Wednesday, 21 May 2014

New Government Formed in Armenia

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By Haroutiun Khachatrian (05/21/2014 issue of the CACI Analyst)

In April-May, 2014, a new government was formed in Armenia and about half of the former ministers lost their posts. However, the principal targets of the new government, headed by the new Prime Minister Hovik Abrahamyan, seem identical to those of its predecessor. The ruling Republican Party of Armenia declared its ambition to remain the leading political force at least until 2025.

On April 3, 2014, Tigran Sargsyan, the 12th Prime Minister of post-Soviet Armenia, resigned after six years in office. According to the official statement, he resigned due to personal reasons but several observers believe that the true reason was the decision of the Armenian Constitutional Court, according to which many articles of the Law on cumulative pension system presented by Sargsyan’s government contradict Armenia’s Constitution. Meanwhile, President Serzh Sargsyan is greatly interested in introducing this system and the Court’s decision was made public one day before the PM’s resignation.

On April 13, Abrahamyan, the 56 year-old Chairman of the National Assembly and a member of the Republican Party, was appointed the new PM by a presidential decree. Whereas the previous PM is a well-educated economist – Sargsyan was the chairman of Armenia’s Central Bank for ten years – Abrahamyan is a political leader. His previous carrier includes posts such as city mayor and governor, and he was a minister of territorial governance and deputy PM in a previous government.

Although nothing was formally changed as Sargsyan, a vice-president of the ruling Republican Party, was replaced by another vice-president, Abrahamyan, the events will have political implications. Most prominently, the Orinats Yerkir (Country of Law) party, which has partnered with the Republican Party during the last six years, decided to leave the government. The official reason was that the candidacy of the party’s leader, Artur Baghdasaryan, was not even considered when choosing the new PM. Baghdasaryan who, in his own words, is a good friend of President Sargsyan, resigned as Secretary of Armenia’s National Security Council on April 25 and said he would likely take up a post as Board Chairman of the Collective Security Treaty Organization Academy.

All three ministers belonging to Orinats Yerkir, including the ministers of Agriculture, Sergo Karapetian, Emergency Situations, Armen Yeritsyan, and Urban Development, Samvel Tadevosyan, preferred to remain in the new government and were immediately excluded from the party. Whereas the former two became members of Abrahamyan’s government, Tadevosyan subsequently had to leave his ministerial seat.

Due to its prevalence in the National Assembly, the Republican Party was indifferent to the loss of its partner. It has formed the entire government of its own members or of non-partisans. Observers have expressed various opinions on why Orinats Yerkir decided to go into opposition, yet it was probably a strategic move ahead of the general elections in 2017.

Another political event occurring in parallel with the formation of a new government was President Sargsyan’s statement that he will not seek a third presidency, as he was certain that no person can lead Armenia more than twice. In his April 10 statement, Sargsyan also said, “I am the leader of the largest political force of the country, the Republican Party and it will continue … playing an important role … in the country”. In addition, the Republican Party spokesman Eduard Sharmazanov made a comment on April 30, indicating that although Sargsyan will no longer run for a top office, he will remain highly influential in Armenian politics since he is the leader of the strongest political party. The Republican Party expects this situation to continue at least until 2025. This is not unlikely, given the weakness of other parties.

The Republican Party suggested the head and spokesman of its parliamentary faction, Galust Sahakyan, to replace Abrahamyan as chairman of the National Assembly. Sahakyan, 66, will soon occupy this post. In accordance with the legislation, the formation of a new government under Abrahamyan was completed by May 3. Ten out of eighteen ministers working in former PM Sargsyan’s cabinet retained their posts, including Defense Minister Seiran Ohanyan and Minister of Foreign Affairs Edward Nalbandyan. New ministers appeared in the ministries of finance, economy, healthcare and some others. The most unexpected appointment was that of Gagik Khachatryan, the former head of the State Revenue Committee, to Minister of Finance. He thereby becomes the fifth person on that post since 2008, and his former Committee has been included into the ministry. Armen Muradyan, the head of a private hospital, became the Minister of Healthcare to replace Derenik Dumanyan, a recently appointed friend of President Sargsyan.

As indicated by President Sargsyan, the priorities of the new government include efforts to join the Customs Union, the introduction of a compulsory accumulative pension system, to continue educational reforms, and to improve the tax and customs duty systems, among others. The new PM Abrahamyan said he would work to complete the implementation of the cumulative pension system, which the former cabinet under PM Sargsyan failed to do – another indication of the urgency that President Sargsyan attaches to this reform. 

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