Armine Sahakyan: Armenian leaders need to launch economic reform — or the current protests could turn political

It looks like something out of a banana-republic novel, where a handful of corrupt, ruthless government officials and business people lord it over dirt-poor peasants.

And, in truth, the banana-republic model fits Armenia, except it does not have bananas.

We are one of the poorest countries in the former Soviet Union. So poor that much of our energy infrastructure is in Russia’s hands, and 1.5 million Armenians work abroad, mostly in Russia.

The average income in the country is $600 a month — but that is the average. Many of our 3.2 million people earn far less. In fact, 36 percent live below the poverty line.

And in today’s rapidly industrializing and urbanizing world, it is telling that 40 percent of Armenians work in agriculture.

The grinding poverty here, which is exacerbated by the fact that seven or eight oligarchs and their government-official facilitators control much of the wealth, is what led to the current grassroots protests against a planned 17-percent electricity-rate increase.

It has not helped the government’s cause that the Russians who own Armenia’s electric grid are flaunting their wealth in front of Armenians by living in luxury homes and driving “lux” vehicles.

Although Russia is paranoid that the demonstrations in Yerevan and other cities are a political uprising that could lead to the kind of color revolutions that surfaced in Georgia and Ukraine, in truth the demonstrations are an anti-poverty movement — for the moment, at least.

Most Armenians are tired of being poor, tired of having no middle class to aspire to, tired of the disparity between rich and poor, and tired of rampant government corruption, which siphons off revenue that could go to development.

The increase in the electricity rates would amount to just a few dollars a month, but those are dollars that many Armenians simply do not have.

The protest leaders have taken pains to say this movement is economic and not political. But implied in the movement is a demand for economic reform — and if our government fails to get started on these efforts, the current economic movement could turn into a political one.

Many Armenians felt our best hope for improving our lives was for the country to join the EU. Armenia was set to do that when Russian President Vladimir Putin summoned Armenian President Serzh Sargysan to Moscow in August of 2013 for a “chat.”

Within hours of that meeting, Sargysan announced that Armenia would join the Moscow-led Eurasian Economic Union instead.

Those hoping that the EU would give us a better life suffered a stinging sense of betrayal.

Russia already controls Armenia’s gas supply and electric system. Being in the EEU will increase our indentured servitude to Russia, many Armenians believe.

Sargysan has said the government will cover the higher electricity rates for the time being. But he has added that the increase will not be rescinded, that the public will have to swallow it soon.

His hard-nosed stance could well turn the current economic protests into the political ones that his administration and the Kremlin fear.

Instead of displaying a get-tough attitude with the public, Sargysan needs to see the current situation as an opportunity to transform the country and get the people in his corner.

However unlikely, he needs to begin working on a realistic and meaningful plan for economic reform, one that will even out the wealth in Armenia. This will require an underlying change in attitude: Corruption must no longer be tolerated, and there must be a commitment to the rule of law that his regime has failed to observe.

Kazakhstan could provide a model. It has made major strides toward economic equality, partly through steps to diversify its economy. It, too, has a rich-poor income gap, but it is nothing like Armenia’s.

For reform to have the best chance to succeed, Sargysan needs to achieve a public buy-in by having Armenians of all walks of life help him craft a reform blueprint.

If he fails to do that, the resentment that most Armenians feel about our poverty and the disparity between ourselves and the rich could boil over into a political movement.

The worst thing Sargysan could do, besides nothing, is fake an economic-reform effort.

All too often in the former Soviet Union, regimes talk the talk but do not walk the walk.

A phony reform effort could be the breaking point for our fed-up people.

If Sargysan institutes the economic reform Armenia needs, he could become a leader for all Armenians, not just a handful of cronies who are already wealthy and getting richer by the minute.

Armine Sahakyan is a human rights activist based in Armenia.