by Tony Halpin and John Hughes, Editors, Special to AGBU News

Visitors to Armenia might steel themselves for initial evidence of economic hardship as they leave Zvartnots Airport for Yerevan. Instead, the first scene encountered is a garish strip of neon-lit casinos that light the night sky like a poor man's Las Vegas.

It is an incongruous introduction to life in the republic, confounding the image of a country where half the population lives on a dollar a day or less. The casinos, forced to relocate outside the city boundary by a law enacted in 2002, symbolize the loose money and looser morals of get-rich-quick capitalism. And their existence is further evidence that a tiny minority of Armenians have consumed the benefits of capitalism, living lavish lives while hundreds of thousands live in desperate poverty. A few thousand more form Armenia's embryonic and still fragile middle class.

Banishment of the casinos from the center to the margins of everyday life in Yerevan symbolized also a new stage in the evolution of the country, one in which gangster economics is giving way to an image of more "respectable" consolidation of authority and wealth. The neon glowed bright in the center, but did not shine a light on where real power now resides.

The 2003 parliamentary elections were notable for the entry into politics of powerful business figures in Armenia. People who previously would have relied on connections to influential politicians to protect their interests now felt the need to advance those interests directly. Business and politics were merging in Armenia and people now talked of a rule by oligarchs, just as they did some years earlier in Russia, albeit on a much larger scale.

Elections were heated and controversial, but mostly non-violent. Weeks after the voting, however, bullets carried the will of those whose lives apparently were disturbed by the election outcome. A wave of public killings in Yerevan and in Gyumri, believed to be motivated by the protection or consolidation of business interests, underscored a sense of public impotence in the face of a corrupt establishment able to settle scores with impunity.

Armenia is led by a president whose re-election was marred by widespread voting abuse, documented during two rounds of voting in a process internationally condemned. Its laws are made by a parliament heavily weighted by businessmen voting on legislation that impacts their very livelihood (and who, by law, are immune from prosecution). The perception of political life in Armenia in 2003, then, is of a process entirely sealed off from the concerns of ordinary people.

Voter turnout for the presidential elections was encouraging (61 percent in the first round; 64 percent in the runoff). Abuse of the process, however, was demoralizing.

Disenfranchised by a flawed voting system and discouraged by evidence of thug-rule, citizens have little belief that they can influence developments in their country. Apathy, cynicism and distrust shape attitudes towards the political establishment, along with a dangerous polarization of opinion into "them" and "us". Half of the country wants nothing to do with the present regime and half regards the principal opposition as politically-neophyte opportunists who could undo whatever progress has been made in Armenia in recent years.

Illegal measures taken to ensure President Robert Kocharian's second term were seen by many analysts as unnecessary. Against a candidate, Stepan Demirdjian, who ran on nostalgia, Kocharian's experience would likely have been enough to counter Demirdjian's "I am my father's son" naïve platform.

In short, politics in 2003 is in a bad way in Armenia with no visible signs of improvement, or even of a road to improvement. The republic is paying a high price internationally in terms of public censure and criticism of the flawed presidential and parliamentary elections.

Potentially harmful to outside perceptions is the republic's reluctance to adopt Council of Europe requirements in areas of human rights (capital punishment, religious minorities, and homosexuality). Viewed through the arguably flawed and often uninformed prism of Western standards, Armenia suffers a stained image as a fledgling democracy eager to embrace civilized standards of behavior.

Kocharian may yet rescue the situation sufficiently to give hope that his second term will amount to more than a five-year retirement plan. He demonstrated during his first term a remarkable ability to consolidate power, despite being an "outsider" with no political constituency in Yerevan.

The President came to power in 1998 because then-President Levon Ter-Petrossian made unguarded comments about settling the Karabakh conflict by compromise. Five years later the conflict remains unsettled and Kocharian, a Karabakhtsi, has crafted a political career that may best exemplify a formidable talent for survival.

Karabakh may have formed Kocharian the man and created Kocharian the president but it remains the greatest challenge to Kocharian the statesman. An uneasy armed stand-off has held for nine years but a permanent settlement of the conflict remains as elusive as ever. Militarily, Armenians remain dominant and there is some evidence of a slow shift in attitude among international mediators away from an insistence on Karabakh's permanent status within Azerbaijan. October's presidential election in Azerbaijan is likely to be followed by renewed and intensive diplomatic attempts to resolve the problem, presenting Kocharian with arguably his biggest test as Armenia's leader.

