Three of the critical factors in your assessment are ‘economic growth’, ‘construction’ and ‘karabakh’. The first is hailed by the World Bank and the IMF as having been driven mainly by Foreign Direct Investment (FDI); but that has simply been the illegal transfer of state assets (which belonged to the people of Armenia) to state connected cronies, who have represented themselves through overseas organizations. The second is the same corrupt state connected cronies laundering their ill-gotten gains, again at the expense of the people of Armenia. And the third, eventual resolution of Karabakh, is directly tied to the construction boom and to the present fight for the Presidential palace.

You say the real-estate market is booming, and it is true that Yerevan is now home to recently built apartments sufficient to house tens of thousands. But although the construction has been going on since the turn of the century, latterly increasing in pace, but with notably reduced quality, the apartment buildings continue to stand empty. And according to the WB and the IMF, through the same period of time Armenia’s population has decreased by some 500,000, the main factor in the poverty reduction equation; the lesser-privileged having been forced to leave the Republic. So presumably Armenia needs less housing not more.

The question is, why have the corrupt Armenian cronies pumped billions of dollars into these major construction projects, when there is apparently no sign of the punters ready to lay down the cash to become a part of the Armenian economic boom.

The answer is tied to Karabakh, and if Sergic manages to keep his Presidential seat, then his cronies will soon be cashing in on their years of illicit investments and the catastrophic results will soon become very apparent.

If you care to look at my ‘Blowing the World Bank Whistle’ blog (http://better-not-wb-the-wb.blogspot.com/
2008/02/world-bank-armenia-corruption-politics.html) you will find the reality of what has been going on in Armenia since the turn of the century, driven by the WB and the IMF, and how a very influential international group has been pressing for the past year to have it exposed.

Because of the oligarchs and their building projects (many of which may be money laundering schemes) in down town Yerevan, the real-estate market is booming. This is good for those that own but for many others it is a horrible mess. (Some are selling thir apartments and moving out of town and living off the money, simply because they cannot find jobs and cannot afford the higher prices for everything.) An apartment that would have cost $200 to rent in 2001 is now closer to $1000.

Prices for everything else have gone up too due in part to the fact that the President has not resolved the Karabakh problem. (Ter-Petrosyan was nudged out of office on the grounds that he wanted to resolve it. Now the Government is saying the whole thing is his fault…) Prices are also higher because the import of many things (like sugar) is controlled by the oligarchs. One oligarch holds the right to import sugar and can set the price at almost what ever he wants.

What is even worse is that the Dram, the local currency, is being manipulated by the government to benefit their overseas investments and exit plans, in case they can’t intimidate the population into bowing down to their authority. The value of the Dram is artificially inflated in relation to the Euro and Dollar, the dollar more so than the Euro. (It is controlled by the central bank which is run by one of the presidents close yes me.) This however, has not helped lower the price of imports and has hurt the local businesses. It hurts Armenian’s who get money sent to them from relatives living abroad, especially from the US. They get screwed on the exchange rate and the government benefits—they are buying cheap dollars, stealing the money and then investing it abroad.

Things look better here but it is all on the surface. Those that are doing better are doing a bit better. Those that were good before are astronomically better. Those that were not doing so well (especially the older generations) are doing worse. And unless you want to submit to the corruption and near lawlessness of the ruling administration you will not get anywhere. I am not sure the demonstrations will make a difference but I firmly believe that things do need to change, the current regime is not good for the people of Armenian.