Russia Votes: Armenia watches Putin’s Party performance in parliamentary polls

Russia Votes: Armenia watches Putin’s Party performance in parliamentary polls

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The victory by the Yedinaya Rossiya Party of Russia’s powerful Prime Minister and president-in-waiting Vladimir Putin may have its implications also for Armenia. The party of Putin maintained its majority hold, but appears to have gained fewer seats in the State Duma than four years ago.

With most of the votes processed at Russia’s December 4 elections the ruling party is said to be in the clear lead with nearly 50 percent of the vote, followed by the Communist Party (about 20 percent), Spravedlivaya Rossia (about 13 percent) and the Liberal-Democratic Party of Russia (about 11 percent). Three other parties did not poll enough votes to overcome the seven-percent threshold required to enter the legislature.

The party led by Putin and current President Dmitry Medvedev won the 2008 Duma elections by polling more than 63 percent of the vote, which leads some analysts in Russia to assume Putin is doing worse than he has during his factual 11-year rule. On a political landscape of few surprises, the “off” performance leaves room for speculation ahead of next March’s presidential election – Putin’s presumed return coronation.

Parliamentary elections in Armenia will be held after the presidential election in Russia. And while experts say that Russia will not care much about who wins in the elections in its South Caucasus ally nation, it is clear that Armenia does care about who wins elections in Russia.

“The significance of the Russian factor in the political life of Armenia is considered to be an absolute, whereas on the whole for the Kremlin it does not matter which force appears at the helm of power in Armenia,” said Armenian political analyst Sergey Shakaryants.

In any case, Armenia is joined at the hip with Russia and the slightest changes in Moscow may immediately be reflected in Yerevan. For example, the resignation of Moscow Mayor Yuri Luzhkov was followed by the resignation of Yerevan Mayor Gagik Beglaryan, who was linked with Luzhkov with commercial schemes. And the loss of the old majority in parliament by Yedinaya Rossiya may prompt the Republican Party of Armenia (the RPA) that the period of constitutional majority is over. (The RPA currently holds 64 seats in the 131-member National Assembly of Armenia. While in a position to form the government single-handedly, the RPA still chose to form a coalition with three other parties after the latest elections in 2007).

Perhaps, the period of total economic, energy, communication and political dependence of Armenia on Russia is also ending and the phase of real diversification is coming.

Foreign investments in Armenia’s economy during the first nine months of 2011 amounted to $586.7 million, increasing by 24.2 percent as compared to the same period of 2010. Russia remains the largest foreign investor in Armenia as it accounts for approximately half of all investments - $284 million. France is the second largest investor – $77 million. But the most interesting is that for the first time in the history of Armenia the United States gets to be the nation’s third largest foreign investor. American companies have invested a total of $40 million, which is 2.2 times more than during the first nine months of last year. British investments have risen 9.9 times, amounting to $33.6 million. However, by the rate of growth (in terms of foreign investments in Armenia) the leaders are Switzerland and Canada – an increase of 270 and 192 times, respectively (though the numbers in real terms remain less impressive than the rate of growth).

The Western interest in Armenia is evident, as well as the fact that in conditions of total dependence on Moscow, Armenia might not be able to get proper investment from the West and implement its economic reforms.

On Sunday, the RPA presented an economic strategy with one priority being to attract investments. The government, in fact, is ready for Western investments.

Around the same time, the Russian energy giant, Inter RAO-UES, refused to further manage the Armenian Nuclear Power Plant, and the Russian Railways company made some amendments in its concession agreement on managing the railroads in Armenia. In particular, they specified the conditions for the return of property upon dissolving the contract. That is, it is likely that Russia will abandon the management of Armenia’s railways, too.