One of Armenia’s most colourful public figures has
returned to politics in time for parliamentary elections. What does the
oligarch Gagik Tsarukyan stand for – apart from himself?
He’s one of the richest men in Armenia, and isn’t shy about flaunting it with his gaudy mansions and a gold-plated phone. As a US State Department cable, made available by Wikileaks, quipped, he “has a personal style which would make Donald Trump look like an ascetic.”
He
is Gagik Tsarukyan. After more than two decades of incumbent victories
and associated claims of fraud and protests, for many Armenians,
Tsarukyan is the “change” candidate in parliamentary elections on 2
April, and his party is currently leading in polls.
Tsarukyan
is running on the universal populist promises of jobs, lower taxes and
patriotism — none of the high-brow ideological rhetoric. Tsarukyan
speaks in short, simple bursts, often referring to himself in the third
person. His trademark wear is white suits with bright-coloured
turtlenecks, as favoured by the post-Soviet gangsters of the 1990s. He
also has a natural charisma that many people can connect with.
“I am from a working family,” Tsarukyan, who has a passing resemblance to the late Venezuelan leader Hugo Chavez, reminded everyone at a recent campaign rally, where he basked in public affection. “I am no Harvard graduate. My life has been my university. I can’t stand lies. I am for justice.”
Tsarukyan’s
popular appeal seems odd in a country where powers that be — the
government and business elite — are typically loathed. While Tsarukyan’s
popularity is real, is he in fact an alternative to Serzh Sargsyan’s
Republican Party? Or is Tsarukyan’s campaign a charade intended to
shield the elite’s vested interests?
The university of hard knocks
Now
60 years old and long a household name in Armenia, Tsarukyan was
already a prominent businessman when he was first elected to parliament
in 2003. Although the family business was named the “Armenia” Closed
Joint Stock Company, its beginnings were humble. Living, as they still
do, in Arinj, a community of about 6,000 residents between Yerevan and
nearby town of Abovyan, the Tsarukyan family have run several small
businesses since the 1980s, growing flowers, producing dairy products
and clothing.
In 1989, Gagik Tsarukyan is said to have received a
college degree from the Yerevan Sports Institute. It is unclear if he
attended classes or just bought the diploma, what is certain is that he
was already 33 years old and a competitive arm-wrestler. Around that
time, Tsarukyan married a local girl, Javahir, and they now have four
daughters and two sons. Tsarukyan’s official biography makes no mention
of what he was up to between finishing high school and starting a family
– a full decade later.
One persistent claim
is that while working as a traffic cop back in Soviet days, Tsarukyan
was charged with a serious crime and did time in a prison for former
law-enforcement personnel in Nizhny Tagil, Russia. Tsarukyan is said to
have earned an early release and later had his criminal record expunged
by the Supreme Court of already independent Armenia. Armenian media
claimed that the authorities have used this past conviction to blackmail Tsarukyan, forcing him to moderate his anti-government rhetoric and stay out of the 2013 presidential elections.
A finger in every pie
By
the mid-1990s, as Armenia’s economy was in virtual free fall, the
Tsarukyans launched the first commercially successful Armenian beer
brand, Kotayk, having bought a production line from France’s Castel
Group. With those initial profits, they began to buy up state assets
slated for privatisation, anything from furniture to pharmaceuticals.
But
the real turning point came in 1998, after Robert Kocharyan’s election
to the presidency in Armenia. Since that year, Tsarukyan began picking
up key state contracts, such as servicing the national airline and the
military, and a greater slice of key business deals including sales of
gasoline and natural gas. It likely helped that Tsarukyan was friends
and business partners with Kocharyan’s brother Valery, who, after
becoming disabled during the Karabakh war lived in Balahovit, a
community near Arinj. Valery died in a hang-gliding accident in 1999,
but his daughter Irina continued to work for Tsarukyan’s businesses.
