How Kocharyan Came to Power
Robert Kocharyan was Armenia’s second President, having served two consecutive terms between 1998 to 2008.
Following the resignation of Levon Ter-Petrosyan on February 3, 1998, demanded by Defense Minister Vazgen Sargsyan, Minister of Interior and National Security Serzh Sargsyan and Prime Minister Robert Kocharyan, the first early presidential election of independent Armenia was held 40 days later on March 16. From among the three officials who forced Ter-Petosyan’s resignation, Robert Kocharyan became the unity candidate.
According to the Armenian Constitution passed in 1995, a presidential candidate was required to have resided in Armenia during the 10 years preceding the election and be a citizen of Armenia during those 10 years. Kocharyan did not meet these two requirements. Kocharyan was the Prime Minister and then President of Artsakh (Nagorno-Karabakh at the time) from 1992 to 1997. It was only in 1997 that Kocharyan moved to Armenia and held the post of Prime Minister until Ter-Petrosyan’s resignation. During the transition period leading up to the 1998 election, Kocharyan also served as Armenia’s Acting President.
Although there were discussions that Kocharyan may apply to the Constitutional Court to determine the constitutionality of his nomination, he never did for two main reasons. All the judges on the High Court had been appointed by Ter-Petrosyan, and it was highly likely that they could rule against Kocharyan’s participation. Also, there were rumors about the possible nomination of Gagik Harutyunyan, the President of the Constitutional Court at the time, in the upcoming presidential election. Kocharyan’s justification for running in the 1998 presidential election was the December 1, 1989 decision of the Supreme Council of the Republic of Armenia and Nagorno-Karabakh Autonomous Oblast (NKAO) Regional Council about the reunification of the NKAO with Armenia. However, Kocharyan’s argument had a major shortfall since it ignored the fact that Nagorno-Karabakh declared itself an independent state in September 1991 and held a referendum. Eventually, Kocharyan’s candidacy was approved by the Central Electoral Commission.
During the campaign period, it was evident that Robert Kocharyan and Karen Demirchyan, who served as the First Secretary of the Armenian Soviet Socialist Republic from 1974 to 1988, were the two frontrunners. In its final report, the OSCE Office for Democratic Institutions and Human Rights (ODIHR) observation mission stressed that the early presidential election did not meet the OSCE standards in the Copenhagen Document of 1990, to which Armenia had committed itself. During both rounds of the election, the observation mission documented widespread irregularities, including ballot box stuffing, voter intimidation, the presence of unauthorized persons inside the precincts and the counting places, as well as overcrowding of polling stations. Concerns were also raised over the voting of soldiers, since voting under the instruction of officers was observed during both rounds. It was because of these widespread irregularities that five opposition candidates, Karen Demirchyan, Vazgen Manukyan, Sergey Badalyan, Paruyr Hayrikyan and Davit Shahnazaryan issued a statement on the evening of March 16, even before the polling stations closed, stressing that the presidential election was neither free nor fair. Several hours later, two other opposition candidates, Ashot Bleyan and Vigen Khachatryan also joined the announcement.
A second round was inevitable, since Kocharyan secured 38% and Demirchyan 30% of the vote. The second round was held on March 30 and Kocharyan declared victory with 59% of the vote. On April 9, he was sworn into office. Kocharyan remains the only President of Armenia to have their election go to the second round, which happened again for his re-election in 2003.
First Major Challenge: October 27, 1999
Robert Kocharyan’s presidency witnessed two of the bloodiest events in Armenia’s post-independent history: the 1999 Parliament shooting and the crackdown on protesters following the 2008 presidential election.
On October 27, 1999, a group of eight armed men led by former journalist and former member of the Armenian Revolutionary Federation (he had been expelled from the party in 1992) Nairi Hunanyan, broke into the Parliament building while the government was holding a question and answer session and opened fire. Prime Minister Vazgen Sargsyan was the main target but seven others were killed along with him, including the Speaker of Parliament Karen Demirchyan, Deputy Speakers Yuri Bakhshyan and Ruben Miroyan, Members of Parliament Mikayel Kotanyan, Armenak Armenakyan and Henrik Abrahamyan and Deputy Prime Minister Leonard Petrosyan. On the same day as the killings, Garegin II was elected the 132nd Catholicos of All Armenians.
Although the country witnessed politically motivated killings before, not many could have imagined that terrorists would be able to freely access the country’s Parliament building. After forcing their way into the Parliament building, the terrorists demanded a meeting with President Kocharyan to discuss the fate of the nation, live access to national television and a helicopter. According to eyewitness accounts, the group wanted “to punish the authorities for what they did to the nation” and believed that “it was time to get rid of the bloodsuckers who were drinking our [people’s] blood.” According to similar accounts, Hunanyan hoped that their actions would garner popular support and, when journalists were being evacuated, he urged them to call on people to gather in front of the Parliament building. His expectations, however, were not fulfilled, and those who did gather near the Parliament were the relatives of those being kept hostage in the building.
