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Fundamental Reform Can Secure Armenia’s Long-Term Future

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In the past year, the world has changed an unfathomable amount; every country has faced new challenges in the face of the Covid-19 pandemic and the subsequent economic recession. The new global situation presents not only challenges but also the opportunity to think about new ideas, to work out how our energy and focus can be used to create a better future for individuals across the world.

Armenia is one country that has faced existential crisis in the past year; the pandemic, the economic crisis and of course the war in Artsakh. The war has exacerbated socio-economic issues, aggravated social division and resulted in ongoing political instability –all factors that have raised questions about Armenia’s future as a nation and on the global stage. Despite the pain of the last year, it has also given us the opportunity to reflect and rethink our model for fundamental reform in Armenia.

I have long argued that for Armenia to be truly successful, we need to unite and focus on the country’s future. We have a historic responsibility to our ancestors, those who faced persecution, to heal from the past and build a successful country for our children. By building on our unique identity and historic experiences, we can use them to guide our future. However, first we must face up to serious questions on how we would like Armenia to look in twenty to thirty years’ time.

Currently, lack of opportunity is causing Armenians to vote with their feet and leave the country, with an estimated 200,000 intending to leave Armenia this year. To stop this, we must together provide a future of opportunity and belief in success stemming from a change in mindset.

I do not believe that all of the problems we face can be solved by the Armenian state. Instead, both the Armenian authorities and the diaspora should leave political disputes aside in order to consolidate and, alongside international specialists and humanitarian organisations, assist in the building of new institutions, good governance and the development of the country. Engaging with international partners is critical to raising standards and finding effective solutions.

So far, attempts at developing Armenia have been blighted by a failure to unite and mobilise both the nation and diaspora. It is not an easy task, currently there are roughly 10 million Armenians living in over 100 nations. However, we must transform the relationship to one of interdependence and trust.

Until now, members of the diaspora have largely been viewed as a source of charitable aid – this causes disconnect and indifference. Instead of charity, which I believe is detrimental to Armenia’s future as it prevents organic, conducive reforms, the diaspora should invest in long-term projects with meaningful impacts. I believe a shared vision and hope for Armenia can be created through collaboration and the implementation of impact investment. However, a strong Armenian diaspora must become more aware of their responsibility in helping the Armenian nation develop, and by updating and strengthening their institutions, enhance and ensure the preservation of Armenian worldwide heritage.

Commitment and shared responsibility will encourage desire for success and provide a crux for wider development. A blend of commercial, social and philanthropic projects will help build a better more sustainable future for Armenia. Multi-purpose anchor projects – breakthrough projects used to serve the interests of the nation and its people – will help societal evolution.  Anchor projects in the education, technological, scientific and tourism sectors will serve as a way to unite a fragmented nation, by drawing people together through communication and exchange of ideas. Long-term investment and visionare necessary, as social impact investments slowly manifest themselves over 20-25 years. Therefore, close working relationships are essential, investors need to want to be part of the conversation and want to see the projects evolve to impact the wider community.

Re-establishing Armenia as a hub of excellence in education would not only aid development and attract investment, it would attract others to the country. Investment into educational projects is investing in Armenia’s future, and promotes talent, trust, collaboration and multiculturalism –in doing so educational projects have wide-ranging personal, local and global impact. Armenia has already shown it has the potential for success in the educational sphere; with the Tumo Centre, American University in Armenia, Russian-Armenian University, French University and United World Colleges movement all having centres in Armenia. We must utilise the opportunities we have for the implementation of further educational projects.

Additionally, investment into the science and technological space would have wide reaching effect. The development of science and technology is both tangible and lucrative.It will also drive explosive growth in the health, environment and knowledge economies. The FAST Foundation is leading the way in innovation in Armenia, numerous projects support budding scientists, technologists and innovators in Armenia and the global stage. It will amplify and empower scientific advancement in the country, aiming to position Armenia as the technical and scientific hub of the region.

By fostering a competitive economy in Armenia, we can attract further foreign direct investment and also immigration. Additionally, we need to encourage good governance by developing effective and accountable governmental and societal institutions, which commit to excellence and professionalism. Impact investment and the championing of good governance will create an attractive Armenia, where not only Armenians want to live, but also the diaspora, international students and businessmen and women. This would bolster demographic security by dampening the desire for emigration and creating the social and economic atmosphere needed to raise the birth rate in the country. A growing population would mean a larger workforce, which would allow Armenia to become a self-sufficient global player, one that can build regional and global alliances.

Whilst our geographical location at the crossroads of civilisations brings many benefits, we also face regional security threats, which was painfully evident during last year’s 44-day war. In order to bolster Armenia’s position regionally, we must first acknowledge our security situation and construct a more effective and forward-looking defence system. This will take a shift in thinking and a significant increase in spending, but more modern military thinking is needed to protect our borders and people. A reinforced and innovative security system will allow us to look forward and act to guarantee Artsakh’s physical freedom and security.