As the Armenian economy recovered throughout the 2000s, Tsarukyan was one of the main beneficiaries. His holding (now known as Multi Group)
bought the Ararat cement plant, the Ararat brandy plant (not to be
confused with the Pernod Ricard-owned plant that produces Armenia’s
famous Ararat brandy), and built hotels and casinos. Since Tsarukyan
gifted shares in some of these businesses to relatives of Kocharyan and
president-to-be Serzh Sargsyan, they were unhindered by tax inspections.
Tsarukyan also expanded beyond Armenia, investing in Bulgaria and
Belarus (he’s a good friend of Aleksandr Lukashenka), and selling his construction products as far as the United States.
He
also established family ties to key figures in Armenia’s business and
political elite. One of his daughters married the son of Hovik
Abrahamyan, one of Armenia’s most powerful officials of the last decade
and a half. (Earlier this year, Abrahamyan left the ruling Republican
Party and his son is running on Tsarukyan’s ticket.) Another daughter
married the son of Andranik Manukyan, one-time leading car importer,
transportation minister and in recent years Armenia’s ambassador to
Ukraine.
But Tsarukyan also occasionally exhibited an independent
streak. In 2008, he refused to buy a mineral water plant that the
government stripped from Khachatur Sukiasyan, the richest Armenian
businessman of the 1990s. Officials cited unpaid taxes in what was a
clear case of retribution for Sukiasyan’s support of ex-president Levon
Ter-Petrossian’s election campaign. Tsarukyan made clear at the time
that he would not be raiding the assets of a fellow oligarch while he
was down.
Spreading the wealth
Tsarukyan began to spend
generously on charitable projects well before others from Armenia’s
newly rich oligarchic class. He began local, renovating the Arinj school he attended, paying tuition for Abovyan area students and for medical procedures for those who could not afford them.
Amid the embarrassment of the
2004 Summer Olympics, when Armenia failed to win any medals, Tsarukyan
became the head of the National Olympic Committee and its chief sponsor.
Soon, the country’s traditionally strong wrestlers and weightlifters
began to win medals again, and Tsarukyan was there to share the national
limelight. Adding to publicity were media companies controlled or funded by Tsarukyan, including Kentron TV and Aravot daily.
Armenian media soon noted that Tsarukyan’s businesses were systematically underpaying taxes. When confronted, Tsarukyan’s mum Rosa retorted:
“If we can [avoid paying taxes], more power to us. Why should we pay
taxes to [government officials], who’ll just waste the money at
casinos?”
The untaxed income pouring into
charity soon began to pay off, when Tsarukyan launched his own political
party, Prosperous Armenia. He won about 15% of the vote in the 2007
elections and about 30% in 2012. The party was seen as a political
vehicle for Kocharyan and many observers pointed out that its success
was thanks to outright electoral bribes. Tsarukyan remains faithful to
his electoral strategies. Campaigning in one Armenian province last
week, he was approached by dozens of potential voters seeking financial
assistance, and promised to help them all.
Between 2007 and 2012,
Prosperous Armenia was part of the Republican-led coalition, but as
Kocharyan’s relations with Sargsyan soured, Tsarukyan refused to
re-enter the coalition after the 2012 election. Seating out the 2013
presidential vote, Tsarukyan announced plans to oust Sargsyan through
street rallies. In early 2015, he abruptly cancelled the campaign after
Sargsyan launched very personal verbal attacks against him. Mediation
from influential Russian-Armenian businessmen, including billionaire
Samvel Karapetyan, reportedly helped put an end to the confrontation.
Nostalgia for the “daddy state”
Through
all this Tsarukyan remained the single most popular political figure in
Armenia, as polls consistently confirmed. This strength has been
recognized by other political groups. In recent years, leading
opposition candidates in the last three presidential elections — Raffi
Hovannisian, Levon Ter-Petrosyan and Stepan Demirchyan — have all sought
alliances with Tsarukyan.
Arman Musinyan, a spokesman for
Ter-Petrosyan’s party, declined to discuss Tsarukyan when reached for
comment. Vahe Enfiajyan, a member of parliament from Tsarukyan’s party,
also declined to respond to questions for this article.