All those who survived the attack were held hostage for several hours and were released the following morning. Official sources did not confirm the death of the country’s leadership within the first five hours after the attack, and the country was in an information vacuum. The bodies of the killed were taken out of the Parliament building only late in the evening. Negotiations with the group of armed men continued until morning and culminated in a meeting between President Kocharyan and Nairi Hunanyan [no information was released about the meeting]. The terrorists surrendered and were transferred to the National Security Service building after they were guaranteed that none of the members of the armed group would be sentenced to death.
The following day, there was a real threat that the war in Nagorno-Karabakh may resume. Azerbaijan, taking advantage of the chaotic situation in Armenia, started moving its troops. However, Defense Minister Vagharshak Harutyunyan’s call with his Azerbaijani counterpart Safar Abiyev put an end to the danger and prevented further unwanted developments in the country that was already in turmoil. Three days after the tragic event, Kocharyan addressed the nation, calling the attack a coup attempt.
The first President Levon Ter-Petrosyan, who was forced to resign over a year before the attack, issued a statement calling for unity.
The investigation of the attack lasted for over a year and the trial began in January 2001. After three years of court hearings, on December 2, 2003, Nairi Hunanyan and five other members of the armed group were sentenced to life imprisonment and Hamlet Stepanyan was sentenced to 14 years in prison. Electrician Norayr Yeghiazaryan, who was part of the group, was found electrocuted in his cell in Nubarashen Penitentiary in 2000 when the investigation was still ongoing. Although the official conclusion said that the attack was a terrorist act aimed to seize the power, there was a strong belief among the public that October 27 was not a coup attempt but rather a premeditated political assassination. The investigation and then the trial did little to clarify whether the group acted alone, what powers could be behind the attack or their ultimate motivations.
Since the court verdict, two of the members of the group have died; Vram Galstyan, who was sentenced to life imprisonment, committed suicide in 2004 and Hamlet Stepanyan died in unknown circumstances in his cell in 2010. In the years following the trial, several of the witnesses involved in the case have also died in strange circumstances. Rosa Hovhannisyan, who was the nurse of the National Assembly at the time of the attack and a key witness in the case, died in a car accident in 2004 in the U.S. Hasmik Abrahamyan, an employee of the protocol department of the National Assembly was found hanged in the Parliament building in 2004. Former Member of Parliament Mushegh Movsisyan, who was briefly detained as part of the October 27 case, died in a car accident in 2004 on the Aparan-Yerevan highway.
Protest Movements
The 2003 Presidential Election and Protests
The 2003 presidential election was the first one since the 1999 assassination of the leading figures of Armenia’s political establishment.
Under Armenia’s Constitution, a presidential candidate must win over 50% of the votes cast for all candidates to be elected in the first round. Otherwise, the two leading candidates take part in a second round two weeks later. During the 2003 presidential election, none of the nine candidates won an outright majority during the first round of voting held on February 19. The two leading candidates were incumbent Robert Kocharyan and opposition candidate Stepan Demirchyan. The second round was held on March 5 and Kocharyan was declared the winner with 67.8% of the vote. Stepan Demirchyan, the leader of the People’s Party of Armenia, is the son of the late Karen Demirchyan, the Speaker of Parliament assassinated on October 27.
In its final report, the OSCE/ODIHR observation mission confirmed that the election fell short of international standards for democratic elections and “serious irregularities, including ballot box stuffing” were registered. Demirchyan, who according to the Central Election Commission’s (CEC) official results received only 32.5% of the vote, started demonstrations with all 16 opposition political forces. Protests continued until April 2004 and culminated on April 13, when police surrounded protesters demanding Kocharyan’s resignation on Baghramyan Avenue and dispersed a crowd of 3,000 demonstrators using excessive police force. Based on eye-witness accounts, the police not only used water cannons and stun grenades but also beat protesters with batons and shocked them with electric prods. A briefing paper by Human Rights Watch thoroughly outlines the scope of human rights violations committed by Armenian authorities during the protests.
In the meantime, Demirchyan also filed an appeal with the Constitutional Court to challenge the results of the election, alleging violations such as ballot box stuffing and voter intimidation. Although the Court did not invalidate Kocharyan’s victory in the election, it did recommend the National Assembly to hold a vote of confidence within the following year, which never happened. The fact that the vote never happened was the main reason that protests gained momentum not only in Yerevan but also in other major cities and communities across the country, but it was doomed to be yet another failed revolution.
March 1, 2008
The 2008 presidential election ended Robert Kocharyan’s decade-long presidency, whose two-term limit had expired, and marked the beginning of third President Serzh Sargsyan’s administration. The transition, however, did not happen smoothly and was accompanied with protests, violent clashes between citizens and security forces, and eventually came to be remembered as one of the darkest pages of Armenia’s post-independence history.
