Armenia's 2.5 Billion Budget for 2008 – A Realistic One

Traditionally, the amount of attention given to the State Budget in Armenia is nil. This important document, which sets out exactly how the country will develop in the next year, defines the mechanisms of how the state policies and activities will impact every single citizen in the country, is usually presented as an indecipherable book of figures, which is hardly ever explained to the average citizen. This year however, everything changed with the sensational announcement of Prime Minister Serge Sargsyan: the state budget will be 2.5 billion dollars, which is nearly double of the state budget in 2007.

[September 17, 2007 |Lragir]It became known from Serge Sargsyan’s speech a few days ago that the Armenian government is going to present a draft budget of 2.5 billion dollars to the National Assembly for 2008. It is about 1.5 times bigger than the budget of 2007. The first question that occurs after hearing this number is where the government’s ambitions come from. The question certainly has an answer that appears first: Serge Sargsyan desires to become president of Armenia in 2008, and a state budget of 2.5 billion dollars is an excellent election campaign for the prime minister aspiring to presidency.

As my collegue Gegham Vardanyan, accredited journalist in the NA noted, that it had seemed as though Serge Sargsyan had come to the NA that day only to announce this figure, and a couple of others along the way: the military budget planned for 2008 will be equal to that of Armenia’s state budget in 1998 (which means something around 400 million dollars), and the claims of Azerbaijan to make their military budget equal to the total state budget of Armenia have failed. The last one sounds childish for a Prime-Minister and former Defense Minister to announce if you ask me, but oh well!
There have been a number of publications in the newspapers, as well as the blogosphere discussing the unexpected figure. Despite the Prime-Minister’s words, that he is not and adventurer, and the budget is a realistic one, nobody seems to have taken it seriously. The 2008 Presidential Election Monitor blog, for example, has seen it as the start of the pre-eleciton campaign.
Despite the analyses in the media and the widespread scepticism, I find this article in worth every attention, as it steps behind the curtain of disbelief, and tries to see what will happen if the budget is indeed a realistic one, and if, as the Prime-Minister noted, there is a need to increase the state revenues by acheiving almost a two-fold increase in tax revenues.

The point is that with the methods and approaches of tax collection the so-called battle against black economy will clamp down on the retailers rather than the owners of markets, and after paying the last thing they have the independent small and medium-sized businesses which are not in the domain of any oligarch will be unable to bear the tax load any more and will have to sell their businesses to the oligarch or make an arrangement with them to work under the protection of that particular clan. It means that any such performed budget will push Armenia closer towards a clannish economy, and one day the society will wish it had no budget and trouble.

Armenia-Turkey Relations: is there anything to be done?

While the lingering bitterness of the 1915 Armenian Genocide underlies much of the tension between the modern states of Armenia and Turkey, several key factors have served to exacerbate relations between the nations over the course of the ensuing century[1]. Throughout the Cold War the Armenia – Turkey border has been the meeting point of Soviet and NATO forces and the fact that it must be closed forever has become a fact of life for both societies throughout the past century. The fact that it was open for a short while only to close again in 1993[2] as part of Turkish sanctions[3] against Armenia and its continuous support of Turkish ally Azerbaijan, with which Armenia is engaged in what seems like an endless conflict over Nagorno-Karabakh independence, has further strengthened the perception that the border will never be opened again among Armenians. In fact, not only Armenian observers, but also official Baku, Heydar Aliyev in particular have claimed more then once, that Baku holds the key to Turkish-Armenia relations[4].

From the Turkish perception on the other hand, it must be noted, that in the 1970s, a guerrilla organization, calling itself the Armenian Secret Army for the Liberation of Armenia[5], took to assassinating Turkish diplomats in several European countries. These killings contributed to stoking resentment of ethnic Armenians among Turks, while inciting nationalistic sentiment in Turkey, a feature of the state reflected today in its persistent campaign to deny or rationalize the 1915 massacres of Armenians. The 2007 assassination of Armenian intellectual Hrant Dink by a Turkish nationalist, and the ensuing scandal in which his killer was exalted as a hero by some government officials while in police custody[6], served as a stark reminder of just how egregious the historical-political tensions remain even today.

