Special for the Armenian Weekly
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.
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.
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.
խճամ երկիր հայերի
զի իշխան քո աւազակ են
եւ թագաւոր նախագահ քո
When the security of Armenia is constantly threatened, political forces in Armenia should work together for Democratic values, Human Rights, Justice and the real good for the people of Armenia. Also, in the coming days of the 100th anniversary of the Armenian Genocide, all political forces in Armenia should show unity in order to strongly fight against genocide denial.
Thank you Serouj:
I found your article very informative. It raises the level of information quality on the AW. Aprees!
An excellent article… helps us begin to make sense of the volatile situation now upon us.
At the same time, a few suggestions for the author and other investigators:
– What is it, exactly, that is controversial about the Turnover Tax and its approach to small- and medium-business activity? And why have different parties taken different positions on this controversial measure?
– Why is PAP (Tsarukian) taking such a ‘democratic’ position on business reform? Is he simply saying, “I’ve got all that i need to dominate the system. So let’s legalize and stabilize everything,” thus consolidating his advantages? If so, it is reminiscent of the Carnegies and Rockefellers who, after amassing their billions, became ‘industrial statesmen’ who sought to ‘reform’ the capitalist system, essentially closing the door on would-be competitors to their primacy.
Both of these issues are worth digging into. I hope someone does.
The declaration of war between President Serzh Sargsyan and the head of the strongest criminal organization, Gagig Tsarukyan (Dodi Gago) has nothing to do with concern for the people of Armenia, democracy, or for that matter the wellbeing of the country. In the last 20 years, these same two thugs were closely associated in robbing and sucking the blood of the Armenian people to enrich themselves. As a result, they have amassed billions of dollars in stolen wealth which has also provided an extremely comfortable lifestyle to their family and friends while the people live in abject poverty and despair. The core reason of their fight is aggrandization (to increase one’s power status or wealth.) Now that they have robed the country to its last penny and there is nothing left to steal, they are now skirmishing with each other to find a way to justify how to rob from each other. As the common saying goes, “Thieves never fight with each other when they rob or loot, but they only fight when the time comes to divide the booty.” As is often the case with law enforcers, when two thugs fight, the police stay on the sideline and watch the thieves kill each other. This is what the Armenian people or the political parties have to do. Let these two thugs score their differences alone without outside interference. In the end, the winner will take it all and rule the country for some times to come. However in the end, the winner’s demise will also come as justice will eventually prevail in Armenia. Out of this ugly and dirty war, Armenians will be able to elect decent leaders who will care and work for the betterment of its people. Finally, Armenia will emerge as a free and democratic country, something it has been denied since independence. This is the best gift Armenia can receive on the year of our genocide centennial.
PS: Has anyone seen the grotesque house of Dodi Gago in Yerevan? It looks like a primitive and ugly palace built sometime during the Roman Empire. The gated dwelling which was built with looted money from the poor has live size statues within the ugly distasteful edifice as to be able to protect the residents from outside intruders.
Without democratic state institutions, there is no end to this thievery among the thieves. This is the primary reason why we’re always inclined to associate with Mother Russia. They’re history of corruption and tyranny suites us well. Western European ideals and principles are too foreign for our taste. Our behavior is a hallmark of a third rate country,
Is the present Russian way of governing their country so wonderful that Armenia’s government feels compelled to imitate it?
Thanks Seoj, we hear you dear, keep us informed and in the meantime be careful if ypu’re there availabale to be beaten up by the Oligarchs.
That picture of Artak Khachatryan, is becoming a rather common site nowadays within the Republic of Armenia. President Sargsyan’s Republican Party ruling regime has reached the point now where they have very little tolerance for those particular political activists who oppose their regime. As a result, this regime subjects these people to threats as well as abductions and physical beatings. How much longer will President Sargsyan’s mafia-style regime continue to get away with abusing the citizens of Armenia of whom he represents in absolutely no particular way? It’s only the citizens of Armenia who can solve this horrible problem by coming together in one firmly united group to forcefully remove President Sargsyan and his harmful regime from power, and to finally install a pro-Armenian government who will be devoted to the citizens of Armenia. Otherwise, it’ll be the same old situation it’s been for the past 23 years, with the population of Armenia declining further and further as a result of so many Armenians emigrating out of it on a yearly basis. All of this is crippling the Republic of Armenia; and in the process, it’s making its future less and less promising.
I am very sorry for Sarkian because of his non-presidential speech.
An average Armenian no matter of his education or political orientation would agree with me. The future of Armenia is very dark. Unfortunately, we are going to see another March 1st! The analysis of Article is missing very important point. That Armenian elites has not reach to the point of civilization that it can have democratic system of government.
Excellent article. Also deserving discussion is the issue of constitutional reforms Serge Sarkisian wants to introduce and which the opposition parties contest. The changes in the constitution could create an all-powerful party, consolidate Serge Sarkisian’s hold on power, and bring about a totalitarian regime.
Thanks Garbis Koraijan – I’m in no position to judge, but Mr Tsarukyan has thug written all over him and TSAR is the root of his name – at least Serge Sarksian has the qualities of a statesman. I liked his eloquent letter to Erdogan in which he addresses the Turkish invitation to Gallipoli on April 24th. The thing about these guys is that even though they walk in the valley of the shadow of Death, they fear no evil because they are the biggest bastards in the valley. AND i quote John Lennon when I say, “you have to be a bastard … to succeed.
Very informative article Serouj. What I don’t understand is why Dodi gago is pissed? Does he see the President beginning to come after his wealth? And you wrote that there is no stable laws in place that Dodi Gago can depend on to defend his wealth, I assume you’re not referring to progressive tax system that would hurt Dodi gago but help the vast majority of Armenia? So right now to me it looks like these oligarchs are in a rotating wheel where one goes out of government and the next one comes in. Will there ever be an Armenia where there is a legitimate tax system and protections against gangster exploitation of small and medium sized businesses? How can Armenia survive? I can’t see a light at the end of this tunnel and that is really devastating.
“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.”
Armenia can’t afford behavior like this.
All these political oligarchy phenomenon will be gone by the end of next decade, and most of them will be gone to foreign countries for some special beezeenesses. All I hope, newer brighter young Armenians will take over the country and lead Armenians, for a better life. Armenia deserved to be the jewel of Eurasia in the future!