First President Levon Ter-Petrosyan, who was not seen in the political arena since his resignation in 1998, gave a public speech on Armenia’s Independence Day on September 21, 2007, sharply criticizing the Kocharyan administration as a “criminal regime” that tolerated widespread corruption in the country. A month later, Ter-Petrosyan announced that he will run in the 2008 presidential election. Sargsyan, who was the Prime Minister at the time, and Ter-Petrosyan were the two obvious frontrunners from the list of nine candidates that were registered. The election was held on February 19, and Sargsyan was declared the winner with 52.8% of the vote. Ter-Petrosyan came in second with 21.5%. However, Ter-Petrosyan accused authorities of falsifying the results and declared that he won the election. There were other claims of electoral fraud and abuse of administrative resources as well. According to the U.S. Embassy in Armenia, Ter-Petrosyan had actually secured between 30% to 35% of the vote, which would have posed a need for a runoff round.
The interim report issued by the International Election Observation Mission, comprising the OSCE/ODIHR, the OSCE Parliamentary Assembly, the Parliamentary Assembly of the Council of Europe and the European Parliament (EP), stated that the election “was administered mostly in line with OSCE and Council of Europe commitments and standards.” The final report by the OSCE/ODIHR election observation mission, however, noted that they witnessed serious challenges after the election day that “displayed insufficient regard for standards essential to democratic elections and devalued the overall election process.” The report went on to say that “there was an evident lack of public confidence in the election process,” and that “the vote count demonstrated deficiencies of accountability and transparency.”
Starting from February 21, opposition supporters led by Ter-Petrosyan launched peaceful, around-the-clock demonstrations boycotting the election results. The rallies were mainly held at Freedom Square in Yerevan (also known as Opera Square) and lasted for nine consecutive days. On February 27, the Armenian police issued a statement urging an end to the unauthorized rallies, saying that they intend to protect the constitutional order in the country. Early on the morning of March 1, police stormed Freedom Square to conduct a search, with the justification that they received information that demonstrators had been arming themselves in preparation for committing acts of violent protest during the day. Over 30 people were reportedly injured because of the police action. Unable to gather at Freedom Square, many people started assembling near the Alexander Miasnikyan monument near Yerevan City Hall.
An aggressive police action to disperse the protesters near Miasnikyan’s statue began at around 9:30 p.m. Approximately an hour later, as demonstrators kept gathering, Kocharyan declared a 20-day State of Emergency (SOE) under which rallies and public gatherings were prohibited in the country. He then ordered security forces to clear the demonstrators, which led to a series of tragic incidents that left ten people dead [eight civilians and two national security officers] and more than 300 injured. Nikol Pashinyan, who was one of the leaders of that demonstration and the chief supporter of Ter-Petrosyan at the time, on several occasions stressed that Robert Kocharyan and Serzh Sargsyan should be held accountable for the killings on March 1.
Thus far, the European Court of Human Rights (ECtHR) has issued 15 judgments concerning the March 1 unrest (the most recent on September 21, 2021), requiring the Armenian government to provide over €135,000 in compensation to victims and their families.
Overthrowing the Constitutional Order
Following the Velvet Revolution, when Pashinyan came to power, he promised to reopen the investigation into the March 1, 2008 events.
In the summer of 2018, Robert Kocharyan was arrested and accused of overthrowing the constitutional order in the aftermath of the controversial 2008 presidential election. Similar charges were brought against the former Deputy Defense Minister Yuri Khachaturov and former Chief of General Staff of Armenia’s Armed Forces Seyran Ohanyan. The former Presidential Chief of Staff Armen Gevorgyan was accused of assisting in the overthrow of the constitutional order. According to the Special Investigative Service, the four men illegally mobilized Armenian Armed Forces against peaceful protesters and opposition supporters who were protesting the results of the 2008 presidential elections in the capital. All four denied the accusations levelled against them as politically motivated.
During an interview with Yerkir Media back in 2018, when Kocharyan was asked why he implemented a SOE on March 1, he said that it was declared only when a police captain had already died, when dozens of cars had been burned, barricades had been constructed and security forces had been attacked with molotov cocktails. Not declaring a state of emergency would have been seen as inaction by the President, he claimed. “It was a direct threat to the constitutional order,” said Kocharyan.
Kocharyan’s trial began in May 2019 and lasted for about two years until March 2021, when Armenia’s Constitutional Court declared that Article 300.1 of the Criminal Code (Usurpation of State Power), under which Kocharyan was being tried, was in contradiction with Articles 78 and 79 of the Constitution and thus unconstitutional. All four former high-ranking officials, including Kocharyan, were acquitted and cleared of all charges in relation to March 1.
High-Profile Murders and Attempted Murder
Henrik Khachatryan
On August 6, 1998, Armenia’s Prosecutor General Henrik Khachatryan was murdered in his office. Prosecutor Aram Karapetyan was found dead along with Khachatryan. The Prosecutor General’s murder marked the beginning of a set of high-profile murders throughout Kocharyan’s presidency.
Khachatryan was a renowned lawyer and was appointed to the post of Prosecutor General over a year before his murder. Prior to the killing, Khachatryan had announced that revelations about scandalous murders committed in the early 1990s would be forthcoming. He used to hold regular press conferences and brief journalists about ongoing investigations. President Kocharyan was quick to address the nation and said he was deeply shaken by the tragedy and promised a full investigation. The official conclusion was that Karapetyan killed the Prosecutor General and then committed suicide. There was no explanation of any motive for the murder.