Tsarukyan’s
appeal reflects a public thirst not for democracy and rule of law, but
for a caring “daddy state” and charismatic leader that Armenia has
lacked since independence
What is clear is that Tsarukyan’s
popular appeal reflects the public’s thirst not for democracy and rule
of law, but for a caring, paternalistic “daddy state” and “one of us”
charismatic leadership that has been absent in Armenia since
independence. While Russia has its Vladimir Putin, Turkey – Recep Tayyip
Erdoğan, Azerbaijan – the Aliyev dynasty, and now Georgia – Bidzina Ivanishvili, none of the three presidents of Armenia have projected a similar mix of authority or enjoyed similar levels of public support.
Beginning with the Soviet Armenian
leader Karen Demirchyan in 1998, the disaffected segments of the
Armenian public repeatedly turned to past strongmen to run against
unpopular incumbents. Tsarukyan is the latest, and perhaps the most
extreme example of a substantial part of the public disappointed in the
political process and seeking to install a Tsar who is powerful and
fair, rather than an accountable elected leader. (In Armenian “Tsaruk”
means a little tree rather anything to do with royalty, as in the
Russian.)
What is also clear, however, is that Tsarukyan’s appeal
has its limits and that he is viewed as an embarrassment by more
educated Armenians. In preparation for the elections, president Sargsyan
moved to rebrand his Republican Party, bringing in a popular former
Yerevan mayor Karen Karapetyan as prime minister and appointing his
long-time chief of staff Vigen Sargsyan (not related) to the key post of
defense minister. These moves have given the ruling party some boost
ahead of April elections.
Towards a two-party system?
Seven
other parties and blocs are running in this election. The
journalist-turned-politician Nikol Pashinyan has been a popular
opposition figure and his bloc is third in pre-election polls. There is
the bloc built around former defense minister Seyran Ohanyan that
includes Raffi Hovannisyan and another former foreign minister Vartan
Oskanian, as well as the recently jailed
former Karabakh army commander Samvel Babayan; the bloc is widely seen
as enjoying the backing of ex-president Robert Kocharyan. Then there are
the mainstay “junior coalition partners” of the Republicans, the
Armenian Revolutionary Federation – Dashnaktsutyun and the former
Country of Law party, renamed Armenian Revival.
But none appear
to have the resources to compete with the Republicans and Tsarukyan and
will struggle to cross the minimum thresholds to enter parliament, set
at five percent for individual parties and at seven percent for blocs.
Armenia’s
political tradition calls for the main runner-up in elections to
denounce them as fraudulent. That’ll be the real test for whether
Tsarukyan is really opposed to the ruling Republican Party
Under
the new electoral rules, if a majority coalition is not formed, a second
round of voting would be called between the two top parties. This
diminishes the ability of smaller parties to play kingmaker.
Armenia’s
political tradition calls for the main runner-up in elections to
denounce them as fraudulent (there is usually just enough evidence for
that) and call for street rallies to oust the “illegitimate government”.
That is likely to serve as the main test for whether Tsarukyan is
really opposed to the Republicans and so far it is unclear if he would
follow that path.
Emil Danielyan, a veteran Yerevan-based analyst
of Armenian politics, believes that Tsarukyan has a tacit understanding
with Sargsyan and may return into the government after the election or
play the role of “constructive opposition” as in past years. Indeed, in
recent days, Tsarukyan has hinted that a new coalition with Sargsyan would be possible under certain conditions.
“It's
so obvious. Tsarukyan is very vulnerable to government pressure because
of his businesses paying insignificant amounts of taxes,” Danielyan
tells me. “He was easily forced into submission two years ago, and
Sargsyan could have kept him out of the current race just as easily.”
But Tsarukyan’s successful electoral performance may yet challenge this analysis. Armenians will then see who he stands for.
opendemocracy.net, March 28, 2017
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