Armenia: "Oligarchic" party gaining ground ahead of 2007 vote

Emil Danielyan 12/20/06

Multi-millionaire businessman Gagik Tsarukian is using populist appeal and vast financial resources to make his political party, Prosperous Armenia, a strong potential contender in next spring's parliamentary elections.

The 50-year-old businessman, who arguably boasts Armenia's largest fortune, has already spent millions of dollars on providing relief aid, free medical treatment and other ordinarily public services to tens of thousands of low-income people. The aid, heavily advertised by Tsarukian-funded television stations, is prompting growing concern among the country's mainstream political groups that view it as a massive vote-buying operation.

Prosperous Armenia, set up a year ago, now claims to be by far Armenia's largest political party. In a country with a population of 3 million, the party claims to have some 240,000 members and over 400 offices. "Everyone is surprised that we have managed to create such a strong party within a short period of time," Tsarukian told thousands of supporters in Yerevan on December 15. "I am not doing this to gain something for myself," he said. "I have everything. I just want us to live in a strong and prosperous country."

Tsarukian, better known to most Armenians as Dodi Gago, is thought to be the wealthiest and most influential of Armenia's top government-connected entrepreneurs, owning over a dozen big businesses and living in a huge villa perched on a hilltop overlooking the northern outskirts of Yerevan. Like other "oligarchs," Tsarukian moves around in a motorcade of luxury cars with virtually identical license plates, surrounded by intimidating bodyguards.

The unusually muscular tycoon, who reportedly served a prison sentence for rape in Soviet times, rose to prominence in the late 1990s as a minority shareholder in a French-owned brewery in Abovian, a town 15 kilometers north of the Armenian capital. His business empire has since expanded dramatically, not least because of his close ties with President Kocharian.

The dominant view among Armenian politicians and observers is that Prosperous Armenia is the brainchild of Kocharian, who seems keen to retain an influential role in government after completing his second and final term in 2008. Opinion is only divided on whether the party is meant to serve as a counterweight to the ruling Republican Party of Armenia or as a powerful addition to the government camp.

Either way, Tsarukian's party appears to be winning over many impoverished voters disillusioned with both the government and the opposition. Over the past few months these voters have been bombarded with television pictures of truckloads of wheat and potato seeds sent by Tsarukian to villages across the country, most of them hard hit by last summer's severe drought.

Defending Tsarukian, Kocharian insisted on December 15 that Prosperous Armenia's success should not be attributed to its "benevolent actions." "There is demand in our society for a new political force that comes up with a very understandable slogan, ‘We think about the people,'" he said in televised remarks.

Zvart Melkonian, a 77-year-old pensioner waiting to hear Tsarukian speak in a conference hall in Yerevan's Malatia-Sebastia district, had trouble remembering the party's name, but knew why she has joined it. "I am 100 percent sure that he will make things better," she said. "He is kind and helps many people," agreed her husband Andranik, also a party member.

The elderly couple is unlikely to care about the sharp contrast between the scale of what Prosperous Armenia calls "humanitarian aid" and the modest amount of taxes paid by Tsarukian-owned businesses. The largest of them, a chain of petrol and liquefied gas stations, was only 76th in the list of Armenia's 300 largest corporate taxpayers that was released by the government last month.

"Everyone realizes that this money was stolen from all of us in the form of unpaid taxes," said Isabella Sargsian, a young civil rights activist. "At the same time, many people say, ‘At least he is giving back some of it.' And they are so delighted. This is what strikes me the most."

Tsarukian has sought to minimize independent media coverage of his political activities, refusing to give interviews or even to allow journalists to be present at events organized by Prosperous Armenia. A reporter for EurasiaNet who went to the party leader's indoors meeting with some 2,000 party faithful at Malatia-Sebastia was promptly spotted by security guards and told to leave the building. Tsarukian's Kentron television station broadcast his speech the next day.

Apparently unaware of the information blackout, leaders of Prosperous Armenia's local chapters are far more talkative, revealing a well-organized grassroots network. "We admit members on a daily basis," Felix Yayloyan, head of a party branch in another Yerevan district, Arabkir, told EurasiaNet. In Yayloyan's office, charts detail the dynamics of the ongoing recruitment process. Yayloyan insisted that none of his nearly 5,000 local recruits, 42 percent of them unemployed, was or will be compensated for joining Prosperous Armenia. The party's sole "benevolent" activity in the area, he said, is to clean up neighborhood courtyards, to enable all local schoolteachers to undergo a gynecological examination and treatment free of charge, and to select outstanding university students for Tsarukian's scholarships.

Other party figures admit privately that a large number of the people jumping on Tsarukian's bandwagon have less than altruistic motives. "Whoever has no job is joining Prosperous Armenia with material expectations which can't be met," said one senior activist, who asked not to be identified. "The challenge is to make sure these people stick with us until the elections."

This will be an easy task in Abovian and surrounding villages, an area widely regarded as Tsarukian's fiefdom. One of the villages, Aramus, is quite affluent by Armenian standards and has not received much aid from the tycoon. But even there support for him seems very strong. More than a quarter of Aramus's 2,400 eligible voters are already affiliated with Prosperous Armenia, according to the village administration.

It remains to be seen whether the party can do well in other parts of Armenia that are dominated by other oligarchs and government-connected clans. Most of them have already pledged allegiance to the Republican Party of Armenia and its unofficial leader, Defense Minister Serzh Sarkisian. [For background see the Eurasia Insight archive]. Whether the Republican Party and Prosperous Armenia will clash during the elections or amicably divide most parliament seats among themselves is a matter of contention. Armenian authorities have assured the West that the May 2007 elections will be more democratic than those held in the past. [For background see the Eurasia Insight archive].

For pro-democracy activists like Isabella Sargsian, however, the rise of Tsarukian's party not only bodes ill for the freedom and fairness of the polls, but also illustrates the weakness of civil society in Armenia. The British-educated campaigner has organized youth protests in Yerevan against government crackdowns on the opposition and engaged in civic education projects in rural regions. "Maybe civil society never existed here," she muses now. "The values on which our society is based are quite different."

Editor's Note: Emil Danielyan is a Yerevan-based journalist and political analyst.

Posted December 20, 2006 © Eurasianet