Vahram Khorkhoruni
Several months after Khachatryan’s killing, in December 1998, Deputy Defense Minister Vahram Khorkhoruni was shot dead (seven times) in front of his apartment building. He was an influential figure in the early years of Armenia’s independence and held several strategic positions. Khorkhoruni worked at the Ministry of Internal Affairs, coordinating the fight against organized crime. During the First Nagorno-Karabakh War, he was in Stepanakert as the Warden in charge of establishing and maintaining order in the rearguard. After his transfer to Armenia, Khorkhoruni was the Chief of Military Police and later was assigned to the post of Deputy Defense Minister as one of Defense Minister Vazgen Sargsyan’s trusted individuals. Several weeks after Khorkhoruni’s killing in mid-December, many in the country were convinced that his murder was politically motivated.
Artsrun Margaryan
Two months after Khorkhoruni’s murder, in February 1999, Deputy Minister of Internal Affairs and National Security Major-General Artsrun Margaryan was found dead in an abandoned area near the Nor Hachn community. He sustained two fatal gunshot wounds around his chest and head. Similar to Khorkhoruni, Margaryan was also among the trusted individuals of Vazgen Sargsyan. In the period following Levon Ter-Petrosyan’s resignation, Margaryan had become a target of a failed assassination attempt. In January 1998, a group of unidentified people shot at Margaryan’s legs. At the time, no one really understood who was behind the shooting or what the motivation was behind their actions. Some believed that the attack against the influential military commander was aimed at further destabilizing the already-teetering situation in the country. The case regarding the assassination attempt was closed several months later without answering any of the pressing questions.
Two of Margaryan’s bodyguards, Arsen and Armen Khachatryan, were arrested on suspicion of killing the Deputy Minister but were released five months later. The official conclusion was that Margaryan committed suicide. After the October 27 parliament shooting, people close to Prime Minister Vazgen Sargsyan were convinced that the killings of Vahram Khorkhoruni and Artsrun Margaryan were not two separate instances but rather were linked by a single chain, aimed at neutralizing Sargsyan’s trusted circle.
Tigran Naghdalyan
Tigran Naghdalyan was a journalist and Chairman of the Public Television and Radio when he was killed in 2002 in downtown Yerevan. He was shot seven times and died in hospital several hours later. It was believed that Naghdalyan was part of President Kocharyan’s inner circle and one of his most trusted individuals. He was also a notorious propagandist of Kocharyan’s policies, whose commentary regarding political processes was perceived as the official position of the President himself. Prior to his appointment as the Chairman of the Public TV, Naghdalyan was assigned to the post of Executive Director of the National Television. At the time, Kocharyan was still the Prime Minister and the 1998 presidential election was around the corner.
A year after Naghdalyan’s assassination, John Harutyunyan and Armen Sargsyan were found guilty of his murder and were each sentenced to 15 years in prison. Sargsyan, the brother of former PM Vazgen Sargsyan, who was killed during the 1999 Parliament shooting, was believed to be the one who ordered the killing, while Harutyunyan was the one who executed it. One of the theories behind Naghdalyan’s murder was that it was politically motivated. It is noteworthy that, at the time of Naghdalyan’s killing, the trial of the armed men who stormed the Parliament building was underway and Naghdalyan was a key witness set to testify before the court. His testimony was of particular interest, since Sargsyan’s descendants claimed that the video footage from the chamber of Parliament from the day of the shooting was edited. This information was also confirmed by the additional examination conducted in Moscow.
Mark Grigoryan
In 2002, an unidentified person threw an explosive toward Mark Grigoryan, a well-known journalist and deputy director of the Caucasus Media Institute, causing serious injuries. The Police believed that the explosive was aimed at another person and that Grigoryan was wounded accidentally. Grigoryan, however, claimed that the assassination attempt was connected with the piece he was preparing at the request of a London-based media organization ahead of the third anniversary of the October 27 Parliament shooting. Later, Grigoryan explained that the reason was not that one article, but rather his journalistic activities in general. Following his assassination attempt, Grigoryan moved to London where he started working at the Institute for War and Peace Reporting and then at the BBC until 2014.
Poghos Poghosyan
In September 2001, Poghos Poghosyan (a member of the ARF) was found dead in the restroom of Aragast cafe (also known as Poplavok) in downtown Yerevan, shortly after President Kocharyan left its premises together with his entourage. According to eyewitness accounts, Kocharyan was leaving the cafe with renowned French-Armenian singer Charles Aznavour, when Poghosyan who was at the cafe with his friend Stepan Nalbandyan, approached the President’s entourage and greeted him with “Privet Rob” (Privet is an informal way to say “Hi” in Russian.).
Minutes after this encounter, Kocharyan’s bodyguards, among them Aghamal Harutunyan, also known as “Kuku,” stormed the cafe’s restroom where they allegedly beat Nalbandyan and Poghosyan. Harutyunyan was the only presidential bodyguard prosecuted in connection with the deadly incident and was eventually charged for involuntary manslaughter and given a 2-year suspended sentence. British citizen Stephen Newton, who was a guest lecturer at the Public Administration Academy in Armenia and was also at Poplavok that evening, witnessed the brutal beating of Poghosyan and Nalbandyan. Newton offered his testimony in a lengthy statement, but it was thrown out by the presiding judge of Harutyunyan’s 2002 trial because it was in English. The case was officially closed in 2002.
