Which way will Armenia tilt?
On February 18, Armenians will cast their ballots for president. Although eight candidates have registered, victory and a new five-year term for incumbent Serzh Sargsyan are a foregone conclusion. Still, this election is not meaningless.
The conduct of this poll is important, as will be Sargsyan's choices after the poll. If the international community gives the election a clean bill of health, it will increase Sargsyan's legitimacy. He will have the opportunity to enact much needed reforms in order to move closer to the West or, perhaps as likely, avoid tough reforms and move Armenia -- already broadly sympathetic to Russia -- further into Moscow.
Upon first winning the presidency in February 2008, Sargsyan faced a legitimacy crisis. Some have claimed that he has used his position and connections -- he was sitting prime minister and had served previously as secretary of the national security council and defense minister -- to rig the election against Levon Ter-Petrossian, a former president. At least ten died in the ensuing protests.
This year, Sargsyan faces little resistance, with Sargsyan's slide towards authoritarianism and Armenia's lack of democratic institutions leaving the opposition fractured and divided. His most formidable opponents -- Ter-Petrossian and wealthy businessman Gagik Tsarukyan, chief of the Prosperous Armenia party -- both declined to run.
That Sargsyan effectively gets a free pass does a disservice to Armenia, which faces formidable obstacles to its development. When Georgian President Mikheil Saakashvili inherited a corrupt and inefficient state in 2004, he stamped out government corruption and reformed Georgia into a Western-leaning economy. On January 31, 2013, the World Bank issued a report, "Fighting Corruption in Public Services: Chronicling Georgia's Reforms," praising Georgia for tackling corruption and noting that Georgia can serve as an example for other countries facing similar challenges.
Armenia will find no such praise. Its government remains corrupt and inefficient. The country was among the worst hit during the 2008-2009 economic crisis, with GDP shrinking by 14 percent in 2009, according to the IMF. Since then, Armenian GDP has grown slowly -- at an average annual rate of approximately 3.5 percent between 2010-2012. In contrast, Georgia grew by an average annual 6.6 percent in the same three years. In 2010, according to official statistics, 35.8 percent of Armenia's population was living below the poverty line -- an increase from 27.6 percent in 2008. And, while neighboring Georgia and Azerbaijan welcome foreign investors, organized crime keeps most foreign investors out of Armenia. The Armenian Diaspora -- who care deeply about Armenia's success -- have long ago concluded that investing in their homeland is a thankless task that will pay dividends neither individually nor for Armenia.
Hundreds of thousands of Armenians now flee the country for better prospects. Younger, more educated Armenians head to the West, while their older, blue-collar compatriots head north to Russia. The Russian government has welcomed these migrants, and has helped place them in areas of Russia facing population decline. While Russia might use these Armenians to mitigate its own demographic problem, the same migration merely exacerbates Armenia's.
Last April, the European Commission estimated that one-third of Armenia's population had emigrated since Armenia's independence in 1991. Visiting Armenia in December 2012, one young Armenian told me that if she or her peers had even small hope that the economy would improve, they would stay. But few see such hope.
Meanwhile, a full sprint into Russia's embrace may compound Armenia's problems. In recent years, Armenia has become Russia's primary foothold in the South Caucasus. Russia's influence in Armenia is vast not only political and economic, but also military and cultural. Armenia depends on Russia for gas; Russia owns Armenia's communication and railway networks, and has extended a lease for a Military Base in Gyumri until 2044.
The Kremlin also hopes to bring Armenia into a Russia-led Customs Union -- a precursor to the so-called Eurasian Union, which Russian president Vladimir Putin hopes will be a counterweight to the European Union.
With aid, however, the West has leverage.
Since 1992, the United States has provided Armenia with approximately $2 billion in development and humanitarian assistance, the highest aid per capita among the former Soviet states. Although the U.S. reduced funding in 2011, when the Millennium Challenge Corporation penalized Armenia for failing to enact political reforms, the European Union compensated with an augmented aid package and is currently negotiating a free trade accord.
It is now up to Armenia to choose which direction it wishes to go: Will it join the West and a community of democracies and liberal economies, or will Sargsyan tilt Armenia more toward a Kremlin-led community of increasingly autocratic former Soviet states.