Generations after generations have grown with the mentality that the two nations are the deadliest of enemies, and nothing has been undertaken to update the mindsets of the two nations and bring them in sync with the current realities, which are: Armenia and Turkey are neighbor states, and will remain so for the centuries to come. In the Globalized world, where international efforts to face the Millennium Challenges are atop political agenda of most powerful states; where human value and democracy have been declared as the leading principles not only by the international community, but also and especially by the Modern Turkish and Modern Armenian states; the only way forward for all the states in the South Caucasus, the gateway to the island of peace, democracy and prosperity – the European Union, is cooperation, dialog and mutual understanding. Recent EU accession talks with Turkey[7] have highlighted the need for improved relations between Turkey and Armenia and a variety of recent geopolitical developments have put pressure on the two countries to resolve their differences[8]. Official efforts to normalize relations between Armenia and Turkey have not resulted in any significant progress towards a border re-opening[9].

It is mostly businessmen on both sides of the border, especially in the regions of Kars in Turkey and Shirak in Armenia, who speak about the importance of border opening, plus some NGOs, who are inspired by a recent round of grants from the Eurasia Foundation(which is naturally pushing for US interests in the region). On the whole however, we have been seeing the negative attitudes grow in both societies especially since the assassination of Hrant Dink. Today more and more often we are seeing publications about the dangers Turkey represents for Armenia, like the one about Dr Khachik Ter-Ghukassian, where in an interview with the PanARMENIAN.Net the Professor of International relations and politics of the Universidad de San Andrés in Buenos Aires is looking at the military-strategic partnerships Turkey is developing with Georgia and Azerbaijan and shifting the focus in its foreign policy to Northern Iraq.

If Turkey’s succeeds in realizing its plans Armenia will be isolated from the world, according to him. “Curiously enough, such state of things is not convenient for the U.S. which insists on opening of the Armenian-Turkish border. However, normalization of relations without preconditions is a dangerous tendency. Turkey doesn’t open the border proceeding from political reasons: the Nagorno Karabakh conflict, the Armenian Genocide and absence of fixed border with Armenia. The only legal basis for demarcation of borders is the Sevr Treaty. No agreement signed after Sevr, namely the Kars and Moscow treaties, do not have juridical effect, since the signatory powers stopped their existence as elements of international law. The Sevr Treaty was signed August 10, 1920. Borders with independent Armenia had to be marked by a neutral mediator, namely the United States, according to it,” he said.

“At that we should not forget that Turkey has always been the biggest danger for the Armenian people. This opinion should be shared by the whole nation, both in Armenia and Diaspora. On the other hand, opening of borders can tell on Armenia’s economy. Georgia, where the local industry was destroyed because of the abundant flow of cheap Turkish goods, can serve as an example. Certainly, Armenian economy can’t compete with the Turkish, but we will have an outlet to the world, at least. Although, we are not ready to make a reality of the scenario we will be offered,” he said.

Casting a sober view on the latest developments, I have to acknowledge, that all the beautiful talk about neighborhood, EU integration, possibility to coexist peacefully together and to mutually benefit from bilateral trade seem to fly out of the window once you consider all the latest developments in the region and growing tension not only between the main Caucasian states: Armenia, Georgia, Azerbaijan, but also big boys like US, Russia, EU, NATO, Turkey and Iran. So is there anything to be done? Or do we really need to do anything? Today, as I’m writing these lines, I am becoming more and more pessimistic. Turkey indeed represents the greatest danger for Armenia, and even my open-mindedness and unbreakable belief in the importance of Western vector of development in Armenian foreign policy and support for growing EU/NATO integration don’t seem to help here.



