Armenia’s deadlock: social problems will sweep the political system

The latest developments in Armenia are being commented from different points of view, but in most of the comments, the focus is on politics or geopolitics. It is not right to regard the April events in Yerevan as just one more link in the chain of post-Soviet revolutions. Armenia is a unique country and the nature of its public protest is also unique.

Most of the experts – even those specializing in post-Soviet processes – are focused on the aspects that are not so essential for this story. Without analyzing Armenia’s demography and social structure, one will hardly be able to understand what the Armenian protest is about.

Today Yerevan is one of the most attractive European capitals for tourists: there you can enjoy tasty food, hospitality, low prices and lots of beautiful sites. You would even love to live there for some time. Russians discovered Armenia long ago and are frequent guests in popular Yerevan restaurants.

As any capital, Yerevan is just a cover - but with certain peculiarities. It is the only million city in Armenia and the whole of the country works for its sake: it is a hive of activity, it consumes almost all Armenia can produce and offers jobs to people all over the country. It eats 8.6 out of each 10 kilograms of lamb produced in Armenia and nine out of each ten apples that grow in the country. It is also the best place for a wedding – no matter where in Armenia you live.

Centralization is typical of all post-Soviet republics, but in Armenia is it absolute. Armenia does not even have its own Batumi, an economic and business alternative to the capital. Its second biggest city is Gyumri, which has not yet overcome the consequences of the disastrous earthquake of 1988. It is not popular among tourists and is neglected by the Diaspora, unlike Nagorno-Karabakh.

Armenia is very much like an average Russian region with a million-strong center. The only difference is that it is all covered with mountains, is sandwiched between historical enemies and can connect its key geopolitical ally only by air.

Life in such a country is a priori hard, but there are bright spots as well: from Russia alone, Armenia gets almost $1.5bn a year in private transfers and is believed to get twice as much from the Diaspora. The greater part of this money goes into the consumer market as fuel for services. Cash inflow covers Armenia’s foreign trade deficit. The country imports twice as much as it exports.

One more bright spot is agricultural processing. Armenia is a big exporter of agricultural produce. In raw numbers, this is not much, but we are talking about a very small country, which, according to statistics, was Russia’s 51st biggest partner in 2016. The imports have amounted to $400mn and the core of them is food, first of all, alcohol (38%), canned food, dried fruit, etc.

For many decades, hyper-centralization, poverty in the regions and high emigration rate played into the hands of the local elite. The outflow of human resources from small Armenian towns to Yerevan and worldwide has turned the country into a political and economic bog. Poverty is not the only problem in Armenia: the government is influenced by criminals and shady businessmen and controls the police and the army. As a result, the regions have almost no people for protests.

Armenia is not very authoritarian, unlike some post-Soviet republics, such as Belarus, and is rough mostly before and after elections. For almost two decades, poor demography and high emigration prevented serious political crises in Armenia, but what is going on there now may well be a sign that the situation is changing. Today almost all active Armenians live in Yerevan. They want development and welfare, but the local market is too narrow for them. Foreign markets are stagnating, so, emigration is not a solution either. As a result, social problems are growing as a snowball and may one day sweep the political system. There are two ways-out of this situation: either to settle the Armenian-Azerbaijani conflict and to lift the blockade of Armenia or to build a new economic system. Both tasks are hard to implement and need both time and money. Besides, this concept requires a new approach.

The traditional one has exhausted itself. Until now economic and social stability in Armenia has been guaranteed mostly by emigration. But this scheme is not working any more. Or the funds of the Diaspora are no longer enough for the needs of developing Armenia. This deadlock may turn the country into one of the most politically unstable spots in the post-Soviet area.

Anton Krivenyuk, specially for EADaily