The case was reopened after the 2018 Velvet Revolution, when prosecutors decided to conduct a fresh investigation into Poghosyan’s death based on Newton’s testimony. The Court of Appeal approved the decision and sent the case back to the Court of First Instance.
Constitutional Referendum
The legitimacy of Armenia’s Constitution, which was adopted on July 5, 1995 through a nationwide referendum, was often disputed among certain political circles, with some claiming that it was adopted with widespread irregularities and endowed the president with too much power. The expert commission that drafted the Constitution consisted of 20 members, among them lawyers, philosophers, economists, politicians, academics and scientists.
When Kocharyan first came to power in 1998, reforming the Constitution was among the priorities he pledged to accomplish. In the same year, he even formed an expert commission that was tasked with working on the constitutional changes, but it was not until 2003 that the first attempt was made. The referendum, which was held in May 2003, did end up with the “Yes” side slightly edging out the “No” side, but the overall turnout did not meet the necessary quorum and the referendum failed.
During the 25 years of its existence, Armenia’s Constitution has been amended three times, twice through a popular referendum and once by the National Assembly. The first time was in 2005, when Robert Kocharyan was in the midst of his second term.
One of the justifications for the proposed referendum was that the Constitution that was adopted in 1995 had exhausted itself. The constitutional amendments significantly reduced the powers of the President and expanded the role of the National Assembly. Armenia became a semi-presidential republic. The President no longer had full discretionary power to appoint a Prime Minister and instead was obliged to hold consultations with parliamentary factions and appoint someone who enjoyed the confidence of Members of Parliament. The amended version of the Constitution also abolished the President’s unlimited authority to dissolve the National Assembly and defined a set of exceptional circumstances under which the President was authorized to make such a decision.
According to the 1995 Constitution, as well as the amended version, the Constitutional Court consisted of nine members, four of whom were directly appointed by the President and five by the National Assembly. The term of office was one of the significant changes that was made to the Constitution in 2005. Members of the High Court that were appointed before the 2005 referendum could hold office until the age of 70, while those appointed after it could hold office only until the age of 65.
And finally, it was the 2005 Constitution that lifted the ban on dual citizenship, imposed by the original document in 1995.
Parliamentary Elections
1999 Parliamentary Election
The Armenian Revolutionary Federation (ARF), which is one of the oldest Armenian political parties, established in 1890, and with a wide presence in Armenian diasporan communities and in Armenia, was banned in Armenia between 1994 to 1998 by personal decree of first President Levon Ter-Petrosyan. Kocharyan lifted the ban when he came to power in 1998, and the ARF was able to run in the 1999 election and gain seats in Parliament. The Unity Bloc was among the newly-formed alliances formed by Karen Demirchyan’s People’s Party of Armenia, Defense Minister Vazgen Sargsyan’s Yerkrapah Union and the Republican Party of Armenia. Based on the results of the 1999 parliamentary election, six political forces were represented in the National Assembly: the Unity Bloc, Communist Party of Armenia, Rights and Unity Alliance, Armenian Revolutionary Federation, Country of Law Party and National Democratic Union.
2003 Parliamentary Election
Based on the results of the 2003 parliamentary election, six political forces were represented in the National Assembly: Republican Party of Armenia, Justice Alliance, Country of Law Party, Armenian Revolutionary Federation, National Unity Party and United Labor Party.
2007 Parliamentary Election
Based on the results of the 2007 parliamentary election, five political forces were represented in the National Assembly: Republican Party of Armenia, Prosperous Armenia Party, Armenian Revolutionary Federation, Country of Law Party and Heritage Party.
A previous EVN Report article provides a thorough overview of political party splits and alliances that were formed during these three parliamentary elections.
Nagorno-Karabakh Negotiations
Since 1992, the main vehicle for the resolution of the Nagorno-Karabakh conflict has been the Minsk Group of the Organization for Security and Cooperation in Europe (OSCE), which has sought to mediate a lasting peace settlement. Over the years, the Minsk Group, currently co-chaired by the United States, Russia and France, has come up with a series of proposals to solve the conflict. During Kocharyan’s presidency, three such proposals were put forward: the common state proposed in 1998, Key West in 2001 and the Madrid Principles in 2007.
Kocharyan’s election as Armenia’s President fused the negotiating positions of the Republic of Armenia with that of Artsakh, of which Kocharyan was the previous President. At the time, it was decided that Armenia headed by Kocharyan would also represent Nagorno-Karabakh in the negotiation process and Nagorno-Karabakh was dropped as a party to the peace process.
The main difference between the common state proposal and the two that were tabled during Ter-Petrosyan’s presidency concerned the status of Nagorno-Karabakh. “Nagorno-Karabakh is a state and territorial entity in the form of a Republic, which constitutes a common state with Azerbaijan within its internationally recognized borders,” read the text. The new proposal, however, drew another swift rejection, this time from Azerbaijan. President Heydar Aliyev viewed the common-state approach as amounting to independence for Nagorno-Karabakh since two independent states were going to be created within Azerbaijan and Baku was not going to have much control over Stepanakert.