[1]Small Nations and Great Powers: A Study of Ethnopolitical Conflict in the Caucasus”, By Svante E. Cornell, Published 2001, Routledge, ISBN 0700711627, Page 302-303


[3] “Central Asia and the Caucasus: transnationalism and diaspora” By Touraj. Atabaki, Published 2005 Routledge, ISBN 0415332605, Page 89

[4] “Small Nations and Great Powers: A Study of Ethnopolitical Conflict in the Caucasus”, By Svante E. Cornell, Published 2001, Routledge, ISBN 0700711627, Page 304

[5] Minorities in the Middle East: a history of struggle and self-expression, By Mordechai Nisan, Published 2002, McFarland & Company, ISBN 0786413751, Page 177


[7] “Turkey and the Eu: An Awkward Candidate for EU Membership?”, By Harun Arikan, Published 2003, Ashgate Publishing, Ltd., ISBN 0754634337, Page 122

[8] “Turkish Foreign Policy in an Age of Uncertainty”, By F. Stephen Larrabee, Ian O. Lesser, Published 2003, Rand Corporation, ISBN 083303281X, Page 106

[9] “Small Nations and Great Powers: A Study of Ethnopolitical Conflict in the Caucasus”, By Svante E. Cornell, Published 2001, Routledge, ISBN 0700711627, Page 304


Looking at the Foreign and Economic policies carried out by President Robert Kocharian’s administration it’s hard to even think about the possibility of Armenia’s accession to NATO. However, the question was asked to the President at a press conference yesterday, and the response was:

 “The issue of Armenia’s accession to NATO is not on the Armenian foreign policy agenda presently, but we are willing to develop the cooperation with this structure. We already have the Armenia-NATO Individual Partnership Action Plan.
In joining a military bloc, Armenia should consider whether its security level is increased, Kocharian said. He pointed out that Armenia’s accession to NATO will reduce the country’s security level and that the current format of relations between Armenia and NATO is the best one.” /ARKA, 26 June, 2007/

Of course! That’s all I can add!

Nagorno Karabakh Progress?

Now that the parliamentary elections are behind us the international community is once again turning to what is perpaps the number one problem in the regions – unresolved frozen conflicts and in particular, Nagorno Karabakh, says Onnik Krikoryan looking at the latest developments on way of conflict resolution examining RFE / RL, and Eurasia Daily Monitor.

No surprise to discover that mediators from the Organization for Security and Cooperation in Europe (OSCE) were in Yerevan earlier in the week before moving on to Baku. According to RFE/RL’s report posted on the day of their departure, the OSCE Minsk Group mediators have said they hope that the Armenian and Azerbaijani presidents will meet on the sidelines of a summit to be held in St. Petersburg on 10 June. Continue reading “Nagorno Karabakh Progress?”

May 9th – the day of victory!

My grandfather who fought his way all the way to Berlin passed away last year – for as long as I remember 9th of May in my perception was the day of my grandfather: God Bless you wonderful man! I used to think – what kind of a country USSR must have been if it could motivate this brave Armenian – my grandfather, and hundreds of thousands of others to get to Ukraine, Poland and all the way to Berlin to fight Nazism – so far away from their home.
David_Sand says, very rightly, this was not the victory of the USSR, this was the victory of the people of USSR. I’ll add to that – this was the victory of all humanity! Today I want to join David_Sand, Dilanyan, Kornelij Glas in greeting the humanity on the day of this great victory.
Perhaps a greater motive for celebration today is that “On May 9 Armenia and Nagorno Karabakh mark not only as V-Day in the World War II, but also as Shoushi Liberation Day”/PanARMENIAN.Net/ and Uzogh says the fact, that a military parade of NKR Defense Army will be held on Revival Square of Stepanakert is highly symbolic today.

Azerbaijani Military: More Money, More Problems?

