Groong: Review & Outlook. February 6, 1998

POLITICAL CRISIS IN ARMENIA
Armenia faces its first major post-Soviet leadership change

By Hratch Tchilingirian

Weeks of political crisis in Armenia took a sharp turn when President
Levon Ter-Petrosian announced his resignation on February 3. Forces
opposed to Ter- Petrosian's compromise stance on Nagorno-Karabakh
appear set for ascendancy in Armenia for some time.

The roots of the dispute which led to Levon Ter-Petrosian's
resignation as president lie in his decision last autumn to back the
proposals of the OSCE Minsk Group for a resolution of the conflict
over Nagorno-Karabakh. The Minsk Group proposes a 'phased' solution,
which calls for the Karabakh Armenians' immediate withdrawal from
those Azerbaijani territories outside Nagorno- Karabakh which they
currently occupy, prior to any discussion of Nagorno- Karabakh's
political status.

These proposals are unacceptable to the Karabakh Armenians, who argue
that:

-- acceptance of the Minsk Group plan would increase the prospects for
renewed hostilities, by disrupting the current military balance
between the Armenian and Azerbaijani forces and failing to require
security guarantees from Baku;

-- Baku would have no incentive to make concessions to Nagorno-Karabakh
once Azerbaijani control of the occupied territories is restored and
might be tempted to re-start hostilities; and

-- Azerbaijani promises to grant maximal autonomy to Nagorno-Karabakh
are questionable, given that Azerbaijan is a unitary state.

The Karabakh Armenians and their allies in Armenia insist instead on a
'package' solution, whereby all issues pertaining to the resolution of
the conflict are discussed at once without preconditions. The Karabakh
Armenians also reject any subordination of Nagorno-Karabakh to
Azerbaijan.

When Ter-Petrosian appointed Robert Kocharian, formerly the president
of the unrecognized Republic of Mountainous Karabakh, as Armenian
prime minister last March, Ter-Petrosian appeared to be adopting a
tough line on the issue in order to shore up his domestic position.
However, by autumn, Ter-Petrosian appears to have concluded that the
damage being done to Armenia's economic development and international
standing by the continuing stalemate over Nagorno-Karabakh required
Armenia to make concessions. Ter-Petrosian's reversal brought him
into conflict with Kocharian, who is backed by a formidable coalition
comprising the 'power ministers' (especially Defence Minister Vazgen
Sarkisian), opposition factions and the Karabakh leadership.

Escalation of Crisis

The anti-Ter-Petrosian political avalanche gained momentum after the
January 7-8 meeting of the Security Council, which was attended by
leading Karabakh officials. Subsequent to the Security Council
meeting, the exacerbated differences over Nagorno-Karabakh were
exposed to the public. Tensions rose further when two senior security
officials and a pro-Ter-Petrosian deputy were attacked in separate
incidents. Yerevan Mayor Vano Siradeghian -- who leads the ruling
pro-Ter-Petrosian Armenian Pan-National Movement (ANM) -- implied that
the Kocharian government may have been behind the attacks. For his
part, Defense Minister Sarkisian alleged that the ANM had staged the
incidents to create a pretext for Kocharian's sacking. On January 28,
Sarkisian said that Ter-Petrosian should change his Karabakh policy or
a new leader would be found.

A wave of rapid developments escalated the situation into a political
crisis:

-- All major opposition parties called for Ter-Petrosian's resignation,
including the Communist Party, National Democratic Union, the banned
Armenian Revolutionary Federation (Dashnaks); Self-Determination
Union, Constitutional Rights Union, and the Union of Armenian
Intellectuals.

-- A new National Council, comprising over 500 prominent intellectuals
and public figures, urged Ter-Petrosian's immediate resignation and
the holding of early presidential elections.

-- Several of Ter-Petrosian's key allies resigned, including
Siradeghian, Foreign Minister Alexander Arzumanian and Central Bank
chief Bagrat Asatryan.

-- The leader of the paramilitary 'Yerkrapah' parliamentary faction,
Armenia's most influential political faction, said that its forces had
switched their support from Ter-Petrosian to Kocharian.

-- Forty of the pro-Ter-Petrosian 'Republican' bloc's 96 deputies
defected to pro-Kocharian groupings, leaving Ter-Petrosian with 56
votes in the 190-seat parliament.