The defining moment of politics in post-independence Armenia was October 27, 1999. On that afternoon a terrorist gang murdered eight leading politicians in the National Assembly live on television, including Prime Minister Vazgen Sarkissian and Speaker of the Parliament Karen Demirdjian.

That massacre reshaped political life in Armenia.

The loss of Sarkissian and Demirdjian, who were apparently united in an exercise to limit presidential power, gave Kocharian free run of the political landscape. Where once he might have feared his two rivals' potential to create a powerful parliament and a weakened head of state, the deaths of Sarkissian and Demirdjian left Kocharian unrivaled to mold institutions of power to his liking.

Along with Minister of Defense Serge Sarkissian, another "outsider" to Yerevan's political culture, he now has absolute command of political life in Armenia, unchallenged by any serious opponent.

The October 27 massacre was recorded on videotape and seen live by thousands. Yet two and a half years after the accused were brought to trial, no judgement appears imminent. Numbed by the absurdity of the process, a public hardly notices the Trial of Two Centuries.

Some who still pay attention, though, raise questions about possible presidential involvement in the events. The famous question from the Watergate era has acquired new meaning in Armenia: What did the President know and when did he know it? Neither the interminable trial nor any other process of inquiry is likely to answer the question.

Influenced greatly by what goes on in the National Assembly or across the street in the Presidential Office, nonetheless, life in Armenia is not confined to that significant block of Baghramian Street.

If politics has been on a slow curve of decay, economic life in Armenia has been rising in the opposite direction. The transformation in prospects has been little short of miraculous after the dark, literally, early years when power outages dominated people's daily lives and deprived an already devastated country of any prospect of recovery.

A decade ago citizens despaired of maintaining even the most rudimentary comforts of life. Now, previously unimagined businesses flourish in the capital, where hardly a block of the center is without a construction or renovation site. In the center of Yerevan alone, more than 500 cafes cater to a lifestyle that contradicts dated impressions of a country in decline.

The Diaspora's relationship with Armenia, particularly under the present regime, remains ambivalent. The Second Armenia-Diaspora Conference in Yerevan in 2002 was marked by open criticism of the authorities from powerful Diaspora voices angered at the condition of the country and the extent of corruption. Kocharian invested a great deal of effort and personal capital in pledging to clean up public life and create a problem-free environment for Diaspora investment. He supported reform of Armenia's Constitution to legalize dual citizenship too, a pledge that was undone by voters' rejection of the proposal in a referendum in May.

Economically, the relationship has assumed increasing importance. Substantial recent investment by a number of influential figures, most notably Lincy Foundation's $150 million program to renew roads, sidewalks, and cultural centers, has accounted for much of the 12 percent growth in Armenia's economy last year. Regardless of short-term political difficulties between the Republic and the Diaspora, the benefits of such engagement will be felt by the people of Armenia long into the future.

Outside the capital is another story, where village life bears little resemblance to the "big city" culture. Social ills that might long ago have been extinguished in developed countries are still matters of concern in 21st century Armenia rural life.

As in many societies, the old and infirm suffer most from social shortcomings, including insufficient pensions or inadequate healthcare. For too many, independence has not meant freedom, but a crippling dependence on foreign-based charity, or on families who themselves struggle under the burden of "transition".

For these, memory of communism enjoys the short-sightedness of revisionist history, of a time when everything worked and the State, if it was a jailer, was at least also a caretaker.

Twelve years into a life for which even Armenia's long and tumultuous history could not have prepared it, the tiny republic is big enough for extreme polarization.

Businessmen and, increasingly, businesswomen, say they can be successful in Armenia—and at least manage a life that bypasses the well-worn emigration trail of the past decade.

The quiet upsurge in security affects a prideful minority, who demonstrate their confidence behind the wheels of expensive foreign cars and by purchasing pricey consumer goods.

The ripple effects are spreading slowly, albeit far too slowly for the 50 percent of the population considered by the World Bank to be living below the poverty line.

Originally published in the November 2003 ​issue of AGBU Magazine. Archived content may appear distorted on your screen. end character

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AGBU Magazine is one of the most widely circulated English language Armenian magazines in the world, available in print and digital format. Each issue delivers insights and perspective on subjects and themes relating to the Armenian world, accompanied by original photography, exclusive high-profile interviews, fun facts and more.