Amid a worsening public health crisis over the continued spread of the coronavirus, the Armenian government launched a domestic political drama, targeting the leader of the parliament’s second-largest opposition party and completing planned restructuring of the country’s Constitutional Court. While the move against the oligarch opposition figure was widely welcomed, the parliament’s legislative bid to reform the Court raised concerns over the rule of law and the stated goal of forging judicial independence.
Domestic Policy
Armenian Coronavirus Crisis Worsens
As of June 30, Armenia has reported 25,542 cases of the coronavirus and 443 deaths, making it the worst-affected country in the South Caucasus region. The situation has also prompted concern from the World Health Organization (WHO) over a “very significant” increase in coronavirus infections in Armenia. Despite the worsening situation, however, Prime Minister Pashinian has repeatedly vowed that his government has no plans to impose another lockdown and will continue to enforce social distancing and wearing face masks in public instead. Throughout the month, Armenia has received significant assistance, including the voluntary service of doctors and medical experts from France, Italy and Lithuania, and financial support from the European Union and the United States, as well as some less substantial aid from Russia and other countries.
Armenian Parliament Restructures the Constitutional Court
After nearly a year of simmering tension and sporadic confrontation between the Armenian government and the country’s Constitutional Court, on June 22 the parliament adopted legislation that would enforce term limits for the court’s nine judges. In a vote of 89-0, with two opposition parties defiantly boycotting the special session, the new legislation effectively removed three of the sitting judges, forced the parliament to select a new chairman to replace the current one, and will require another two justices to step down by 2022. Although the initiative represented a compromise alternative to the government’s previous plan to hold a national referendum on constitutional amendments in April, the process violated the existing law.
Armenian Opposition Oligarch Targeted
On the early morning of Sunday, June 14, Armenian security forces and investigators raided and searched the residence of Gagik Tsarukyan, the head of the opposition “Prosperous Armenia” Party, in the town of Arinj, north of Yerevan. Following the search of his palatial home, Tsarukyan, a sitting member of the Armenian parliament and one of the country’s wealthiest men, was then brought to the headquarters of the National Security Service (NSS) in central Yerevan for interrogation, as several hundred of his supporters gathered to demonstrate support of the party leader. By the evening, the police arrested about 100 of the demonstrators, largely for brazenly violating the country’s state of emergency that remains in effect due to the COVID-19 crisis.
The oligarch is the subject of three separate criminal investigations, consisting of two corruption cases and a third involving alleged electoral violations in the 2017 parliamentary election. After security forces sought to arrest Tsarukyan on the latter charges, a district court in Yerevan on June 21 refused the request for the pre-trial detention. Earlier, on June 5, Tsarukyan openly challenged Prime Minister Nikol Pashinyan and called for government’s resignation. The Armenian parliament voted on June 16 to remove his parliamentary immunity, however. Tsarukyan is the leader of the opposition the Prosperous Armenia party that holds 26 of the 132 seats in the parliament.
“The MP Gagik Tsarukyan is the subject of three separate criminal investigations, consisting of two corruption cases and a third involving alleged electoral violations in the 2017 parliamentary election”
Economic
Central Bank Assesses Economic Downturn from Coronavirus
In an announcement on June 30, the head of the Armenian Central Bank, Martin Galstian, reported that the Armenian economy is expected to contract by at least 4% in 2020 due to the negative impact of the coronavirus pandemic. That setback follows an impressive 7.6% growth rate in 2019. He did note, however, that the country is also expected to recover with an estimated increase in GDP of some 5.5% in 2021. Estimates from the Central Bank had previously forecast a contraction of 0.7 % this year. Analysts note that the worst-affected sectors of the economy are the services and construction sectors, as well as international tourism, while inflation is expected to remain at around 1.9% in 2020. Equally worrying was the report that revealed a severe decline in the amount of private remittances, projected to fall by between 22-25% in 2020, mainly due to spillover from the economic slump in Russia and as a result of Russian imposition of restrictions on migrant workers during the pandemic.
New Property Tax Adopted
After the passage of an earlier tax reform in 2019 that imposed a new “flat tax,” on June 24 the Armenian parliament adopted legislation to gradually phase in a complex progressive scale of property taxation over the next four years. Under the new annual property tax, the owners of small apartments worth an estimated $48,000 will be required to pay 18,000 drams (33 EUR). Meanwhile, owners of larger, more expensive properties would be liable for a much higher property tax, so that the property cost of 58 million drams will translate into 108,000 drams (200 EUR). For the highest end of real estate, pertaining to property worth 100 million drams or more, the new tax payment will be 326,000 drams (600 EUR).
Foreign Policy
Armenian and Azerbaijani Foreign Ministers Hold Online Talks
In a videoconference on June, 30 Armenian Foreign Minister Zohrab Mnatsakanian and his Azerbaijani counterpart, Elmar Mammadyarov, held the latest round of peace talks over the Nagorno Karabakh conflict. The foreign ministers were joined by the U.S., Russian and French mediating co-chairs of the OSCE Minsk Group. The video conference, which followed an earlier online discussion on April 21, included some heated exchanges, as Armenian Foreign Minister Mnatsakanian criticized yet another series of aggressive rhetoric from Azerbaijan, pointing to the statements from June 25 by Azerbaijani President Ilham Aliyev that attacked Armenia.
For his part, Mammadyarov countered that the recent “aggressive rhetoric” was a result of Armenia’s provocative actions taken in the occupied territories of Azerbaijan”, including what he defined as illegal “infrastructure changes” carried out there, in a reference to the planned reconstruction of road connecting Karabakh to Armenia. According to a clarification used by the Armenian Foreign Ministry, Mnatsakanian stressed the importance of ensuring Karabakh residents’ “free and safe movements” as an important element of Karabakh’s “comprehensive security”. Nevertheless, in the comments following the online discussion, the two sides “agreed to hold another joint video conference in July and to meet in person as soon as possible”. And adding tension of the June 30 talks, Armenian Prime Minister Pashinian criticized President Aliyev in unusually strong terms for his “maximalist” demands instead of reciprocating his repeated calls for an Armenian-Azerbaijani peace deal that would satisfy all parties to the conflict.
Photo: Prime Minister Nikol Pashinyan, after a meeting of the commandant’s office, held a briefing with the Minister of Health Arsen Torosyan.
Source: Official website of the Prime Minister of Armenia
