Executive Summary and Recommendations
After May’s parliamentary elections, Armenia is preparing for a pivotal presidential vote in 2013 that will determine whether it has shed a nearly two-decade history of fraud-tainted elections and put in place a government with the legitimacy needed to implement comprehensive reform and resolve its problems with Azerbaijan. President Serzh Sarkisian has a brief opportunity to demonstrate statesmanship before he again faces the voters in what is likely to be a competitive contest. Sarkisian has demonstrated some courage to promote change, but like his pre-decessors, he has thus far failed to deal effectively with serious economic and governance problems, including the debilitating, albeit low-intensity, Nagorno-Karabakh war. Another election perceived as seriously flawed would serve as a further distraction from peace talks and severe economic problems. The likely consequences would then be ever more citizens opting out of democratic politics, including by emigration.
The genuinely competitive parliamentary election had some positive signs. Media coverage during much of the campaign was more balanced, and free assembly, expression and movement were largely respected. The president’s ruling Republican Party won a solid majority of seats, but its former coalition partner, Prosperous Armenia – associated with rich businessman and ex-president Robert Kocharian – came in a strong second. The Armenian National Congress (ANC), led by the first post-independence president, Levon Ter-Petrossian, returned to parliament after a more than ten-year absence. Nevertheless, many old problems reappeared: abuse of administrative resources; inflated voters lists; vote-buying; lack of sufficient redress for election violations; and reports of multiple voting and pressure on some voters. Reforms adopted after the violence that left ten dead and 450 injured following the 2008 election that brought Sargsyan to power were spottily implemented.
It is crucial that the February 2013 election in which Sarkisian will seek a second term, becomes “the cleanest elections in Armenian history”, as the president had promised, not least because polls show very low trust in nearly all government bodies and institutions, including the presidency and parliament. The president initially took some bold steps, most noteworthy attempting to normalise relations with Turkey. A new class of under-40 technocrats, less influenced by Soviet ways of decision-making, has risen through the ranks and is widely seen as favouring a new style of government. But change has been slow. Political courage is needed to overhaul a deeply entrenched system in which big business and politics are intertwined in a manner that is often at least opaque. This manifests itself most vividly through the domination of much of the economy by a small group of rich businessmen with government connections.
The political crisis after the 2008 post-election violence, as well as the 2009 world economic crisis, shook Armenia. Weak political will and the resistance of vested interests muted many of the long-overdue, if timid, reforms the administration started. The economy consequently remains undiversified, unhealthily reliant on remittances. Rates of emigration and seasonal migration abroad are alarmingly high. There have been few serious efforts to combat high-level corruption. The executive branch still enjoys overwhelming, virtually unchecked powers. The judicial system is perceived as neither independent nor competent: the prosecutor dominates procedures, and mechanisms to hold authorities accountable are largely ineffective.
Media freedom is inadequate. Outright harassment of journalists and media outlets has decreased, but there is still a glaring lack of diversity in television, from which an overwhelming majority of Armenians get their information. No nationwide broadcasters are regarded as fully independent.
Russia remains Armenia’s key ally – both its main security guarantor and biggest trading and investment partner. Because of the war with Azerbaijan and frozen ties with Turkey, Yerevan has few realistic alternatives to Moscow, though it has frequently sought a “multi-vector” foreign policy and deeper ties with Euro-Atlantic partners. The EU and U.S. are trying to increase their influence, offering expertise and other aid to promote reforms, but they should do more to keep the government accountable and encourage the building of democratic institutions, especially if they want to be seen as credible, even-handed critics throughout the region with elections also due in Georgia and Azerbaijan in 2012-2013. Twenty years after the breakup of the Soviet Union, peaceful democratic transitions of power have yet to become the norm in the South Caucasus.
President Sarkisian and his government acknowledge many of the most pressing problems, but numerous reforms exist only on paper or seem deliberately designed with ineffective enforcement mechanisms. The cautious, evolutionary approach to reforms provides at best weak stability. The breakup of the Republican-Prosperous Armenia governing coalition and a more competitive parliament may now provide the stimulus the administration needs. Limping towards change, however, would neither capitalise on Armenia’s strengths nor be a good presidential campaign strategy. The country needs a better future than a stunted economy and dead-end conflicts with neighbours.

To further democratisation, economic growth and reform and make the government better prepared to engage in difficult discussions with Azerbaijan over resolution of the Nagorno-Karabakh conflict
To the Government of Armenia:
1. Make deep governance and economic reforms a top priority to build public trust in state institutions.
2. Address the shortcomings of the electoral process identified by the International Election Observation (IEO) mission; improve, in particular, voter lists and the complaints and appeals procedure; and investigate and penalise abuses of the elections process by state officials.
3. Continue to make the fight against corruption a state priority by prosecuting officials involved in fraud.
4. Pass a new Criminal Procedure Code that strengthens the independence of the judiciary, increases the role of the defence and decreases the prosecutor general’s powers; and improve the effectiveness of the Administrative Court to hold officials accountable.
5. Increase financial support for the office of the ombudsman, especially its activities in the regions.
6. Establish civilian control and accountability of the police; tackle corruption in the force; and consider establishing a ministry to which the police would be subordinate.
7. Redouble efforts to resolve the Nagorno-Karabakh conflict with Azerbaijan and maintain an open approach to resuming a dialogue with Turkey.
To the U.S., EU and international organisations:
8. Offer technical and financial assistance to help the government address voter registration problems, especially bloated voters lists, which undermine public trust in elections.
9. Support aggressive judicial reform programs linked to the setting of benchmarks for implementation of the “strategic action plan 2012-2016” and passage of a new Criminal Procedure Code.
10. Increase funding to non-state actors to support re-form; and hold the government accountable for any backsliding from progress achieved during the 2012 parliamentary vote regarding media access and freedom of assembly and expression.

International Crisis Group
Yerevan/Tbilisi/Istanbul/Brussels, 25 June 2012

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