Armenia’s governance system is in deep crisis, which has its negative impact on the security and development prospects of the country. Certain processes, as well as numerous international reports, indicate the symptoms of a systemic crisis.

After the presidential elections in 2008  and  the use of force against peaceful demonstrators on March 1, Armenia’s governance system  appeared in a deep crisis, which has been manifested in different ways over the last 10 years. There is a pressure on the model of governance not only by the public, but also by international factors and external challenges, in particular in the form of threat from Azerbaijan, which Armenia is not able to properly respond to.All this has turned into cyclical crises. In August 2014 Azerbaijan launches diversion attacks on Armenian positions, in November 2014 Azer- baijan shot down an Armenian helicopter, in January 2015 a Russian military serviceman Permyakov killed the Avetisyan family in Gyumri, in January 2015 Artsakh’s law enforcement agen- cies beat up members of the Pre-Parliament in Berdzor. In February 2015 Serzh Sargsyan decided to neutralize Gagik Tsarukyan. Demonstrations have taken place in Baghramyan Street in June 2015. The constitutional  referendum  is  falsified in December 2015 and widespread violations are taking place. In April 2016 Azerbaijan begins a war, and in July 2016 the Sasna Tsrer group attacks the patrol police regiment. These crises reflect systemic problems.

Instead of responding to the deep crisis of March 1 2008, the Armenian government tried to solve the problem of street protests by strengthening the police, but ultimately, struggle broke out inside the system and a clash with Gagik Tsarukyan took place. The street struggle continued after solving the problem of Tsarukyan. In 2013-16 large demonstrations have taken place in Yerevan during the summer months. In 2013 the struggle against transport price increase, in 2014 the protests against pension system reform, in 2015 demonstrations against electricity price hike, in 2016 – Sasna Tsrer’s Actions and Khorenatsi and Sari Tagh Streets protests.

Corruption also has a serious impact on the systemic crisis. Research shows  that corruption is a serious challenge for development. For example, the Transparency International anti-corruption organization’s Corruption Perceptions Index (CPI), which assesses the level of public perception of corruption, in 2016 gives Armenia the value of 33, so that Armenia shares the 113th to 115th places among 176 countries, along with Bolivia and Vietnam. The CPI is a composite index based on various surveys conducted among businessmen and experts. In 2015 the value of the CPI of Armenia was 35 and in that value it was the 95th to 98th among the 168 countries. Taking into account the statistical error calculated for the CPI of Armenia (4.01), one can argue that in 2015, compared to Armenia’s public sector corruption perception in 2016, remained approximately the same. At the same time, Armenia retreated by 18 positions in the CPI rankings”.1

The structure of the economy, in turn, affects the management model and sometimes they inte- ract with each other. The main obstacle for the economic development of Armenia is the exis- tence of monopolies that limit the growth of the economy. According to the World Bank 2013 report, Armenia’s economy is the most monopolized in the former USSR and Eastern Europe2. Published by American Heritage Foundation in 2018 The index of economic freedom also speaks about the limitation of economic freedoms over the past decade, which is the main reason for the monopoly. According to the report, in 2018 Armenia occupied 44th place among 180 countries and had 68.7 points3. In 2008 Armenia was on the 28th place and had 70.3 points4.

According to the 2013 Transparency Inter- national Anti-Corruption Center survey, if we look at some of the manifestations of corruption, for example, in the defense system, it becomes clear that there as well  there  is  monopoly,  especially in the procurement sector, where 54% of total procurement was made by one source method (negotiations, without announcement), although

the procurement made by other methods, but the numbers of these contracts are not available, and 28% of companies that participated in open tenders were rejected by the MoD, i.e. the competition was limited5:

Inefficient management of the economy and budget also creates a challenge for the security. Because of ineffective  economy,  Armenia  has been boosting state debt fast since 2008. In 2008, Armenia’s foreign debt was $ 1.5 billion, and by the end of February 2018 it reached $ 6.9 billion6.

