Armenia risks backsliding on corruption, analysts warn

alen simonyan nikol pashinyan

By Mark Dovich

Nearly four years on from the Velvet Revolution, which saw massive street protests topple a ruling elite widely reviled for perceived nepotism, the Armenian government is increasingly at risk of backsliding on corruption, according to leading members of civil society.

“[The authorities] are trying to copy what has been done by their predecessors. I mean, full-scale return to previous times,” said Varuzhan Hoktanyan, project director at Armenia’s Transparency International Anti-Corruption Center.

Liana Sayadyan, the deputy editor of Hetq, Armenia’s leading investigative outlet, said that government corruption poses a growing problem, but cautioned that the current state of affairs is not like the systemic nepotism of the Republican Party, which ruled Armenia before the Velvet Revolution dislodged them from power in the spring of 2018.

“I can’t compare [today] with the system that existed before the revolution, during especially Serzh Sargsyan’s regime,” Sayadyan said.

“But,” she continued, “we notice that there are already cases [where] new players in politics use the same mechanisms or same methods that were experienced by previous regime,” Sayadyan said.

One key “mechanism” is the awarding of state tenders to relatives and friends of legislators and officials.

Just days ago, Hetq published an article describing how a company connected to Vahan Naribekyan, now the head of the administration of parliament, has signed 150 contracts with the state since the Velvet Revolution to supply furniture for different agencies or ministries

“This company, which was created in 2014, before the revolution had only 3 contracts with the state,” Sayadyan noted.

Naribekyan is seen as a close ally of Alen Simonyan, the speaker of parliament, who has himself been caught up in a series of scandals and alleged corrupt dealings in recent months.

Perhaps most prominently, a small asphalting company run by Simonyan’s brother has won government tenders worth over $1 million in the past few months.

According to Hoktanyan, the controversy over Simonyan’s brother’s company is a reflection of government corruption becoming “more sophisticated” in Armenia.

“In the previous regime, [corruption] was done openly,” said Hoktanyan. “Specifically take Alen Simonyan’s brother winning the tenders. In previous times, either under [former presidents] Serzh Sargsyan or Robert Kocharyan, they would simply do it as sole sourcing.” A sole source purchase is one where the bidding process is completed after negotiations with only one potential supplier.

“Now there is a normal tender, but the point is, the tender is won by this official’s brother. Was it really a fair tender or not?” he said.

Hoktanyan and Sayadyan both said that the continuing presence of oligarchs in Armenia’s legislature presents another major cause for concern — despite repeated calls by Prime Minister Nikol Pashinyan during and after the Velvet Revolution to separate politics from business in Armenia.

“When we [pay] attention to what [the government] says and what they do,” said Sayadyan, “we can say that nothing corresponds to the principles or values that they announced when they took the power and when the revolution was made.”

“For example, we remember that [Pashinyan] was struggling, he and his party, against oligarchs in the parliament. But we see that, after the [June 2021] snap election, on the [party] list there were two oligarchs who entered the parliament.”

Khachatur Sukiasyan and Gurgen Arsenyan, both prominent businessmen, won seats in the National Assembly this summer under Pashinyan’s party banner. In October a gasoline company connected to Sukiasyan won a tender worth over $11 million to supply fuel to the Defense Ministry.

There are several root causes of Armenia’s seeming inability to clamp down on government corruption, Hoktanyan argued.

First, Pashinyan’s government failed to adopt a comprehensive anti-corruption strategy once it came to power in the aftermath of the Velvet Revolution — despite moves to create specialized institutions, like the Corruption Prevention Commission and Anti-Corruption Committee, and to undertake asset recovery efforts.

“The problem here is that, in all such cases, my beloved phrase is this: ‘When the fight against corruption is carried out in a selective manner, then it’s the end of the fight against corruption,’” Hoktanyan said.

Other major obstacles to combating corruption in Armenia, Hoktanyan said, are business monopolies in key industries, the lack of separation of powers among government branches, the lack of an independent judiciary, and the presence of business elites in the highest levels of politics.

“I don’t think that this is the way to have really good governance,” Hoktanyan said. “And that’s why I’m saying that there is a very high probability of recurrence of those systemic features, which were existing under the previous regime.”

Other alleged corruption cases that have garnered attention in Armenia as of late involve state tenders won by companies connected to Bagrat Badalyan, the deputy chief of the prime minister’s staff, and Arshak Karapetyan, the former head of the Defense Ministry.

Another one is the Armenian government’s recent acquisition of a minority share in the Zangezur Copper-Molybdenum Combine, Armenia’s largest private enterprise, from its Russian owner in unclear circumstances.

There are also high-profile investigations into a number of allegedly suspicious purchase agreements signed by the Health Ministry with private suppliers during the coronavirus pandemic last year.