A new era of governance for Armenia's development?

YEREVAN, Armenia — It's quiet in Republic Square, the heart of Armenia's capital city. The loudest sound is the splashing of the fountain in front of the grand History Museum, where families are taking photos and taxi drivers are waiting for passengers in the beating sun.

Not long ago, this square was filled with protesters blocking streets and waving flags. They had been peacefully but persistently demanding the resignation of Prime Minister Serzh Sargsyan, who had previously been president since 2008 and had overseen an amendment to the constitution that would support his continuation of leadership. Tensions were high: Protests in Armenia in the past have turned violent. But three months ago on April 23, after days of demonstrations, Sargsyan announced his resignation — taking even the protesters by surprise.

“It was astonishing. Nobody could believe this was happening,” said Dmitri Mariassin, deputy representative of the United Nations Development Programme in Armenia. “All of us in international relations, the embassies [and so on], we all have our risk logs; we plan for different contingencies. This [outcome] was in nobody's risk log.”

Theories vary as to why the so-called “velvet revolution” was able to happen peacefully, on both sides. The date is significant, falling a day before the country's genocide remembrance on April 24, putting the use of violence off limits. Some suggest it was the particular formation of the protests that did it: Vast, dispersed, and difficult to contain, with many people bringing children, alongside a strong rhetoric of peaceful resistance from the opposition leader — now prime minister — Nikol Pashinyan.

Others wondered if it was a strategic play on the part of Sargsyan and his allies, leaving the door open for a potential comeback if the new government disappoints.

The question now for many civil society and international development organizations is how to ensure that disappointment doesn't come: That the change of power translates into a more effective, more accountable, and more transparent governance to support the next stage of Armenia’s development.

“It's the most important question. What happened here in April is a direct consequence of the fact that there has not been responsive governance in Armenia for pretty much forever,” said Salpi Ghazarian, director of the Institute of Armenian Studies at the University of Southern California, speaking to Devex on the sidelines of the Aurora Humanitarian Initiative’s conference in Yerevan last month.

“We have not had the experience of good governance, so the idea of a functioning electoral process, the idea of civic consciousness, even of a civic identity, all of those are challenges,” she said.

Although elections have been held since Armenian independence from the Soviet Union in 1991, the public has not always engaged with them as a credible way of achieving change — Sargsyan’s party had ruled for almost two decades. And while the opposition came to power espousing an ambitious vision focused on rule of law, democratic governance, and a crackdown on corruption, it will have to manage that transition at the same time as tackling many other challenges. These range from the Nagorno-Karabakh conflict on the border with Azerbaijan to an unemployment rate that has hovered stubbornly around 18 percent for the past decade.

The key question is whether what is happening is “a change of names or a change of systems,” said Ruben Vardanyan, a Russian-Armenian businessman and co-founder of the IDeA Foundation, which promotes social entrepreneurship and sustainable economic development in Armenia. “A change of systems is [about], what kind of Armenia are we building? ... What will be the future of Armenia [as a] small country with no big natural resources?”

The situation has improved dramatically since the first years of independence, when Armenia was suffering the effects of economic collapse and a catastrophic earthquake. Four-fifths of its population survived on humanitarian aid at that time, according to the World Bank. A quarter of a century on, and the bank this month announced Armenia’s reclassification as an upper-middle income country — but almost a third of the population still lives below the national poverty line.

Improving governance will be central to supporting the next stage of its development, experts argue — from reforming the education system, to tackling inequality and access to opportunities for all, to creating a better business environment. Many young Armenians, feeling isolated from economic and political participation at home, have left to pursue opportunities abroad. A new era of governance raises the possibility of reversing that brain drain.

“On one hand, there is a lot of optimism… A lot of readiness for change,” said Vardanyan, also a co-founder of the Aurora Prize. “On the other hand, there are a lot of challenges [emerging] every day, and people see more and more problems which need to be solved.”

There are many elements that will need to fall into place, experts told Devex.

