Special for the Armenian Weekly
Now that a new year is here, maybe we can resolve to spend some time thinking about what is happening in and to Armenia. We can recall the joy and the pride we felt when the second free and independent Republic of Armenia was declared in 1991 (please don’t equate the Bolshevik-dominated republic as our second republic). It was a moment that many thought would never come, but it did. Since then Armenia has been beset by many crises: The devastation of the Spitak earthquake that occurred in 1988 was coupled with the total collapse of an economy that eschewed proven economic principles in order to meet the political objectives of the Bolshevik’s new order. The liberation of historic Artsakh and the uneasy truce along the Line of Contact has created its own lingering set of problems, as has the presently moribund issue of the Turkish-Armenian protocols; looming large over all of this is Russia’s influence that has, for the moment, shifted our orientation from the West to closer ties with Moscow. These have been difficult years, but Armenia has not only survived, it has made some palpable gains. Unfortunately, there is always the however that has to be considered.
The however refers to the pernicious problems that plague Armenia. First is the high rate of unemployment and underemployment that is responsible for many families and most pensioners living below or close to the poverty level. Apologists will immediately point to the devastated economy (already mentioned) that Armenia inherited as the reason, or the shop-worn excuse that other countries have similar problems.
They do, but in large measure our problems stem from the institutionalized corruption within the country that has its roots in the chaotic conditions that accompanied our independence. Unfortunately, what has evolved is a symbiotic alliance of governing politicians and monopolists able to exploit the economy for their personal enrichment. Unemployment, poverty, and the absence of opportunity are written off as collateral damage as these Apex predators within society amass wealth and influence to the detriment of the nation and its citizens. Whatever legitimate economic gains the administration has made (and to its credit, gains have been made), it is the shameful disparity in the distribution of the wealth that is produced that keeps poverty at over 30 percent; encourages emigration; and allows unemployment and underemployment to exceed 20 percent. One might question how this disparity in the distribution of wealth relates to unemployment. Oligarchs or monopolists (or however you wish to identify them) are not necessarily driven to expand the economy, because the more expansive and diverse it becomes, the more difficult it is to manipulate. Consider that in the poorest of poor countries where unemployment and poverty are rampant, the Apex predator is still able to amass wealth well beyond his needs from economies that barely seem to function. It belies the adage that you cannot get blood from a stone.
Given this unhealthy concentration of power, Armenia is closer to an oligarchy in practice than the democracy that is defined by its constitution. A patina of social justice that can be burnished when necessary not only misleads us, but the great pride we have in our country encourages us to overlook the reality that is Armenia.
Our problems are not due to a lack of resources that can be developed; or to the absence of a pool of intelligent and ambitious workers who could be retrained if required; or to the lack of energetic and creative entrepreneurs within and outside Armenia who would enter the marketplace to provide a range of goods and services that would increase employment and provide much needed competition.
Rather, it is the powerful alliance of politicians and oligarchs that controls the marketplace by determining who can participate; the goods and services that may be offered; as well as the prices that consumers must pay. And in subtle and blatantly obvious ways, they are able to profit from the various public and private projects at the national, district, and local levels. The end result is an ever-widening gap in the distribution of the wealth produced (wealth includes wages/salaries, access to medical delivery systems, education, leisure time, housing, opportunity for self-improvement, etc.) to the detriment of the worker and his family. As long as Armenia’s small economy (its present Gross Domestic Product, or GDP, is estimated at $10-$11 billion) can be manipulated by those who have acquired wealth, power, and influence, the quality of life for the majority of the people will not dramatically improve.
For a country supposedly suffering from a battered economy that has resulted in high rates of unemployment and poverty, a recent study (Illicit Financial Flows from Developing Countries: 2002-2011, D. Kar and B. LeBlanc, Global Financial Integrity, December 2013) determined that Armenia had an illicit outflow of $6.2 billion during the 10-year study period. Illicit outflows are defined as “…all unrecorded private financial outflows involving capital that is illegally earned, transferred, or utilized, generally by residents to accumulate foreign assets.” The annual outflow during the years 2008, 2010, and 2011 exceeded $1 billion annually. This is about 10 percent of Armenia’s estimated GDP.
The second problem is the lack of opportunity available for our educated and talented young men and women just starting out in life. Rather than the administration coming up with creative policies to underwrite opportunities for them to spread their wings (and be able to contribute to the nation’s development), the system essentially ignores them. These are the men and women who, in the normal course of events, would be the foundation upon which our country’s future is built. Having few to no options, many are literally forced to emigrate to other lands where their talent, professional skills, and creativity allow them to flourish. What a waste of human talent for Armenia. Yet, there appears to be no urgency on the part of opposition leaders or the majority of the hard-pressed citizens to confront an oligarchy that weakens the country and is destroying their future.
The third problem is the continuing annual decrease in Armenia’s total population. In 1991, the population of Armenia was estimated at about 3.5 million. Assuming a closed population (no immigration or emigration) and a slightly above replacement level fertility rate, the population of Armenia in January 2014 should have been no less than 3.6 million (a very conservative estimate), rather than the present estimated population of 2.8 to 3 million. This represents a decrease of from 600,000 to 800,000 people. How many of that number have permanently relocated is debatable. Without a significant increase in the birth rate and immigration, the population will likely continue to contract. And as the population decreases with more and more young people and families emigrating, the population will get older as the average age of those remaining increases.
How will the needs of this expanding number of elderly people be met? As it is, most pensioners presently live below or close to the poverty level. A decreasing population has a wide range of serious implications for the country’s future, such as family formation; birth rates; the size of the work force; ratio of retirees to workers; revenue collections; budget appropriations; the number of males available for future military service; the loss of potential leaders in all aspects of service to the nation; and the political status of the country within the South Caucasus.
The approximately $2 billion that is remitted annually by Armenians working “overseas” (outside the country) keeps the economy afloat. However, for families separated for extended periods of time from the husband or father, there are serious emotional and psychological downsides. For Armenia, exporting workers is a stopgap necessity brought about by a combination of government policies and corruption. Unlike such countries as Egypt, Jordan, and Pakistan, to name only a few, where serious population and resource imbalances exist, exporting workers is an absolute necessity.
President Serge Sarkisian will complete his second term in 2018. Armenia must endure four more years of the same failed policies. Four more years of corruption. And four more years of favors to be dispensed. In what condition will our country be at the end of his final term? Of greater concern is the fact that his hand-picked candidate in the 2018 presidential election will be elected, one way or another, to serve until 2023. Why? Simply because it is highly unlikely that a strong, energetic coalition candidate will oppose Sarkisian’s alter ego in the 2018 presidential election, given the inability of the political parties to put the welfare of the nation ahead of their petty interests and jalousies.
No change means that Armenia’s future hangs precariously in the balance, along with the hopes and aspirations that fall under the rubric of Hai Tahd. The continuation of a Sarkisian-dominated administration beyond 2018 to 2023 should be cause for concern. Although some of the Apex predators may change (even they have to age or may opt to retire in comfort), the policies, corruption, and favoritism will continue. Is there another likely scenario to consider?
Obviously there are individuals and families who have no reason to seek change. They are fortunate that life in Armenia does not present the hardships experienced by those living below or close to the poverty level—those who are unemployed or underemployed, forced to emigrate in search of a better life, or have a husband or father seeking employment outside the country to provide for his family. If the leaders of the opposition parties and the majority of the electorate who have legitimate reasons to seek change are unable or unwilling to confront the issue in 2014, will it be any easier in 2018? And if the oligarchy continues to 2023, what then?