to pro-government businessmen. This
gloves-off response did not go unnoticed by the likes of Tsarukyan.
Even before that, the central concern of the super-rich in Armenia has
always been protecting themselves against threats to their wealth and
property. A 2003 study by the Armenia 2020 project, based on
interviews with13 leading oligarchs, concluded that "the state, its
machinery and institutions are perceived by the oligarchs as a
dangerous force, able at any moment to cause serious damage to their
business."
Former coalition partners, oligarch Gagik Tsarukyan and President
Serge Sarkisian, have gone from allies to adversaries over recent
weeks.
Tsarukyan and his party have made clear that their main concern is
changing this economic environment in the country. They have rallied
against higher taxes, seizure of companies through state power, rising
national debt, unfavorable investment conditions, and crisis in the
financial market. An often repeated phrase from Tsarukyan and other
PAP members is that the "people's patience has run out," that their
"cup has runneth over," and that is why he has entered the political
arena.
Developments over the past week have proven that the oligarchic class
is not a homogenous entity many once made it out to be. The tacit
ruling arrangements of the past have broken down. There are clearly
divergent interests at play, and opposing groupings taking shape.
Given the immense resources at his disposal, the challenge posed by
Tsarukyan to the Sarkisian regime is certainly a serious one.
Also backing Tsarukyan is the 2nd president of the country Robert
Kocharian who has been releasing specially tailored interviews on his
website, 2rd.am, criticizing Sarkisian's reign--especially his economic
policies--and calling for radical change. In his latest interview on
Jan. 23, he stated that the biggest obstacle to progress in the
country is "the conflict between the political elite's economic
interests and the long-term interests of the nation."
These adversarial shifts among Armenia's oligarchic class represent a
serious new struggle for power within the country--one that is
motivated first and foremost by defending wealth and privilege.
These adversarial shifts among Armenia's oligarchic class represent a
serious new struggle for power within the country--one that is
motivated first and foremost by defending wealth and privilege.
Contrary to rhetoric from both sides about democracy and the common
good, what we are seeing is the polarization of the ruling elite in
terms of those connected to the state apparatus and those threatened
by or opposed to it.
It is yet to be seen what will result from this increased friction in
the upper echelons of power. What we can be sure of is that there is a
new era of oligarchic competition taking shape that is likely to have
very significant ramifications for the future of the country's
development.