Yandunts has two articles (both first published in the Armenian Reporter) on the Azerbaijani Military, discussing the economy behind the Azerbaijani army, Azerbaijani presiden Ilham Aliyev’s promises that “his country’s military spending would soon surpass Armenia’s total state spending” and looking at possible problems in the Azerbaijani army, which the blogger claims are the result of “more money, more problems“:

[…]The Azerbaijani government has repeatedly threatened a new war against Armenians. In the last few years, its rhetoric has also been matched by growing military spending and some weapons acquisition. Armenians are taking notice. Armenia’s National Security Strategy identifies Azerbaijan as the most imminent external threat to the country’s security.[…]

[…]The purpose of spending over $2 billion in four years – other than Azerbaijani President Ilham Aliyev’s oft-stated desire to overtake Armenia’s total state spending – must be to improve the discipline, sense of purpose and fighting efficiency of the armed forces. Azerbaijani officials and sympathetic observers boast that such improvements have taken place.[…]

Sefilyan's pre-trial custody extended without any concrete evidence produced against the former Karabakh commander

CRD / TI Election Monitor 2007 reports that “a Yerevan court has rejected the appeal of Lebanese-born former Karabakh commander Zhirayr Sefilyan who was arrested by National Security Service (NSS) agents in December.” Sefilyan’s pre-trial custody has been extended without any concrete evidence produced against him. Further on the Monitor reports:

[…]A vocal opponent of any concessions in negotiations to resolve the conflict between Armenia and Azerbaijan over the disputed territory of Nagorno Karabakh, Sefilyan stands accused of plotting the violent overthrow of the Government during the May election.
No concrete evidence has been produced, and Sefilyan remains in pre-trial custody that was recently extended. His supporters and opposition activists allege that Sefilyan’s detention was politically motivated and because he threatened to prevent any electoral fraud during the election.[…]

Bekaisa has re-published a highly emotional letter disseminated via the Armenian Dispute Club yahoo group. Here are some extracts (translated):

[…]Jiro will be kept in the KGB for two more months… then it will probably be extended by two more months and so on and so forth…
About 30 people were present in front of the court building with a couple of [protest] posters. 50% of those people are usually present in all actions [demonstrations] of this type! And a couple of people from Jiro’s batallion…[…]
Passers by were looking at the newly rennovated building of the court and probably feeling very happy that they have nothing to do with this building. And of course they would do everything not to have anything to do with demonstrators like us as well!
[…] But don’t these passers by worry at the perspective, that tomorrow they and their children will be put there too [into the court]!

Kornelij's election leaflet #2

This time Kornelij’s election leaflet pays attention to the following news (translated):

  1. Gagik Tsarukyan has been finally and unconditionally elected the head of “Prosperous Armenia”.
  2. “Prosperous Armenia” now has 500 branches and 370 thousand members. […] I have heard some rumours about the methods of attracting new members. For example – PA fixes the elevator in an apartment house – and in exchange the inhabitants of the house are obliged to enter the party with exalted outcries. Considering the condition of elevators and other components of the housing services in the country I predict the PA will soon have a million members. […](Please note, that ArmRusGazProm has dug some holes in front of our house last year and doens’t seem to be willing to fix them. So – we’re waiting for you, gentlemen!!!)
  3. Yet another general, Sedrak Saroyan – will run for Parliament, probably on the side of the Republican party. It seems the Azerbaijani dream will come true after all – the Armenian army will soon be decapitated.
  4. The Minister of environment Vardan Aivazyan intends to help his Republican Pary – he has promised to organize a demonstration in the near future. Aivazyan is the co-cair of the union of Georgian Armenians, which turns out to be asurprizingly large organization – the party has 30000 registered members. I am starting to doubt the official demographic statistics of the country and think that it should be increased by 20%.
  5. has launched a separate section dedicated to the elections. On exclusive materials on the election theme have also started popping up, and it seems that their blog has also been reanimated.

Yet Another Armenian Soldier Killed by Azeri Sniper

Armenia Blog reflects on the recent killing of the Armenian soldier, major Ervand Pashikyan (b. in 1958) by an Azeri sniper, and finds it especially disappointing that “virtually nothing is done after such killings: a few words condemning the act here, a few harsh words there, and that’s it. Then again, short of an all-out war, what can be done? Obviously, we have to involve the international community, but all too often these soldiers get forgotten shortly after all is said and done.”

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