In April 1999, within the framework of the session of the Council of CIS Heads of State in Moscow and then at the summit dedicated to the 50th anniversary of NATO in Washington, the first direct meetings took place between President of Armenia Robert Kocharyan and his Azerbaijani counterpart Heydar Aliyev, initiating a series of meetings at the highest level. On January 26 and from March 4 to 5, 2001, two rounds of negotiations were held between the two Presidents in Paris, with the participation of French President Jacques Chirac. The meeting in Paris was followed by the negotiations of Armenian and Azerbaijani Presidents in Key West, Florida from April 3 to 7, 2001. Diplomats from all three Minsk Group Co-Chair countries actively participated in preparing and holding this meeting.
Unlike the previous three proposals, the one reached in Key West was never published. But it is known that the document was partly based on the philosophy of territorial exchange. It was envisaged that Nagorno-Karabakh would be connected with Armenia through the Lachin corridor, while Azerbaijan would get a land connection with Nakhichevan through Meghri. In the end, the agreements that the two sides reached were never realized, primarily due to the subsequent rejection by President Heydar Aliyev.
On June 29, 2007, during the OSCE Council of Foreign Ministers in Madrid, the text of the basic principles for the Nagorno-Karabakh conflict settlement, also known as the Madrid Principles, was officially conveyed to the Foreign Ministers of Armenia and Azerbaijan. The Basic Principles for the settlement of the Nagorno-Karabakh conflict were based on the principles of the 1975 Helsinki Final Act: Non-Use of Force, Territorial Integrity, and Equal Rights and Self-Determination of Peoples. Following the 2008 presidential election, the new administration led by the third President Serzh Sargsyan continued the negotiations based on the Madrid Principles.
Armenia’s Strategic State-Run Enterprises
During Robert Kocharyan’s decade-long tenure, several key strategic state-run enterprises were privatized, sold or handed over to foreign management, the long-term consequences of which kept haunting Armenia in the years that followed. Below is a review of some of the noteworthy deals.
Property-For-Debt Agreement
In November 2002, after two years of negotiations, Armenia and Russia signed the Property-For-Debt Agreement, under which five Armenian state-run enterprises were handed over to Russia. In exchange, the Russian side wrote off approximately $100 million from Armenia’s $114 million debt that had accumulated between 1994 and 1998. The five enterprises included the Hrazdan Thermal Power Plant (without Unit 5), Mars electronics factory based in Yerevan and three research institutes. The agreement was signed by Serzh Sargsyan, Armenia’s Defense Minister at the time, and Ilya Klebanov, Russian Minister of Industry, Science and Technology. With the agreement, the Russian side was authorized to use and further sell or transfer Armenian enterprises to third parties.
The Hrazdan Thermal Power Plant was valued at $31 million and became the property of Inter RAO UES, which was primarily owned by the Russian state. With the agreement, the Armenian side was also required to allow the Russian side to gain ownership of Unit 5 of the power plant by January 2005 and not sell it to any other interested party. Mars electronic factory was valued at $56.29 million and was acquired by Sitronics company. It is noteworthy that Sitronics is controlled by Sistema Holdings, where Kocharyan was an independent member of the board of directors from 2009 until recently, when he announced his intentions to participate in the June 20, 2021 early parliamentary election. The three research institutes were collectively valued at $6.47 million.
The agreement was signed a year after Russian President Vladimir Putin’s first visit to Armenia in September 2001. It was during this visit that Kocharyan and Putin discussed the issue of Armenia’s $114 million debt. At that time, the two leaders already had an agreement regarding the hand-over of Armenian state-run enterprises. Eventually, Unit 5 of the Hrazdan thermal plant was also sold to Russia in 2006 for $248.8 million, as was envisioned by the Property-For-Debt Agreement.
Zangezur Copper and Molybdenum Combine
The Zangezur Copper and Molybdenum Combine was privatized in 2004, when the Government sold it to four companies for $132 million. The German company Cronimet received 60% of the shares. The Pure Iron factory, based in Yerevan, received 15%. The Armenian Molybdenum Production and Zangezur Mining CJSC acquired 12.5% each. In 2014, Cronimet bought the shares secured by Pure Iron, becoming the owner of 75% of the company.
HayPost
Although the Republic of Armenia is the sole owner of the national postal operator Haypost CJSC, in 2004, by the decision of the government, the company’s management was handed over to Converse Invest. Two years later, in 2006, again by the decision of the government, the company’s management was taken over by the Dutch HayPost Trust Management CJSC, which belongs to Argentinian-Armenian businessman Eduardo Eurnekian. The process was carried out without a public tender.
