Armenian “Putinomics” is dead: Time for great turnaround

Armenian “Putinomics” is dead: Time for great turnaround

The hundredth day of the current RA Government expired, but by and large, it is not yet clear what new strategy it is passed.  And it is not clear because the base of the economic activities of Armenia and the international scopes remain unchanged.  Certainly, they will fight against corruption “at the same time”, even it might be a little reduced, but the base remains the same.  Anyway, nothing other than this is said and written.  Certainly, the new Prime Minister does not address his subordinates or complaining citizens with “hey, you”, he is also fluent in Russian, and we no longer see people symbolizing the merging of corruption or criminal and politics among the ministers.  In addition, the PIUs as unsparing parasites on the budget are closed, and if we consider this as a formed trend in advance rather than a lump sum or a PR move ahead of the elections, then serious challenges are expected.

Certainly, Armenia needs serious and fundamental reforms, and it is an axiom that driven by regional security reasons, the shocks are simply contradicted to our country.  However, does the current government have the potential to overcome the upcoming challenges and how “far” can the government go?  This perhaps still remains the question of questions which so far remains unanswered.

The word “reform” which Armenia needs is relative because the post-Soviet economic order which is called a “Putinomics” by a number of international experts is not subject to any reforms in any post-Soviet country, moreover in Armenia.

The Armenian “Putinomics”, unlike its Russia word, is void of hydrocarbon rent.  However, having almost the same institutional structure and the logic of activities was at the maximum adjusted to the Russian system and was a “parasite” on the Russian.  When during the second Iraq war, the oil price reached USD 140 per barrel, the RA leadership void of state thinking thought that they can take an “advantage” of it.  And they “took the advantage”.  To do this, it was necessary not to think about the qualitative development of the country’s economy but if to view the issue in a schematic way, to “export” the laboring citizens to Russia, convert the currency in Armenia received from them into AMD, show a double-digit economic growth, invest the collected money into an “elite” real estate and extort money from it too.

And for the system to work without “creak”, it is necessary to “deepen and expand” the “age-old friendship” with Russia: hand over the actives of the economy to Russia, the rest to oligarchs, kill the small businesses, build your own “vertical power”, similar to Putin, and multiply the punitive apparatus.  Naturally, this approach was applauded in Moscow, and as they say, “set a wolf to keep the sheep.”  But the global financial crisis killed this Armenian “Putinomics” very quickly due to objective reasons.  It is ridiculous that Armenia that has no oil is not benefiting from the fall in oil prices but falls into shocks, and the RA economy marks no headway since 2009.  Russia’s case is different.

The “fertile” years allowed Moscow to accumulate almost a quarter of a trillion dollars in reserve funds which are a supply of enormous strength.  However, currently it is even less than USD 100 billion, and this year it will be exhausted completely, and relatively “tolerable” price of oil price is not sufficient to ensure the inflow of those funds.  The syndrome of the old woman in “Golden Fish” fairy tale and Shakespeare’s Macbeth drama are soaked into the texture of Russian state and society, and make any talk about the reforms meaningless.  Like in the years of USSR, the nowadays Russia which remains a collapsed empire until the end faces the greatest risks, and its neighbors objectively “get a share” of these risks, including and especially Armenia which unsparingly and with “enthusiasm” was enlarging the role and significance of Russia in all spheres of life and policy of Armenia.

On the other hand, Moscow striving to build a “Russkiy Mir” was “hitting on the fingers” of Armenia when Yerevan was trying to diversify its relations with the outer world by using all the levers which Armenia was unsparingly distributing Russia over the years, without thinking about the consequences.  Yes, “Putinomics” is dead in Armenia long time ago but along with the desire to come out of the claws of Russian “Putinomics”.  Armenia’s current economic situation is the consequence of fallacious political decisions based on close distance political calculations.  Consequently, the situation can be corrected firstly on the political dimension.

The Kremlin mistakenly terrifies of social movements, “Maidans”, “electric-Yerevans”, fight against corruption, and fair elections without understanding that the century is changing not only and not so much by gatherings in the squares as by what Steve Jobs did and what Elon Musk is doing.  And thus is the world changed and is changing by causing the need for new social and economic relations.  They even forgot the warning of oil minister of Saudi Arabia (1982) Sheikh Ahmed Yamani: The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil. And Armenia is still “developing” the mining industry, the government is talking about Lars, the Abkhazian railway, apricots-tomatoes-brandy and selling them in Russia thru Lars, the commitments before EaEU, “developing relationship” with Gazprom-Rosneft, with Iran, the relations with Europe are conditioned by the EaEU, is very “busy” for going to Davos, etc.

While Armenia needs a Big turnaround: a political process that will take out the country from these inner and outer handcuffs and will allow to take advantage of the historic opportunities that are opened in the west and south, and to conduct socio-political and economic systems fundamental reforms by sending to the landfill all that is no longer viable.  Is the current government of Armenia the right “engine” that is capable of conveying an adequate impulse to the state apparatus?  Unfortunately, this question still remains among rhetorical questions.  The same, unfortunately, regarding the political spectrum.  While the time has started the countdown.  Time for all of us.

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