Derek Brower in London -

Armenians will go to the polls on Saturday to vote for a new parliament in an election that is expected to see Serzh Sargsyan, the present prime minister, confirmed as the country's president-in-waiting.

The Republican Party, which Sargsyan leads, is expected to become the largest party in the parliament, even if it seems unlikely to win an outright majority. But analysts expect that the vote will also see Armenia's president, Robert Kocharian, develop his own power base – through the pro-government party Prosperous Armenia, set up by local businessman Gagik Tsarukyan – in an effort to protect his legacy from Sargsyan.

President-in-waiting?

The socialist Armenian Revolutionary Federation is expected to come third in the poll, with the opposition Country of Laws party picking up a small number of seats. The parliament consists of 131 deputies.

Sargsyan, like Kocharian a native of the Nagorno-Karabakh region over which Armenia fought a bloody war with Azerbaijan in the 1990s, is one of Armenia's wealthiest businessmen, largely on the back of his near monopoly of the country's oil import business. He gained notoriety as Armenia's minister of defence before becoming prime minister earlier this year following the death of the incumbent, Andranik Margaryan.

Kocharian has ambiguously approved Sargsyan's ambition to become Armenia's head of state next year when presidential elections are due to take place. Local analysts say that he also has the support of Washington, which is watching the parliamentary elections carefully.

"The US couldn't find a Saakashvili in the opposition, so they are backing stability instead of another coloured revolution in Armenia," Richard Giragosian, a prominent commentator on Armenia told bne from Yerevan.

Last week, demonstrators took to the streets demanding the impeachment of Kocharian and to protest against fraud in the upcoming elections. Kocharian has been criticised for isolating Armenia from its neighbours and becoming too closely allied with Moscow. Armenia was excluded from the countries through which the Baku-Tbilisi-Ceyhan and other pipelines pass.

However, Giragosian downplays the protests, arguing that the democratic process in the country is better characterised as apathetic, with the outcome of the parliamentary elections already predictable.

"Armenia has copied the Russian model," he says, where the government controls the media and the Byzantine political battles are being fought within the ruling elite.

Peaceful polls

Election monitors from the Organisation for Security and Cooperation in Europe and other countries – though not Turkey, whose monitors were refused entry visas – expect the elections to pass relatively peacefully. But the vote will be monitored to see if it shows an improvement on previous elections, which the OSCE and other observers said fell short of international norms. Saturday's parliamentary election is the fourth since Armenia became independent in 1991.

The election is likely to be a "dress rehearsal" for next year's presidential vote, say analysts. But another outcome could be the creation of a power base for Kocharian, who hopes to play a statesman's role after stepping down as president next year. Kocharian has no party of his own, but hopes the emergence of Prosperous Armenia – which many believe him to be behind – and other counterweights to Sargsyan's Republican Party will give him protection once he leaves office, suggests Giragosian. "It will be very similar to the handover from Yeltsin to Putin."

A number of prominent members of the Nagorno-Karabakh "clan" are likely to become deputies in the new parliament and to hold government positions, including the key job of defence minister.

Moscow is also hoping Sargsyan succeeds Kocharian as president next year, despite his recent pre-election efforts to distance himself from the Kremlin.

Russian companies have continued to buy strategic assets in Armenia, including a large power station, telecommunication assets and shares in local financial institutions. Among Russia's strategic interests in Armenia is its potential to become a transit country for oil and gas from Iran and the Caspian region. A recent deal between Yerevan and Moscow ensured that a pipeline to export natural gas from Iran to Armenia, which Tehran hoped could eventually be used to export gas to Georgia and Ukraine, was built to a size that could only supply local demand in Armenia.

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