Part of it involves taking advantage of the latent talent within Armenia’s population, both outside the country — the participation, investment, and guidance of its extensive diaspora could offer an innovative model for development, Vardanyan argued — and within it. Since the collapse of the Soviet Union, Western and diaspora-funded organizations have offered education and development opportunities to Armenian youth through scholarships, exchanges, and training programs, for example. But with a government dominated by old institutions, the effect of that has so far been hard to discern.

As a new generation of leaders, policymakers and advisers enters the political space, “this is when we’re going to know if all of that works,” said Ghazarian; now is the time to bring “out of the woods the capacity that is there in some way, that has never been tapped.”

While the process must be led by Armenian citizens, now is not the moment for international organizations to back away, she suggested. It is a concern for many that the new political leaders are unprepared, having found themselves in government so unexpectedly, and the support of more experienced groups will be invaluable.

“From the most basic thing ... from [local] urban management issues, all the way up to the top, I hope that [international organizations] will find ways to program initiative taking, rather than waiting for a government that doesn’t have the experience yet to ask the questions that an experienced government would ask,” she said.

The European Union had already signed a new partnership agreement with Armenia in late 2017 — considered a significant step by many European observers, since the previous attempt to do so in 2013 had been thrown off course by relations with Russia. The agreement, which was ratified in April shortly before the new government moved into its offices, aims to encourage domestic reforms, including strengthening institutions, good governance, and economic and private sector development, as well as addressing connectivity, the environment, and climate action through support and other incentives.

UNDP has focused on the key issue of civic engagement, repeatedly raised as a priority by observers. The agency has long been working on programs such as empowering women to run for election and encouraging youth engagement at the local level, all of which it is now hoping to scale up, alongside a focus on youth entrepreneurship and startup development.

Until recently, “the appetite of both government and donors for this kind of civic engagement work was limited …  but now it’s really growing and we see huge opportunity,” said Mariassin.

The agency is also hoping to launch an “open parliament” program — similar to programs the UNDP runs in Moldova and Georgia — focused on creating institutional mechanisms for parliamentary engagement with the media and civil society. That will happen after fresh elections to form a new parliament, which Pashinyan promised to hold within a year of entering office and which are currently slated for around April 2019.

The change of power has already created a new relationship between government and civil society, with much more crossover between the two, many observers noted. But that has left those in civil society grappling with the question of, “how do you monitor, oversee, critique people who were your friends and colleagues just last month [and are now in government]?” according to Ghazarian, adding that the media will need support to develop its ability to hold a media-savvy administration to account.

UNDP is also working with the EU on driving progress on human rights issues, such as antidiscrimination and the deinstitutionalization of children with disabilities. All of that requires funding to bolster work at a critical moment. “We have excellent partnerships with actually a very wide range of donors, from [the] European Union to United States to U.K. to ... Germany, [and the] Austrian Development Cooperation,” said Mariassin. “All of these donors have so far indicated they are planning to increase assistance to Armenia, and they are still looking at the priorities and trying to see where they can make a real difference.”

Meanwhile, U.S. lawmakers from both parties wrote to U.S. Agency for International Development  Administrator Mark Green last month to request more assistance for Armenia, following a Washington, D.C., visit from civil society representatives.

The changes that need to happen for a transition to a more effective and accountable government for Armenian development are both regulatory and social, experts argued, and the governance and development challenges depend on each other. While issues such as education, health care, and economic equality could benefit from more responsive governance, a healthy and stable democracy will need to drive forward those developments in order to thrive, they said.

“Armenia hasn’t changed,” said Mariassin. “In that sense, it’s not a revolution. The systems still function as [before]… These things don’t change overnight.”

But what the protest movement has shown is that “by getting together with a very clear message, citizens are able to influence how institutions react, and eventually how they perform,” he said.

What changed “was the notion that there is a different way out … You don’t have to leave Armenia in order to live prosperously and exercise your freedoms, and that’s a huge opportunity for the country.”

Editor’s note: The reporter travelled to Armenia with the support of the Aurora Humanitarian Initiative. Devex retains full editorial independence and responsibility for this content.