Armenia 2015

In 2014, local elections took place in Armenia. The ruling Republican Party of Armenia confirmed its domination by winning in 87 out of 121 communities. Despite some improvements of the electoral process, elections were only partly free and fair. Still, some violations in the form of abuse of the administrative resources or of vote buying are presently practiced by the incumbents in the Armenian elections. At the end of 2014, president Serzh Sargsyan proposed a transformation of the political system, from a presidential democracy to a parliamentary republic, whereby a referendum on the issue is expected by the end of 2015. People are free to organize political parties in Armenia, but government is often accused for abusing the administration to limit their activities. During the year,

Authorities in Armenia have constitutional, effective and unchallenged power to govern. However, this is mainly due to the highly concentrated power in the hands of the political elites and lack of the system of checks and balances. Together with the widespread corruption among the officials, this represents the biggest threat to democracy in Armenia. Security forces are controlled by the president who appoints the heads of these organizations. Although, formally, the church is separated from the state, during the recent years it has been much more involved in everyday politics, helping government to deal with some sensitive issues in the society.

Armenian press is not free. According to the Freedom House, broadcast media, which remain the main source of information for the citizens, are under control by the political and business elite. Thus, these media outlets are increasingly partisan in favor of their owners, unlike online outlets which are becoming the center of independent journalism. However, government had tried to influence that through a draft amendment which would hold online outlets responsible for defamatory or insulting comments on the internet. After the criticism from the media watchdogs, most importantly by Reporters without Borders and by OSCE/ODIHR, the amendment was dropped. Defamation is not punishable by imprisonment but it is subject to huge fines. Due to that, as well as because of frequent verbal or

Armenia`s judiciary remains the least independent in the Caucasus region. As Freedom House remarked, “the functioning of the justice system is one of the weakest links of Armenian governance”. Citizens` trust in the system is low indeed - only 15 percent. Of all areas of life, they perceive judiciary as the most corrupt. Political control is also present. Judicial reforms launched in 2012 are to be completed in 2016. Amendments to the Judicial Code were carried, strengthening the role of autonomous judicial bodies in appointment, evaluation and promoting of judges. European Commission, in its report on ENP in Armenia in 2014, wrote that there was a progress in access to justice, but no improvements on impunity or regarding the right to a free trial. World Bank reckoned that, overall,

Since 2011, Armenia has slowly but steadily advanced in fighting corruption. In 2014, it ranked 94 (of 175) in the Transparency International`s Corruption Perception Index. In its latest strategic paper on corruption, as of April 2014, the government put emphasis on fighting it in education, state revenue, police and health care. Judiciary, even though majority of citizens and many international observers perceived it as the most corrupt, was not of the highest priority. True, tax and customs, or other revenue offices deserved to be among priorities. But even in that field, the illicit secret ties that link those having political and those having economic power, as a powerful generator of corruption, might not on the longer run be easily dismantled without further, simultaneous,

As EU has complained in its ENP on Armenia in 2014 progress report, the awareness of the international regulation on human rights and of their obligations stemming from it was low among Armenia`s national institutions. Even if there were strategies, action plans and subsequently laws, proper implementation was lacking, due to the absence of by-laws or to their being in variance with European standards. Moreover, as many observers noticed, contemporary Russia is increasingly a role model for many in Armenia, even regarding the ways some human rights issues are dealt with. Albeit there is no “foreign agent bill”, the treatment of NGOs, if their activities disturb government policies, has recently worsened, occasionally being violent or prohibitive. Lawmakers and government officers on

Property rights in Armenia need more sufficient security. Weak administration of justice is a result of court partiality and of the influence of external factors on court proceedings, leading to low integrity of the legal system. Privatization process, although almost complete, has been heavily politicized and conducted in a non-transparent way, both in first waves of market liberalization and more recently. Rules and regulations are implemented in a non-consistent way, allowing for widespread favouritism and corruption. One of the major problems is weak and ineffective enforcement of contracts due to high number of necessary legal procedures which are time consuming. Slow court procedures lead to uncertainty of property rights, while out-of-court settlement mechanism is not well

A strong recession in 2009, coupled with sluggish economic recovery, led to the fact that Armenian GDP reached its pre-crisis level only in 2013. Government consumption is low by international comparison. It reached 25.6% of GDP in 2014, with fiscal deficits lower than the projected growth. The growth prospects are dim, taken the economic downturn in the Russian Federation, which is one of the main Armenian economic partners. Expected decrease in remittance from workers in Russia would also lead to lower domestic consumption. Public investment in infrastructure could boost growth, both in the short run via increased investment and in the long run by eliminating infrastructure bottlenecks that burden exports. However, current level of public debt, which has tripled since 2008 to 44.2% of

The regulation of business activities is not always in favour of businesses, which increases their operational costs. However, starting a business is easy and cheap, and there are few licensing restrictions. Administrative requirements for conducting business remain high, with unnecessary or complicated procedures, while the process of reform by cutting the red tape has not been implemented yet. These requirements serve as a fuel for corruptive practices due to non-coordination of government bodies and their different interpretations of the rules. Furthermore, paying taxes and compliance with all the tax procedures is very lengthy and incurs cost. The same is with the process of getting electricity. Reforms that liberalized civilian air transportation (‘’open sky’’ policy) have

Armenia signed the accession treaty to the Eurasian Economic Union (EEU) in October 2014. It became effective in January 2015. Other member countries include the Russian Federation, Kazakhstan, Belarus and the Kyrgyz Republic. Applied tariff rates in Armenia are low for manufacturing products but are significant in the field of agriculture products (and extensive, since almost all agriculture products are protected by tariffs). Membership in the EEU entails also a customs union, which is envisaged to increase Armenian overall tariff rate, leading to higher prices for imported goods and commodities. On the other hand, this move has secured continuation of privileged prices on imported oil and gas from the Russian Federation, as well as more fiscal revenues from the common EEU customs pool.