Armenians to Vote for New Parliament as Power Shift Begins

(Bloomberg) -- Armenia holds parliamentary elections on Sunday in the next stage of constitutional reforms intended to shift power away from the presidency. International observers worry the results may be tainted by fraud.

The ruling Republican Party of President Serzh Sargsyan faces four other parties and four political alliances in elections held under a complicated new system of proportional representation. Parties need at least 5 percent of the vote and alliances 7 percent to enter parliament.

The campaign’s been marred by allegations of “widespread vote-buying” and a “perception that pressure and intimidation of voters will occur,” despite new measures to prevent ballot fraud, observers from the Organization for Security and Cooperation in Europe said in an interim report.

The Caucasus republic of 3 million people is switching from a mainly presidential system to one in which power will rest with the government in parliament once Sargsyan’s second and final term ends in March next year. The changes approved in a December 2015 referendum give Sunday’s results particular significance, with critics alleging that Sargsyan is preparing the ground to continue to rule as premier after he steps down. Sargsyan hasn’t said that’s his intention, though he hasn’t ruled it out.

‘Unacceptable Methods’

The U.S. and the European Union took the unusual step of issuing a joint statement on Wednesday that raised concerns about “voter intimidation” and “the systemic use of administrative resources to aid certain competing parties.” They urged officials to enforce election laws “in an unbiased and credible manner.”

While some candidates may be tempted by “unacceptable methods,” the authorities have strengthened election safeguards to “increase voters’ confidence” in the results, Sargsyan told OSCE monitors in comments posted on the presidential website on Friday. “The government will do everything possible within its powers” to “conduct good elections” and support the work of observers, he said.

The elections are “more a confrontation between strong personalities” than a contest of parties, said Richard Giragosian, director of the Regional Studies Center, a think tank, in the capital, Yerevan. There’s a “paucity of any substantial policy debate,” he said.

Armenian Trump

The Republicans held 69 of 131 seats in the outgoing parliament. Under the new system, there’ll be a minimum of 101 seats and a second round of voting if no party wins at least 50 percent of mandates or can create a majority coalition. In that case, the top two parties will contest a run-off and additional seats will be allocated to ensure the winner has at least 54 percent of places to form a government.

The ruling party has 29 percent support compared to 28 percent for an alliance headed by Gagik Tsarukyan, a flamboyant local oligarch and former arm-wrestling champion, according to a March 12-19 opinion poll of 1,145 people by Gallup International Association Armenia. The Yelk (Way Out) alliance of opposition parties is their nearest rival, with 6 percent.

Tsarukyan, whose Prosperous Armenia faction had 33 seats in the previous parliament, was described as having a personal style that “would make Donald Trump look like an ascetic” in a 2006 U.S. embassy cable published by WikiLeaks. He’s running in the elections after being out of politics for two years following a confrontation with Sargsyan.

‘Profound Change’

Prime Minister Karen Karapetyan has led the Republicans’ campaign though he isn’t on their list of candidates. The party has said it will nominate him to remain in office if it wins the elections. Sargsyan appointed the former executive of Russia’s Gazprom PJSC as premier in September, saying he’d lead a “wave of changes.”

The impoverished former Soviet republic, which is a member of the Russian-led Eurasian Economic Union, needs “profound change” to tackle corruption and speed growth, Karapetyan said in a November interview. Armenia’s economy grew just 0.2 percent in 2016 compared to a year earlier, its lowest since 2009, according to the National Statistics Service.

The elections will be won by “the current political elite that controls the economy,” said Lilit Gevorgyan, a senior economist at IHS Markit in London. The constitutional changes are designed to allow the Republicans “to hold on to power” and “safeguard their large business interests,” she said.

To contact the reporter on this story: Sara Khojoyan in Yerevan at skhojoyan@bloomberg.net.

To contact the editors responsible for this story: Gregory L. White at gwhite64@bloomberg.net, Tony Halpin, Paul Abelsky