Economy minister's demarche heralds bleak future for Armenia
Escape from a sinking ship

ANALYTICS  15 February 2024 - 12:08

Economy Minister Vahan Kerobyan made an unexpected Valentine's Day "gift" to Armenia's prime minister and the entire public of the "land of stones". "It turns out I will no longer serve you as economy minister," he wrote on Facebook. As we can see, this is a classic example of a demarche, given the tone and form of Kerobyan's statement.

Normally, decisions on the appointment or dismissal of ministers in Armenia are not taken on social networks, but at a meeting with the country's top leadership. As we can see, things have now turned out quite differently. Kerobyan, by all appearances, presented Pashinyan with a fait accompli. He also used a very telling phrase to do so. Undoubtedly, the Armenian punditry will offer different versions of the real reasons for Kerobyan's démarche in the very near future.

I would like to remind you that the decree appointing him as the Minister of Economy of Armenia was signed by Armen Sargsyan. Yes, the same former Armenian leader who had an uncanny resemblance to the famous Elusive Joe. What is more important, as the Armenian media wrote at the time, is that this appointment had been made on the initiative of the PM Pashinyan. In other words, they had a very trusting, close relationship. However, as it turns out, Kerobyan's decision to step down was made in a demonstrative manner.

"When I became minister on November 20, 2020, I knew that I was only going to serve for a few days or a few months. Changing the government seemed very likely. During this period, I was tempted to leave the post several times due to many disagreements. However, I took it upon myself to maximise the value of my service to the country," Kerobyan revealed the details of his ministerial life.

It turns out that he had been longing to leave Pashinyan's team for a long time. He had been waiting for the right moment. Now, by all appearances, that moment has come. I should also add that before he was appointed a minister, Kerobyan was a very successful businessman. He founded the company "Menu Group - Menu Group UK Ltd" in Armenia and became its director. In 2016 he opened a branch in Belarus. So, by and large, the now-former Minister of Economy can return to the sphere of business. Moreover, during his time as minister, he made new contacts not only in Armenia but also abroad.

Speaking of Kerobyan's biography, it's important to note that he volunteered to go to the front after the 44-day war began. At least that is what the Armenian media said. However, no details of his participation in the 44-day war were given, suggesting that in reality, it was a usual PR move important for Kerobyan's image. At any rate, even as economy minister, he was far less than "hawkish". In particular, in August 2022, Kerobyan spoke out in favour of establishing trade relations between Azerbaijan and Armenia as soon as possible. He stressed the need to restore the railway connection with Azerbaijan to develop trade. "Without an open rail link with access to the wider area, it's impossible to have developed industry. Restoring rail links with Azerbaijan will also give Armenia rail links with Russia, Iran and Central Asia," he said at the time.

It turned out that Kerobyan was a supporter of the opening of the Zangezur corridor, but no one in Armenia listened to him. In the end, he was forced to leave his post as Minister of Economy after a long and bitter dispute with the Armenian authorities.

There may be another reason for his demarche. The fact is that despite the triumphalist reports of Kerobyan, who decided to add bright colours to Armenia's economic situation in his Facebook post on the occasion of his resignation, the reality is that Armenia remains a country with very vague geopolitical prospects, which objectively causes concern among foreign investors.

And here I'd like to remind you that already in the third quarter of 2023, the economic growth rates in Armenia started to slow down. Moreover, as of January 1, 2024, Armenia's public debt amounted to $11.85 billion, which is 11.5% higher than on January 1, 2023 and 28.5% higher than on January 1, 2022. This is also a sign of how weak the Armenian economy is and its very gloomy outlook.

As we can see, there are many factors that, singly or combined, led to Kerobyan's much-publicised resignation as Armenian Minister of Economy. In any case, the very fact of such a resignation and how it took place prove that Armenia has entered a period of protracted domestic crisis. The consequences of this crisis are difficult to predict. And Kerobyan may well end up being the first rat to escape from a sinking ship.

Caliber.Az