Economically limited opportunities make citizens leave Armenia. Over the past 10 years, 373,000 people have left Armenia and have not returned, that is, more than 37,000 a year on average7. Taxes and budget have been gradually increased, but resources have not been spent effectively. In 2008, the  budget  of  the  Republic of Armenia was about 822 billion drams, in 2018 the budget reached 1 trillion 464.2 billion drams8. At the same time, budget expenditures have not increased proportionately. For example, in  2008 the police budget was 31 billion drams, and in 2018 it reached 60 billion drams. The education budget in 2008 was about 93 billion drams, and in 2018 reached 127 billion.9

Military spending also does not correspond to the amount of the risk. The budget of  Azerbaijan  in 2008 was $ 1,653 billion, and in 2015 it was $ 3 website mentioned that the purchases  made through tenders were two times more than billion10. During the same period, Armenia’s military budget has increased from $ 353 million to $ 447 million11. The police budget has grown faster than the military, though Azerbaijan has been a bigger challenge to Armenia’s security.

The low level of public confidence in its turn is a challenge to the management system. According to the results of the Caucasian Barometer survey (which studies the public perception of political, social and economic developments in South Caucasian countries), the Armenian population has very low confidence in state institutions. In 2017, 5 percent of respondents fully trust the executive, 4 percent – the judicial power, 3 percent – the Natio- nal Assembly, and 6 percent – the president. The only trustworthy institution is the army, 51% of respondents fully trust it. By the way, the army is not only the biggest trust structure but also the only such structure.12

The other problem of this management model  is that it becomes more authoritarian, the citizens’ freedoms and the transparency of the government are increasingly limited. The constitutional amend- ments in 2015 have opened a way to strengthen authoritarianism. The problem is that these amend- ments have created an opportunity for Serzh Sargsyan to reproduce his power and remain in power for a long time than in the previous constitution. And historical experience shows that the desire of the country’s top officials to remain in power is a serious challenge for development.

The legislative changes following the cons- titutional amendments give rise to additional concern. According to the draft law “On the Govern- ment’s Structure and Activity,” the Government sessions are closed. By the decision of the Prime Minister a part of the session may be held openly. “The analysis of Article 10 of the draft reveals: “The issues that come into the government session are not publicized (in the absence of a relevant requirement in the law), the sessions are closed, after the  session, the government staff records the session, and members of the government may publish information on the matter  discussed  exclusively  by the Prime Minister’s permission, as a result of which the public will receive partial and incomplete information on government  activities  in  general, as well as incomplete information on government activities and issues discussed at the meeting in particular “13:

As this analysis was being completed, a civic movement headed by Nikol Pashinyan began. Hund- reds of thousands of citizens went out to the streets with actions of civil disobedience and protested against the NA’s election to Serzh Sargsyan. As a result of multi-layered developments lasting for three weeks, Serzh Sargsyan resigned and Nikol Pashinyan received a sufficient number of votes at the 2nd special session of the National Assembly and became the Prime Minister of the Republic of Armenia.

Interestingly,  in terms of  democracy, Armenia has not made any progress in the last 10 years, according to international reports. According to the Economist Intelligence Unit’s Democracy Index 2008, Armenia had 4.09 points, and the 2017 rating was 3.88 points14. According to the report released by Freedom House’s Freedom of the World in 2008 report, Armenia’s Freedom Index was 4.5, the Civil Liberty index 4, and the Political Freedom index 5. In 2018 the Freedom index was 4.5, Civil Liberties 4, Political Freedom index 515. We believe that the latest political developments will also have their impact on these reports.

Corruption, inefficient management of economy and budget, limitation of economic and political freedoms have a negative impact on Armenia’s security. They also limit development expectations, which is the biggest challenge for Armenia’s security.







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12 http://w w w.crrc .am/hosting/file/_sta tic_c on tent/ barometer/2017/CB2017_ARM_presentation_final.pdf

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