The Bear in the Room

The protests that gripped Armenia in late June and early July have mostly ended. The protesters that once crowded Yerevan’s central boulevards have gone back to their daily lives, but the effects of “Electric Yerevan,” as the protests came to be known, will reverberate in Armenia’s near to medium future. Many see the government’s willingness to suspend and then cancel the effective 17-22 percent utility rate hike that touched off the protests as a genuine, if qualified, victory. In this view, people power took on Armenia’s powerful, entrenched elites and won. But that perceived victory, while impressive, has only postponed a reckoning with the real issue behind the protests: Armenia’s relations with its ally and geopolitical overlord, Russia.

At first blush, the insistence by both protesters and government officials that Electric Yerevan had little or nothing in common with the “Euromaidan” events that toppled former Ukrainian President Viktor Yanukovich in 2014 makes sense. This was Armenia’s protest, after all, not Ukraine’s. And all too often Maidan comparisons in the West have turned out to be weak geopolitical analogies rather than cogent analyses. In Yerevan, most ordinary protesters appeared to be focused more on the sins of their domestic elite than on those of the distant Kremlin. Given their country’s lopsided economic dependence on Moscow, however, Armenians won’t be able to postpone confronting the Russia factor forever.

For those who took to the streets, the protests were first and foremost about economic fairness and fighting an entrenched and unaccountable elite. From this view, casting blame at Russia was seen as a strategic distraction. “The movement has been helped by the fact that [the problem of economic fairness] is quite narrow and specific,” says Karena Avedissian, a Caucasus researcher at the University of Southern California who has been on the ground since the protests began. “This has kept the protests coherent as well as indirectly highlighting much broader issues of governance and corruption.”

Yet the unspoken reality is that Armenia’s sclerotic autocracy and Russian domination are mutually reinforcing. Armenia’s problems did not occur in a vacuum; instead, its uncompetitive economy and illiberal political system are very much insulated and augmented by its subservience to Moscow. Russian interests own vast swaths of the “commanding heights” of the Armenian economy, which are heavily intertwined with Armenia’s cadres of oligarchs.

Inter RAO, the Russian state company that owns a majority of the Armenian electric distribution company ENA, is only the tip of the iceberg. In 2014, Russian state gas company Gazprom completed a takeover of the Armenian gas network. Even Armenia’s lone alternative energy artery, a gas pipeline from Iran, is in the process of being handed over to Gazprom (and de facto Russian state control). More broadly, Moscow holds all the cards when it comes to the Armenian economy — remittances, trade, and even arms imports are dominated by Russia. It’s no wonder that Armenia’s economy has also taken a serious hit from Russia’s recent economic slowdown.

Russia’s gradual monopolization of key sectors of the Armenian economy has occurred with the full knowledge and consent of the Armenian government. When Armenian President Serzh Sargsyan told audiences in Washington in 2013 that Yerevan was rejecting closer association with the European Union in favor of the Russia-led Eurasian Economic Union (EEU), he justified the shift with “pragmatism.” But this was only a small part of the story. Yes, Armenian cognac may register steadier sales in Moscow than Paris, but the suddenness of the Armenian U-turn was more widely understood as a function of intense Russian pressure.

“Russia does not want such a [fully accountable and independent Armenian government] in its neighborhood,” says Avedissian. She warns Russia may be willing to go to extreme lengths to ensure this doesn’t happen.

Moscow’s trump card is Armenia’s overweening geopolitical dependence on Russia. Not only does Russia dominate the economic balance sheet, it also exercises broad control over Armenia through their close security relationship. Russia, an Armenian treaty ally, is seen in Yerevan as the ultimate hedge in the event of renewed war with nearby Azerbaijan, whose territory remains occupied by Armenian forces.

The border with next-door neighbor Turkey, which has its own troubled history with Armenia and a mutual defense pact with Azerbaijan, is closed. This leaves landlocked Armenia with only pro-western Georgia to the north and international pariah Iran to the south, a situation that greatly complicates Yerevan’s access to the outside world. Amid such isolation, Russian patronage has become a pillar of Armenian foreign policy, though at the cost of Armenian sovereignty.

But there is growing evidence that Yerevan’s Russia alliance is just another vector of Russian control, rather than the product of Kremlin altruism. (One need merely consider Moscow’s own close ties and frequent arms deals with the Azeris, Armenia’s mortal enemies.) Instead, as it has done elsewhere, Moscow uses its patronage as a strategic cudgel to extract loyalty and regular economic and political concessions from Armenia. While the Armenian government bears considerable responsibility, maybe even the lion’s share, for the country’s dysfunction, the protesters’ omission of the Russia variable ignores a brutal political reality.

“Some people [in the protest movement] just aren’t connecting [their grievances] to Russia,” notes Katy Pearce, a professor at the University of Washington who studies information and communication in the post-Soviet space. Yet Russia does matter. Armenia’s comprehensive geopolitical subordination to the Russian sphere of influence means it has effectively ceded Moscow veto authority over wide areas of its foreign as well as domestic policymaking. Armenian policy, on the whole, must conform to the dictates crafted and rendered in Moscow.

According to Pearce, some of the protest leaders already recognize Russia’s malignant role. But the rest of the protesters and their supporters will have to confront this fact sooner rather than later. Armenians fighting for change will see their efforts wasted if they fail to take Russia’s dominating position — and its institutional unease towards liberalization among its clients — into account.

While its geopolitical constraints are real, Armenia is not a lost cause. The new possibility of a durable Iran nuclear deal could help transform Armenia from an international buffer state into a transit corridor for Iranian trade and hydrocarbons. This is doubly true if normalization protocols with Turkey, though currently moribund, can be revived. And while nearby Georgia is a regional leader in attracting Chinese attentions as part of its ambitious and well-financed New Silk Road strategy, Armenia could also take advantage of Beijing’s increasingly powerful interest in the South Caucasus.

Russia would likely oppose all of these new vectors of investment and influence, either overly or covertly. So would many of Armenia’s oligarchs, who have developed a symbiotic relationship with Moscow, and abhor the competition new entrants bring. But with effort and direction, Armenian civil society can play a role in broadening the country’s macroeconomic and strategic diversification through targeted pressure, smart campaigning, and better political mobilization. But none of this, of course, will happen overnight.

“Armenian liberals will have to take the long view,” offers Kevork Oskanian, a Research Fellow at the University of Birmingham. “If this movement is to go beyond mere protest, to provide a viable alternative, [protesters] will have to organize in addition to providing the liberal narrative that has been so sorely missing from Armenian politics for too long.”

The positive outcome of Electric Yerevan shows that civil society, though diffuse and often marginalized, has the capacity to bring Armenian elites to the bargaining table. This is an important precedent, and can serve as a starting point for future negotiations. Civil society is no panacea, and Armenia’s baron autocracy is a tough machine to break, but events this summer show that progress is possible. But only by recognizing the harm Russia’s corrosive patronage does to Armenia can activists propose strategies be put in place to dilute and undo it. As long as Armenian policies are censored and course-corrected in Moscow, the country will never truly be in the hands of its people.

Photo credit: KAREN MINASYAN/AFP/Getty Images