Armenian prime minister steps down in bid to end political crisis

Armenian prime minister steps down in bid to end political crisis
Hovik Abrahamyan: "We need a new approach, new start".
By bne IntelliNews September 8, 2016

Armenian Prime Minister Hovik Abrahamyan tendered his resignation on September 8, paving the way for the formation of a new government after an economic slowdown this year and recent mass protests.

“We need a new approach, new start. That’s why I’ve decided to resign and let the president form a new government,” Abrahamyan said. Armenian President Serzh Sargsyan said last month radical changes were needed and vowed to form a “national unity government” following mass protests in July prompted by a prolonged hostage crisis.

Abrahamyan was appointed prime minister in 2014, replacing Tigran Sargsyan, who moved on to serve as the chairman of the Russia-led economic bloc Eurasian Economic Commission. He has ruled the country through a period of turmoil prompted by perceptions of mismanagement of national security and of key sectors of the economy, such as electric utilities.

In the most recent display of dissatisfaction with the Abrahamyan administration, on July 17, protests broke out in the Armenian capital city of Yerevan in which demonstrators backed an armed group of veterans of the Nagorno-Karabakh war who attacked a police station, killing two and taking eight hostages. That Armenians would endorse such violent means of dissent demonstrates their disenchantment with the administration of President Sargsyan, with the government’s handling of the Nagorno-Karabakh issue just one of a long roster of grievances.

The police station attackers belonged to a group dubbed the Daredevils of Sassoun, which is believed to comprise thousands of members and is named after an Armenian epic tale from the Middle Ages. Upon occupying a police station in central Yerevan, the 20-odd attackers demanded the release of a radical opposition figure, Zhirayr Sefilian, who had been arrested at the end of June, as well as Sargsyan’s resignation and the formation of a caretaker government that would oversee the organisation of fresh elections.

Known for his criticism of the government, war veteran Sefilian has led opposition movements for two decades, decrying not just Yerevan’s willingness to compromise on the status of some of the regions surrounding Nagorno-Karabakh that are currently under occupation by ethnic Armenians, but also the high rate of unemployment in the country, poor housing, precarious healthcare facilities and corruption. He has chosen to maintain his “Founding Parliament” movement on the fringes of politics, however, claiming that the lack of transparency in the system would have prevented his movement from engaging in decision-making in the country.

While Abrahamyan and his cabinet have been accused of corruption, most of the demonstrators' grievances have been against President Sargsyan, with whom the ultimate executive power rests in Armenia. As dissatisfaction with his administration has increased, Sargsyan has proceeded to dismiss the entire staff of key state agencies to placate tensions.

On top of these worries, Armenia’s economy continues to deteriorate. GDP growth eased to 3% last year from 3.5% in 2014 and is projected to further weaken to 2.2% in 2016. The country depends heavily on crisis-stricken Russia for commerce and remittances.

Abrahamyan's successor is rumoured to be 53-year-old Karen Karapetyan, a long-serving executive who managed the Armenian branch of Russian gas giant Gazprom for over a decade. His brother Samvel is a well-known Russian billionaire of Armenian origin, whose Tashir Group conglomerate purchased the country's largest electric utility in 2015.