ARMENIAN SPEAKER SCORING MORE POINTS WITH TRADEMARK POPULISM
By Emil Danielyan

Eurasia Daily Monitor, DC
Jamestown Foundation
Oct 6 2005

Armenia’s ambitious parliament speaker, Artur Baghdasarian, has
solidified his positions this week by exploiting an issue that
touches a raw nerve in Armenian society and is a major ingredient of
his populist discourse. Baghdasarian, who is seen as one of President
Robert Kocharian’s potential successors, appears to have succeeded in
forcing the government to start compensating Armenian citizens whose
Soviet-era savings bank deposits were wiped out by hyperinflation of
the early 1990s.

Local commentators note the fact that he owes the tactical victory to
Kocharian. Some have even suggested that the 36-year-old politician
now stands a better chance in the unfolding tussle for the Armenian
presidency.

Armenia boasted one of the highest per-capita rates of bank
savings among the 15 Soviet republics. But what had for decades been
accumulated by the population effectively evaporated in the economic
chaos that followed the Soviet collapse. The depreciation of the bank
deposits made transition to the market economy particularly painful for
hundreds of thousands of Armenians. Many of them — especially elderly
people mired in poverty – remain embittered by the enormous loss.

And there has been no lack of politicians keen to capitalize on their
fury. Baghdasarian has been the most successful of them. Compensation
of the former deposit holders was a key campaign promise of his
Orinats Yerkir (Country of Law) party in the run-up to Armenia’s last
parliamentary election held in May 2003. The tactic proved highly
effective, with Orinats Yerkir now having the second-largest faction
in the National Assembly and three ministers in Prime Minister Andranik
Markarian’s cabinet.

That Orinats Yerkir’s vague promise is unrealistic became evident
early last year when the party introduced a bill that calls for an
equivalent of $83 million to be paid to the former deposit holders
within the next ten years. The sum pales in comparison with billions
of Soviet rubles that Armenians used to have on their bank accounts.

It was clear that the proposed compensation would be largely
symbolic. At the same time $83 million is a lot of money by current
Armenian standards and is comparable to the cash-strapped Armenian
government’s annual spending on social security or health care.

The government, backed by the International Monetary Fund and the
World Bank, was quick to point out that the Orinats Yerkir scheme
would therefore be a serious waste of scarce public resources. Not
surprisingly, Markarian’s Republican Party (HHK), the biggest
parliamentary force, blocked the Orinats Yerkir bill. Opposition
lawmakers added to Baghdasarian’s embarrassment last December when they
forced a high-profile parliament debate on the issue and challenged him
to honor his pledge. Kocharian had to give the speaker a face-saving
cop-out the next month, forming an ad hoc commission tasked with
looking into possibilities of deposit compensation.

The commission never made public any reports and was thought to have
buried the matter until an October 1 meeting between Kocharian and
leaders of Orinats Yerkir, the HHK, and the third party represented in
his government, the Armenian Revolutionary Federation. The meeting was
followed by the Orinats Yerkir bill’s inclusion on the parliamentary
agenda. Baghdasarian said on October 4 that the move was part of
a deal cut by Kocharian and his coalition allies. “I hope that the
political agreement will be honored by the Republican Party and other
political forces that joined this initiative,” he told reporters.

What that agreement specifically means is not clear, however. Some HHK
leaders have hinted that Baghdasarian’s bill will not even be debated
on the parliament floor. Markarian, for his part, announced on October
5 that his government’s draft budget for next year would earmark only
$2.2 million for compensating the poorest deposit holders. But even
this meager sum would allow Baghdasarian to claim that he has remained
true to his word. The Armenian speaker will also tell voters that his
efforts to achieve a more far-reaching solution were blocked by more
powerful government factions.

The key question here is why Kocharian decided to revive the issue
at this juncture. Some analysts say he is keen to woo impoverished
voters ahead of the November 27 referendum on his package of amendments
to the Armenian constitution. Others believe that Kocharian, who is
obliged to resign after completing his second term in office in 2008,
made it clear that he continues to view Baghdasarian as one of his
possible successors. Defense Minister Serge Sarkisian, Kocharian’s
most powerful lieutenant, has been regarded as the top candidate for
that role until now. But the Armenian press speculates periodically
that relations between the two Karabakh-born men are not as cordial
as is widely assumed. The Yerevan daily Haykakan Zhamanak suggested
that the “drastic change” in the Armenian president’s position on
the Soviet-era savings deposits was “not only in favor of Artur
Baghdasarian but also against Serge Sarkisian.”

For Kocharian, a good thing about the young speaker is that he is
arguably the most electable member of the ruling regime. (Sarkisian
is a far more divisive figure not least because of his grip on
lucrative sectors of the Armenian economy and involvement in vote
rigging.) Baghdasarian knows how to make the most of his strongest
weapon, populism, in a country where civic consciousness has
experienced a serious decline over the past decade. His party also
boasts the most effective grassroots structure, cannily targeting
specific groups of the population such as schoolteachers, doctors,
and even disabled persons. For many of them, it is tempting to ignore
the fact that Orinats Yerkir is an increasingly important component
of Armenia’s leadership.

(Aravot, October 6; Haykakan Zhamanak, October 5; RFE/RL Armenia
Report, October 3-4; Armenian Public Television, October 2)