Armenia’s difficult reforms

Richard Giragosian, Regional Studies Center (Yerevan, Armenia)

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Reforms in Armenia continue, touching both foreign and domestic policies as well as economy. 

Domestic Policy

Former minister arrested in anti-corruption probe

After months of speculation and a perception that Armenian government’s anti-corruption drive was far too selective, one of the wealthiest officials of the old government, former Finance Minister Gagik Khachatrian, was arrested on August 27 and charged with multiple counts of corruption, illegal enrichment, misuse of funds and abuse of power. Khachatrian, who was also the former head of the country’s tax and customs service, was widely seen as one of the more egregious examples of state-related corruption. Investigators from the Special Investigative Service (SIS), which are conducting a parallel investigation along with the National Security Service (NSS), announced their recovery of some 800 million drams ($1.7 million) in “damage inflicted on the state” by Khachatrian. Simultaneously with the arrest, investigators also raided several homes owned by the former minister and his relatives and are expected to focus on his family’s extensive business interests, which include one of Armenia’s three mobile phone networks, a shopping mall, a car dealership and a luxury watch store in Yerevan, as well as real estate holding in the Georgian capital Tbilisi.

Government backs down from ratifying European treaty

Backing down earlier promises, newly-appointed 28-year old Justice Minister Rustam Badasian announced on August 26 that the Armenian government is unlikely to seek parliamentary ratification of the Istanbul Convention, a European treaty aimed to combat violence against women but strongly opposed by the Armenian Apostolic Church and other groups promoting so-called “traditional family values.” Armenia signed the treaty in 2011 but has yet to ratify it, and has seemingly backed down in the face of vocal opposition by conservative groups protesting the treaty’s definition of gender as “social roles, behaviors, activities and characteristics….appropriate for women and men,” although government officials vowed to seek passage early next year. 

Prime Minister elaborates ambitious “strategic goals”

In an emotional address in the capital of Nagorno Karabakh (Artsakh) on August 5, Armenian Prime Minister Nikol Pashinyan articulated an ambitious set of “strategic goals” for Armenia through 2050 that included the expansion of the Armenian population from 3 to 5 million, the end to poverty and the industrialization of the country, as well as an increase in GDP by more than fifteen times and expanded surges in spending on education, science and health care in order to create 1.5 million new jobs while providing employment for 2.5 million workers.


Premier vows to restart closed gold mine

After more than a year of protests by environmental activists that forced the closure of the Amulsar gold mine, Armenian Prime Minister Nikol Pashinyan announced on August 26  his government’s intention to allow the reopening of the mine after an environmental assessment found the potential risks from the mine to be well within “manageable” limits. The closure of the mine mine , operated by an international company Lydian International, in June 2018, has sparked serious concerns over the country’s investment climate.  The government also stated that the Armenian Ministry of Environment Protection did not break any laws or regulations when it formally allowed the company, Lydian International, to develop the Amulsar gold mine in 2016. Further defending the move, Deputy Economy Minister Avag Avanesian, noted that Lydian has invested $350 million in the mine and is expected to finance another $130 million, which will expand mine-related jobs from 550 to almost 3800. 

Armenia welcomes Ryanair

After the visit to Armenia by two senior executives of Ryanair on August 21, Armenian officials announced the entry of the low-cost carrier into the Armenian civil aviation market, noting the importance of offering a new cheaper alternative for tourism and transport. The agreement was hailed as a success for the efforts of Tatevik Revazian, the head of the Armenian government’s Civil Aviation Committee, and is expected to be followed by a similar contract with another Western low-cost airline, Wizz Air, who is ready to launch flights to Armenia next year.

Officials meet visiting IMF Chief

On August 20 Armenian Prime Minister Nikol Pashinian and other senior officials met with Jihad Azour, head of the IMF’s Middle East and Central Asia Department in Yerevan. The IMF official endorsed and approved the Armenian government’s macroeconomic policies and reform agenda. He added that the IMF continues its support for Armenia, as reflected in the May 2019 offer of a “precautionary” $248 million loan to Armenia aimed at “providing insurance against shocks” as a three-year “stand-by arrangement.” The IMF’s previous lending program for Armenia, worth roughly $115 million, was launched in 2014 and completed in 2017. 

Armenia creates new anti-corruption body

The Armenian government announced on July 2 the creation of a powerful new anti-corruption body empowered to prosecute state officials suspected of bribery, fraud and other corrupt practices. The move follows the completion of a related anti-corruption strategy and three-year plan of action which will also consolidate and streamline various state bodies and entities with overlapping responsibilities in fighting corruption.

Government moves to increase minimum wage

On June 27, Armenian Prime Minister Nikol Pashinian announced the plans to increase the minimum wage in the country by more than 23%, raising it from 55,000 drams ($115) to 68,000 drams ($142). Deputy Minister of Labor and Social Affairs Gemafin Gasparian noted that some 35,000 people working in the public sector and 45,000 others employed by private firms are paid 55,000 drams per month at present. 

Foreign Policy

Prime Minister announces “Major Changes” in foreign policy

In an announcement by Armenian Prime Minister Pashinian on August 27, Armenia vowed to institute more “major changes” in foreign policy in an address to an annual meeting of Armenian ambassadors and other senior diplomats.  He explained that “the most significant of those changes is that our traditional policy of balancing has been replaced with a policy of having our own clear position and consistently defending that position.” Foreign Minister Zohrab Mnatsakanian stressed that the Armenian revolution was “free from geopolitical orientations”, arguing that “Armenia did not take foreign policy steps changing the balance of global forces and it is set on basing its relations with all [foreign] actors on the principle of sovereignty.”