In 2015, the government headed by PM Hovik Abrahamyan made a decision to completely privatize the company. Government officials believed that the privatization would contribute to the development of the communication sector and attract new investments. In 2019, however, after Pashinyan came to power, the government’s position regarding the privatization of HayPost has completely changed. Narek Babayan, who was the head of the State Property Management Committee at the time, said in the National Assembly that HayPost plays a pivotal role in providing state services; therefore, its privatization is not expedient. In 2020, after 14 years of foreign management, governance of Haypost was handed over to the Ministry of High-Tech Industry.
Sevan-Hrazdan Cascade Hydro Power System
The Sevan-Hrazdan Cascade is a complex of seven hydroelectric power plants (HPPs) with a total capacity of 565 megawatts. The seven HPPs are Sevan, Hrazdan, Argel, Arzni, Kanaker, Yerevan-1 and Yerevan-3. In 2003, the Armenian government led by PM Andranik Margaryan handed over the ownership of the Sevan-Hrazdan Cascade to Russian energy conglomerate Inter RAO UES in payment for the Metsamor nuclear plant’s $25 million out of $40 million debt to Russian nuclear fuel suppliers. In 2011, another Russian company RusHydro acquired the cascade. In 2019, the cascade was eventually sold to the Tashir company for 173 million rubles.
Armenian Railways
In 2007, the Armenian government approved a tender for the transfer of the management of the Armenian railway network, ultimately placing yet another chunk of Armenian economic infrastructure under Russian control. Days before the 2008 presidential election, the government approved the decision to transfer the long-term management of the Armenian railway network to Russian Railways Company for 30 years. The parties agreed that, after 20 years of work, they can extend the agreement for another 10 years. The Russian side made a one-off payment of $5.5 million to the Armenian government and pledged to invest at least $570 million in the Armenian railway.
Metsamor Nuclear Power Plant
According to Armenia’s Law on Energy, the shares of the Metsamor Nuclear Power Plant belong to the Republic of Armenia, and it is not subject to privatization. But in 2003, the management of the power plant was transferred to the Russian Inter RAO UES in exchange for covering its $40 million debt to Russian nuclear fuel suppliers, further reinforcing Russia’s substantial control over Armenia’s energy sector. According to the agreement, the Russian side would receive 25% of the plant’s profits, while the Armenian government would receive the remaining 75%. The contract was suspended in 2012 at the request of the Russian company because the working conditions were no longer favorable. According to Fip.am, currently the nuclear power plant is not under trust management and it belongs to the Armenian state.
Water Supply
Until 2016, five companies were managing drinking water supply in Armenia, including Yerevan Jur, the national Armenian water and wastewater company, the Shirak water and wastewater company, Lori Water and Sewage, and Nor Akunq. Since 2006, these five companies have been managed by two French companies: Yerevan Jur was managed by Veolia Group, and the rest by Swar (since 2004).
ArmenianGaz
After Armenia’s independence, ArmenianGaz state enterprise was the sole body responsible for gas supply and distribution in the country. During the last months of Ter-Petrosyan’s rule, ArmRosGazprom was established. Based on the 1998 government decision, 45% of ArmRosGazprom was transferred to Russian Gazprom, 10% to another Russian company Itera and the remaining 45% of the shares remained with Armenia. During the following several years, Gazprom’s share reached 80%, as it acquired all of Itera’s and over half of Armenia’s shares. In 2013, Armenia transferred its remaining 20% share in the gas distribution network to Gazprom in payment for its hitherto unknown debt worth $300 million. The government had accumulated the debt while secretly subsidizing the price of Russian gas, which had been raised by Gazprom in April 2011.
Armenia cannot enact any legislation affecting Gazprom’s tight grip on its gas network until December 2043. The Russian energy conglomerate will be able to challenge any relevant change at an international arbitration body. Armenia is also required to purchase gas from Gazprom until 2043.
Economic Growth
The Caucasian Tiger
Kocharyan’s presidency is often remembered for the double digit economic growth that the country registered in the early 2000s. The trend was largely due to the development of the construction sector and even earned Armenia the title of the Caucasian Tiger. For instance, in 2002, 12.9% economic growth was registered in the country, of which 4.8% was due to construction and 1.1% came from agriculture. In 2003, construction accounted for 5.6% out of the 13.6% economic growth and only 1% was generated from agriculture. The trend continued in the following years and reached its peak in 2006, when construction accounted for 8.1% of the 13.4% economic growth, while agricultural growth was at a record low of 0.1%.
It is important to note that the development of residential projects, such as Northern Avenue in Yerevan, and not industrial projects, were the primary driving force behind the construction boom. However, the years that followed came to show that the double digit economic growth that was fueled by the rapidly growing construction sector did not prove to be sustainable in the long run and instead led the country to a crisis. The economy was growing, but it was not developing. In 2009, a year after the global financial crisis, Armenia registered a record 14.2% economic decline, of which 10.7% was in the construction sector. In the years following the financial crisis, other sectors became the driving force of the economy, with the share of construction gradually declining. In 2017, for example, 7.5% economic growth was registered, of which 5.3% was recorded in the trade and service sectors and 1.8% in industry.
