Wednesday, 26 September

“Faith in the Victory of Freedom and Justice” - Words Spoken by Tigran Sargsyan Five Months Ago

“Every historical experience has imbued our subconscious and genetic code with a minimum of two precepts to assist us in our daily lives - faith in the coming victory of freedom and justice and the select mission to communicate that faith to others. The essential issue in Armenia today is to comprehend that mission and to propose a formula leading to the coexistence of cultures.”

It was with these words that Tigran Sargsyan, then President of the Central Bank of Armenia, concluded a lecture entitled “Armenian Civilization as a Ground Breaking Model” he gave at an event organized by the Noravank Foundation (, a think-tank based in Armenia. 

The author of these words was nominated Prime Minister of Armenia on April 9th. Today, it is difficult to understand what Mr. Sargsyan meant by the expression, “Faith in the Victory of Freedom and Justice”. Difficult because we don’t know what he meant by the words ‘freedom and justice’ months ago and how he comprehends those terms today, as Prime Minister.

Weeks ago the assembled crowds at Freedom Square had also been chanting the words ‘Freedom” and “Justice”. Do the chants of the people have any connection to these terms of Mr. Sargsyan or do they fall into another category all together? It appears that just two days after his nomination Mr. Sargsyan has waylaid my temptation to ask him to do so.

On April 11th, at the opening ceremonies of the first fair devoted to the banking and finance sectors he stated that, “Revolutionary changes can only occur when there is a change in the approach of society, when we understand that the only road to enrichment is that of knowledge.”

Perhaps it is incorrect to attempt to link words separated by the span of five months but one thing must be noted - the hundreds of thousands of people who showed up in Freedom Square were struggling namely for ‘freedom’ and ‘justice’ and that many amongst them were fighting to see that ‘knowledge as the road to enrichment’ prevailed. In any event, it must be stressed that Tigran Sargsyan is unique among officials in that he periodically presents his views in published articles and lectures.

Serzh Sargsyan took the oath of office and immediately nominated the President of the Central Bank as the new Prime Minister. Of course, Mr. Tigran Sargsyan cannot be considered a member of the former government’s team, for he had a special status. Independent of the government, the Central Bank was pursuing its own political line. We can state without hesitation that for years on end the government has been adjusting its politics in tune with the Central Bank governed by Tigran Sargsyan. The Central Bank is a powerful state institution that has often been characterized by Armenian political economists as ‘a state within a state’, all thanks to the efforts of Tigran Sargsyan. He has had no trouble at all getting laws beneficial to the Central Bank from being passed in the National Assembly. He has also been able to recruit a corps of young, foreign educated professionals to the Bank. During the past few years the Armenian banking system has been given high marks by various international bodies and it is seen as the most stable of all state structures operating in Armenia today. The benefits that Tigran Sargsyan would bring to the government were obvious since none of the other ministers understood anything about international finance or monetary policy. Minister of Finance Vardan Khachatryan held no sway over the Central Bank President and the prime reason was that he was out of his depth at the Ministry. Tigran Sargsyan was one of Robert Kocharyan’s most trusted officials. The fall of the U.S. dollar proved to be his Achilles’ heel. Over the course of three years the dollar fell from a high of 580 drams to its present exchange rate of 300 drams. As a result of the evaluation of the dram, Armenian exports have taken a nosedive. The rise of the dram has forced many businesses to turn away from producing for export and in many cases has obliged other firms to close down completely. Also hard hit were average Armenian citizens who were relying on the remittances sent to them by relatives working abroad. The Central Bank painted all this as a part of its anti-inflationary policy. In reality, however, prices continued to rise as a result.

Tigran Sargsyan is also seen as a ‘dangerous’ official given that over a ten-year period as President of the Central Bank he has amassed a wealth of information regarding the ins and outs of the financial markets and the players involved.

Who proposed the nomination of Tigran Sargsyan in the first place? To be sure it wasn’t the Republican Party. Rather it was the former President Robert Kocharyan and Serzh Sargsyan that put their heads together and agreed on the idea. President Serzh Sargsyan didn’t even confer with the Republican Party on the matter; he simply presented the Party with his decision. It turned out that even those Republican Party members, waiting in the wings, who ruled out any likelihood of the Central Bank President being nominated, expressed their whole-heartened support of the decision. On the contrary, the nomination of Tigran Sargsyan was discussed with the leaders of the other political parties in the coalition, not with Republican Party leaders. All considered him to be an acceptable alternative. Today’s debate now centers on the distribution of ministerial posts among the parties and it appears that they aren’t enough available position to satisfy all. One thing that is becoming clear is that the Republican Party will probably come out the biggest looser as a result, with the fewest ministerial posts. But all this is still ahead of us.

This first step of Serzh Sargsyan has nothing to do with easing domestic political tension. Either his staff doesn’t comprehend the reality of the situation or they do so quite well and have chosen a path leading to Armenia’s further isolation. The new government will not last long if it follows this path.

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