Serouj Aprahamian
Civic activist Artak Khachatryan was kidnapped
by three masked men in front of a shopping center in Yerevan, on Sat.,
Feb. 7. Hours later, he was found unconscious on the side of a street
near his home.
Khachatryan has played a leading role in protests against the government’s controversial Turnover 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 crack down on the
opposition tycoon.
In turn, Tsarukyan responded
the next day calling for snap elections and the organization of
rallies, marches, protests and civil disobedience aiming 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 was considered to be close to the president. Whatever
differences existed between the two were considered mostly cosmetic.
Many even saw a ploy to divide the opposition in PAP’s departure
from the coalition, 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 why has the oligarchic unity of the past been replaced 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. 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 with 13 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.”
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 homogeneous 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. 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
significant ramifications for the country’s development.
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