Northern Avenue
The transformation of Armenia’s natural landscape and its capital Yerevan started with the construction boom in the early 2000s, when the City Duma building in the capital, dating back to 1906, was torn down to make way for the construction of the Congress Hotel on Italy Street. This was the first controversial construction project in the city, which was followed by the even more disputed large-scale Northern Avenue project.
First proposed by the capital’s original architect Alexander Tamanyan in the 1920s, Northern Avenue was going to connect the Opera with Republic Square via a pedestrian boulevard. But it was only decades later, after independence, that the Armenian government decided to go forward with the project. In the summer of 2002, over 345,000 square meters in downtown Yerevan was declared eminent domain. The construction of the Avenue, which was completed in 2007, turned out to be a distortion of Tamanyan’s vision and resulted in the destruction of an old neighborhood, leaving an irreversible mark on the destinies of thousands of families.
The construction was a tactical move by President Kocharyan and his team to gain political dividends just ahead of the 2003 presidential election. By stimulating economic growth, attracting new investments and creating new jobs, Kocharyan was hoping to garner much-needed public support. It was not surprising that Kocharyan’s non-official campaign for his re-election started where Northern Avenue stands today. The video footage from that time vividly captures how residents were forcefully being dragged out of their houses. The residents’ prime concern was that the valuation of their property was not based on any objective and measurable criteria, and the compensation they were being provided was not adequate. In the past two years alone, the ECtHR has issued four judgments against Armenia, requiring the government to pay over €2 million as compensation to former residents of Northern Avenue, who claimed violations of their rights guaranteed by the European Convention on Human Rights (ECHR).
According to the Interest Protection Department of the Public Prosecutor’s Office, 29 historical and cultural monuments were permanently demolished in Yerevan between 2000-2006, most of them under the name of eminent domain. One example is the Officer’s House, dating back to 1839, which was the first national provincial school where Khachatur Abovyan taught. In the early 1900s, it served as a theater and cinema, where Komitas performed with his Gusan choir, where the Yerevan premiere of Anush Opera took place, and where theatrical groups from Tbilisi, Baku, Ukraine and Russia had performances. The building was torn down in 2005, after it was recognized as eminent domain. The Piazza Grande business center was built in its place.
Membership in International Organizations
Council of Europe
Armenia joined the Council of Europe (CoE) on January 25, 2001, becoming its 42nd member state and committing to a number of obligations aimed at assisting the protection of human rights and democratization. It was Armenia’s membership to the Council that posed an additional need for certain amendments to the Constitution, which were accomplished with the 2005 constitutional referendum. The abolition of the death penalty and decriminilization of homosexuality were also among the conditions of Armenia’s membership in the CoE. But several months after joining the Council of Europe, Armenia was already on the verge of losing its membership.
The death penalty was a legal form of punishment in Armenia for grave crimes such as murder and state treason. It is important to note that Armenia joined the CoE after the 1999 Parliament shooting and all those political forces that were previously in favor of abolishing the death penalty, were demanding the execution of the terrorists who committed a bloodbath in the country’s Parliament. The death penalty was eventually abolished in 2003 and replaced with life imprisonment, after Parliament ratified Protocol No.6 to the European Convention on Human Rights in September 2003. The protocol allows states to apply the death penalty only in respect to acts committed in times of war or imminent threat of war. In Armenia, the last execution was performed on August 30, 1991.
Another commitment associated with the CoE membership was decriminalization of homosexuality and the protection of lesbian, gay, bisexual and transgender (LGBT) people. In particular, Article 116 of Armenia’s Criminal Code at the time outlawed “sodomy” (sexual intercourse of a man with another man). This article was removed from the Criminal Code that was adopted on April 18, 2003 and entered into force on August 1, 2003.
Collective Security Treaty Organization
The Collective Security Treaty Organization (CSTO) is a Russia-led military alliance of seven former Soviet states that was created in 2002. The member states are Armenia, Russia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan. Prior to the establishment of the CSTO, Armenia, along with eight other countries, was also a founding member of the Collective Security Treaty (the initial version of CSTO). The CSTO’s purpose is to ensure the collective defense of any member that faces external aggression. The following fact sheet provides a detailed overview of the military alliance and explains what CSTO membership provides.
Illustration by Harut Tumaghyan.
Independence | N11
The Republic of Armenia marks the 30th anniversary of its independence on September 21, 2021.
As the Soviet Union was collapsing, the Supreme Council of the Armenian SSR adopted a Declaration of Independence on August 23, 1990. On September 21, 1991 a nationwide independence referendum was held. Independence was officially declared by parliament two days later.
Marking a milestone independence should be celebratory, but in the shadow of the 2020 Artsakh War, it is one that will be marked with mixed feelings and uncertainty about the future.
EVN Report’s 11th magazine issue entitled “Independence” looks back over the four administrations of independent Armenia, revealing their major challenges and hurdles, their setbacks and successes. The issue will cover Armenia’s first President Levon Ter-Petrosyan (1991-1998), second President Robert Kocharyan (1998-2008), third President Serzh Sargsyan (2008-2018) and Prime Minister Nikol Pashinyan (2018-2021). As bleak as the future seems today, understanding the past is the first step to forging a brighter path for the fourth decade ahead.
