By Harry Tamrazian in Prague
President Robert Kocharian will remain the dominant figure in the Armenian political scene in 2001-2002, according to the Economist Intelligence Unit. The British research group concluded in its latest country report that Kocharian will be able to strengthen his hold on power by capitalizing on the weakness of the ramshackle Miasnutyun (Unity) alliance, which has failed to become a “cohesive parliamentary bloc.”
The widely expected political divorce of two main members of Miasnutyun, the Republican Party (HHK) and the People's Party (HZhK), would leave the parliament without a legitimate majority and could lead to calls for a fresh general election. However, an pre-term parliamentary election is unlikely to be held within the forecast period, the Economist Intelligence Unit said.
The research group also predicted that Kocharian will likely seek re-election in 2003, provided that he has the backing of the influential defense minister, Serzh Sarkisian.
The report also forecast that the Nagorno-Karabakh conflict will not be resolved within the next two years, despite a growing desire among the international mediators of OSCE Minsk Group. The peace negotiations will resume, but there will be no progress as long as the two conflicting parties remain reluctant to compromise, reflecting a hardline public opinion.
The report also does not expect an improvement in Armenian-Turkish relations. The research group said the newly established Turkish-Armenian reconciliation commission is unlikely to have a decisive impact on relations between two countries, because it has no backing in Armenia. The majority of the parties in the Armenian parliament fear that the commission will jeopardize the Armenian campaign for international recognition of the 1915Armenian genocide. Nor does the controversial commission enjoy the government’s support.
Relations between Armenia and Russia are likely to remain good. "Russia requires a firm ally in the south Caucasus, a role that Armenia remains best placed to fulfill,” the British research group concluded. But the Intelligence Unit also predicted Armenia will at the same time manage to maintain close ties with the United States, on which it is heavily reliant for financial assistance.
On the economic front, the Intelligence Unit believes that government's GDP growth target of 6.5 percent for this year is “overoptimistic.” The real GDP growth will be 5 percent in 2001, rising to 6 percent in 2002. Armenia will become a member of the World Trade Organization (WTO) at the end of this year, giving it an access to global markets. The membership in the WTO will make Armenia more attractive for foreign investors.
The global economy is slowing down and growth in the European Union, which accounts for about 35 percent of Armenian exports, is also slowing sharply. But Armenia's export will benefit from continuing GDP growth in Russia, its single largest trading partner. Export revenue is expected to rise in 2001-2002, boosted by recovery in industrial output. The Armenian economy will benefit from the upcoming privatization of the remaining state-owned enterprises, the report concluded.