-- The security forces arrested over 25 armed militiamen suspected of
involvement in the assassination attempts, heightening the
conspiratorial mood.

Nevertheless, Ter-Petrosian's resignation came sooner than
expected. He said that he had decided to resign in order not to
destabilize the country. Sacking Kocharian would have threatened to
make Armenia ungovernable. However, beyond the Nagorno-Karabakh
dispute, Ter-Petrosian's political weakness stemmed from, and the
movement against him built upon, several longer-term factors:

-- Ter-Petrosian never recovered political legitimacy after the 1996
election, despite recent efforts to regain public confidence and widen
his support base. In addition, corruption among government officials
is believed still to be rampant, despite promises to curb it.

-- Economic growth has been slowing, inflation rising and dependency
on foreign aid and loans increasing. Social conditions remain poor for
much of the population, heightening popular dissatisfaction with
Ter-Petrosian and compounding the impression of national weakness
created by his stance on Nagorno-Karabakh.

Election outlook

Ter-Petrosian's resignation was approved by parliament, in accordance
with the constitution, by 111 votes to 36 on February 4. Deputies
also accepted the resignation as parliament speaker of Babken
Ararktsian, another Ter-Petrosian loyalist. In Ararktsian's absence,
Kocharian was named acting president, pending presidential elections
expected on March 16.

Ter-Petrosian's speedy resignation and the subsequent constitutional
conduct of all actors have prevented any clashes or internal
destabilization. While the political situation remains tense, the
country is likely to be able to move to early elections without a
major crisis. Kocharian has given assurances that the polls will be
free and fair. In the short term, Kocharian is likely to seek to
restore popular confidence in the government, probably by reinstating
the ARF-Dashnak Party, releasing political prisoners and opening
dialogue with all political factions. Economic reform efforts are
likely to continue. However, a non-compromising position on
Nagorno-Karabakh will ensure that the economically damaging Turkish
and Azerbaijani blockades of Armenia remain in place. Moreover,
prospects for foreign participation in Armenia's latest privatization
drive may be undermined by the existing political situation.

Nagorno-Karabakh will be the most important election issue. It
provides a popular and unifying theme for an opposition which has
otherwise failed to develop a significant agenda. Only candidates who
share the Nagorno-Karabakh policy of Armenia's new leadership are
likely to have a chance of electoral victory.

Kocharian appears unlikely to be able to run, as his Armenian
citizenship is questionable and he fails to meet the constitutional
ten-year residency requirement. Instead, Kocharian seems likely to
ally with Manukian, who on February 5 confirmed his intention to
stand. An alliance with Kocharian would boost Manukian's already-good
prospects of winning the office he believes has rightfully been his
since 1996. Kocharian and Manukian have worked together in the past
and could possibly form a strong governing team. Manukian seems
likely to face Communist leader Sergei Badalian, plus possibly Pariur
Hairikian and -- if the party is reinstated and its prisoners released
-- a ARF- candidate, probably Vahan Hovanissian. Ter-Petrosian has
indicated that he will not seek re-election.

Nagorno-Karabakh Impasse

Both Acting President Kocharian and Azerbaijani President Heydar
Aliyev have expressed their continued support for the ceasefire in
Nagorno-Karabakh and efforts to find a peaceful settlement to the
conflict. Interested international parties have also expressed hopes
that the political turmoil in Armenia will not disrupt the peace
process. However, a meeting of the Minsk Group co-chairmen scheduled
for February 4 was postponed.

There are Armenian fears that Baku might use the current crisis to
launch military action, not least because it was a leadership crisis
in Azerbaijan that allowed major Armenian advances in 1993. Aliyev
may also be tempted to step up his nationalist rhetoric in advance of
Azerbaijan's October presidential election. However, the factors that
have maintained a 'cold peace' since 1994 -- the balance of military
power and Baku's need to maintain conditions conducive to international
oil deals -- continue to hold. Moreover, since last August Armenia has
a mutual defense treaty with Russia.

A peaceful transition of political power currently appears likely.
The new leadership may bring more democratic politics to Armenia.
However, domestic politics in both Yerevan and Baku will probably
ensure that the Nagorno-Karabakh peace process is effectively stalled
until at least late this year.

* Hratch Tchilingirian is a researcher in sociology, London School of
Economics and Political Science.