Electric Yerevan: what next?

By bne IntelliNews July 1, 2015

Monica Ellena in Yerevan -


Unemployment is soaring in Armenia, but when Vaghinak Shushanyan handed in his resignation from his post as administrator in a hotel in Yerevan on June 20, he knew it was the right thing to do. He had a party to organise. “I never had 20,000 guests at my birthday party,” the 24-year-old told a cheering crowd on Marshal Baghramyan Prospekt on June 25, before cutting a cake with the symbol of an electric volt.

An activist from Spitak, the city in northern Armenia hit by a devastating earthquake in 1988, Shushanyan has been at the forefront of “No To Plunder”, the movement leading the protests over a 16.7% hike in electricity prices that have gripped the capital since June 19. As the demonstration enters its second week, though, most of his party guests are now gone.

On June 28, President Serzh Sargsyan complained that “annulling the tariff raise is extremely dangerous”, but said the government would use state funds to cover the price increase, rather than raise customers’ bills. He added that an international firm would look into the books of the Russian-owned power distributor Electric Network of Armenia (ENA) and an independent audit would be produced.

This wasn’t enough to satisfy the demonstrators, who claimed that citizens would end up paying anyway as the state budget is funded by taxpayers. Yet while stark reminders to the authorities that the struggle is not over remain – the barricade line of rubbish containers and colourful banners with slogans such as “I’m not going to pay! Will you?” and “Stop robbing people!” – the thousands who had unfolded a 20-metre long Armenian flag last week are no longer in Baghramyan and the protest seems to be fizzling out. “We will continue our fight,” Shushanyan tells bne Intellinews, though adds that as citizens, not demonstrators. “We are not satisfied with the government’s decision, but it is a half step back – the authorities have understood they are there to serve the people, not the other way around.”

Business as usual

There remain some important outstanding questions, not least what effects the protests will have on domestic politics, the fate of ENA and the future of Armenian-Russian ties.

Some observers are cautious, fearing that ultimately the excitement will turn to disappointment as things return to business as usual. “The protest showed there is an enormous energy that could explode, but Armenia’s problems are deeply rooted. Enthusiasm and grassroots activism, though valuable, cannot affect the establishment,” says Hayk Balanyan, an economist at the State Agrarian University’s Agribusiness Teaching Centre.

Stefan Grigoryan, chairman of the Analytical Centre on Globalisation and Regional Cooperation (ACGRC), agrees. “Citizens responded to the apolitical call, but the lack of political alignment is the protest’s strength and weakness,” he explains. “There is no clear leadership. In the long term every movement needs to develop a structure and decision-making mechanisms, as crowds of thousands need management and in fact signs of disagreement already arose.”

Just like in Bulgaria and elsewhere, the initial protest stemmed from dissatisfaction with rising electricity prices, but then morphed into a broader movement in a country already hit hard by the downturn in Russia whose economy is deeply intertwined with Armenia’s. “We need to remain focused on specific, practical issues. If you broaden it, the risk is to get lost and not achieve anything,” warns Shushanian, who also joined the successful protest against the raise of public transport fares in 2013. Like today, thousands of mostly young people mobilized and tickets were kept at AMD100 (€0.18).

Shushanian and other activists like Maxim Sargsyan set up the non-partisan group “No To Plunder” in July 2014 when electricity tariffs were raised by AMD4 (€0.007), but unlike today the movement did not garner much public support. “We started too late, three days before the new tariffs were due to enter into force,” recalls Vaghinak. “This time the government made a tactical mistake, it announced the hike more than one month in advance. We had time.”

The IT-savvy youngsters distributed flyers in the street, attached stickers on apartment block doors, while using the internet and social media as a key tool to reach out to the e-generation. The hashtag ‘#ElectricYerevan’ gained traction on social media and attracted attention both within the country and abroad. The protest started with a sit-in in the central Freedom Square, but gained momentum when it moved to Baghramyan street, where the Presidential residence, the National Assembly and the Constitutional Court plus an array of embassies are located.

The police’s attempt to forcibly disperse the protesters with water cannons only resulted in attracting more people and stimulating creative slogans such as “The more you water us, the more we grow”. “We knew it was a question of time, but we didn’t expect such a stunning turnout and coverage,” Shushanian admits.

The rally had been peaceful up until June 23 when police used water cannons on protestors and detained 237, but they were unable to break it up. The threat to resume force on June 29 did not materialise – the water cannons disappeared, the president urged protesters to work together for a peaceful solution, and top police officials started negotiations with protesters, media and civil representatives to prevent more violence.

New Maidan?

'Electric Yerevan' was swiftly labelled a new Maidan, referring to the protests in Ukraine that ousted the corrupt regime of Viktor Yanukovych. But this was rejected by many demonstrators, who claimed the protest was neither political nor anti-Russian. Still, people chanting Hayastan! (the country’s name in Armenian) were heard loud and clear in Moscow.

Under pressure to end the unrest, President Sarkisyan hinted that ENA could be sold off or re-nationalised. The company is owned by a Russian state holding company Inter RAO, which is controlled by Rosneft, the Russian state energy company run by Igor Sechin, a close ally of Russian President Vladimir Putin. Since acquiring the power distributor in 2006, Inter RAO has been piling up an ever-growing mountain of debt to the tune of $250mn, a huge sum in a country with annual GDP of $10bn.

After meeting with Russian Transport Minister Maxim Sokolov on June 25, Sarkisyan acknowledged that Moscow was the largest investor in Armenia’s economy, but urged companies working in his country to pay greater attention to “social responsibility”.

But public grievances with its former imperial master have long been building. In January, Armenia joined the Moscow-led Eurasian Economic Union (EEU), further increasing Yerevan’s dependence on Russia. “Over the years, politicians sold most of the country’s key assets to one single player – that’s unwise in any circumstance,” notes Grigoryan.

Bilateral ties received another huge blow in January when a Russian soldier serving at the Russian military base in the tiny Caucasus nation killed a family of seven, including a six-month-old boy. Moscow’s decision to have the soldier tried in Russia further strained relations. Following Sokolov’s visit, Sarkisyan said that the Russian soldier would stand trial in Armenia in a move that some saw as an attempt to calm tensions. “That’s purely a façade,” explains Zaruhi Postanjian, a lawyer and opposition MP with the Heritage Party. “Permyakov [the soldier] remains in Russia – how credible will a trial be if the Russian government does not hand over the defendant?” 

There have been other steps taken by Russia to help calm tensions. Armenia struck an agreement to purchase $200mn-worth of Russia-made weapons through a low interest loan provided by the Russian government, Radio Free Europe’s Armenian service Azatutyun.am reported on June 28. The disbursement of the “concessional export loan” was formalised at that meeting between President Sargsyan and Sokolov. According to a statement issued by the presidential office, the weapons will “considerably expand the assortment of modern weaponry in [Armenia’s] arsenal” – crucial for a country where war with its neighbour Azerbaijan seems always near. It has not been specified what type of new military equipment will be purchased.

Yet many Armenians express dissatisfaction that the Russian-led EEU has failed so far to deliver on promises of economic growth, hinting that the government should instead look again to deepen relations with the EU. But a third way is possible. “We are too small to bet on one single partnership,” maintains Balanyan. “Armenia should be with neither of the blocs, but on its own, like the non-aligned movement in the 1960s, and develop relations beyond Moscow and Brussels. Iran could be on the horizon.”

In downtown Yerevan, on Baghramyan, the midday heat is thinning out the protestors, but Shushanyan will surely be there at sunset. “This is a national awakening, now they have to listen to us,” he says hopefully.

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