Armenia faces many challenges, but it also has a number of strengths and competitive advantages – which we must use; not only do the diaspora provide resources and experience of other systems, we are bilingual nation and a nation located at the cross-roads of four civilisations. Armenia’s geography between the Middle East, Europe and the Caucasus means we can take advantage ofa working relationship with the European Union through the Eastern Partnership whilst being a member of the Eurasian Economic Union and Commonwealth of Independent States. Russia in particular is interested in Armenia being competitive, and at the same time is the right ally to ensure regional security.

If we build on these advantages and focus on inter-dependency and responsibility, Armenians and the Armenian diaspora, in collaboration with international partners and humanitarian institutions, can build a successful country. By developing on a local level, we can look to eradicate inequality and push for a fairer more open society, one that is beneficial for all Armenians.

A strong Armenia with modern institutions and a well-educated society will improve the country’s position regionally and on a global scale; allowing Armenia to become a bridge between cultures and organisations.

Ruben Vardanyan is an impact investor, social entrepreneur and business leader. He is the former CEO of Troika Dialog which became the pre-eminent local investment bank in Russia, and has co-founded a number of global initiatives and charitable organisations, including Moscow School of Management SKOLKOVO, the United World College (UWC) in Dilijan, and the Aurora Humanitarian Initiative. Through his family's charitable foundation, RVVZ, Ruben and his partners have invested more than $600M in projects in Armenia.

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Eastern Europe

Unhappy Iran Battles for Lost Influence in South Caucasus

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Events that might not matter elsewhere in the world matter quite a lot in the South Caucasus. Given a recent history of conflict, with all the bad feelings that generates, plus outside powers playing geostrategic games, and its growing importance as an energy corridor between Europe and Central Asia, the region is vulnerable. 

This has been worsened by the two-year-long Western absence of engagement. In 2020, Europe and the U.S. were barely involved as the second Nagorno-Karabakh war broke out between Armenia and Azerbaijan, leaving about 7,000 dead. With tensions now on the rise between Azerbaijan and Iran, Western uninterest is again evident, even though this might have wider ramifications for future re-alignment in the South Caucasus. 

The drumbeat of Iranian activity against Azerbaijan has been consistent in recent months. Iran is getting increasingly edgy about Israel’s presence in the South Caucasus — hardly surprising given Israel’s painfully well-targeted assassination and computer hacking campaigns against nuclear staff and facilities — and especially its growing security and military ties with Azerbaijan, with whom Iran shares a 765km (430 mile) border. Iran has also voiced concern about the presence in the region of Turkish-backed Syrian mercenaries, who were used as Azeri assault troops last year.  

Much of the anger has been played out in military exercises. The Azeri military has been busy since its victory, exercising near the strategic Lachin corridor which connects the separatist region to Armenia, and in the Caspian Sea, where it has jointly exercised with Turkish personnel. Iran, in turn, sent units to the border region this month for drills of an unstated scale. 

This week, the Azeri and Iranian foreign ministers agreed to dial down the rhetoric amid much talk of mutual understanding. Whether that involved promises regarding the Israeli presence or a pledge by Iran to abandon a newly promised road to Armenia was not stated. 

Iran’s behavior is a recognition of the long-term strategic changes caused by the Armenian defeat last year. Iran has been sidelined. Its diplomatic initiatives have failed, and it has been unwelcome in post-conflict discussions. 

It is true that Iran was never a dominant power in the South Caucasus. Unlike Russia or Turkey, the traditional power brokers, it has not had a true ally. Iran was certainly part of the calculus for states in the region, but it was not feared, like Russia or Turkey. And yet, the South Caucasus represents an area of key influence, based on millennia of close political and cultural contacts. 

Seen in this light, it is unsurprising that Iran ratcheted up tensions with Azerbaijan. Firstly, this reasserted the involvement of the Islamic Republic in the geopolitics of the South Caucasus. It was also a thinly-veiled warning to Turkey that its growing ambitions and presence in the region are seen as a threat. In Iran’s view, Turkey’s key role as an enabler of Azeri irridentism is unmistakable. 

Turkish involvement has disrupted the foundations of the South Caucasian status quo established in the 1990s. To expect Turkey to become a major power there is an overstretch, but it nevertheless worries Iran. For example, the recent Caspian Sea exercises between Azerbaijan and Turkey appear to run counter to a 2018 agreement among the sea’s littoral states stipulating no external military involvement. 

The Caspian Sea has always been regarded by Iranians as an exclusive zone shared first with the Russian Empire, later the Soviets, and presently the Russian Federation. Other littoral states play a minor role. This makes Turkish moves in the basin and the recent improvement of ties between Azerbaijan and Turkmenistan an unpleasant development for Iran — fewer barriers to the Trans-Caspian Pipeline threatens the Islamic Republic’s ability to block the project.  

This is where Iranian views align almost squarely with the Kremlin’s. Both fear Turkish progress and new energy routes. The new Iranian leadership might now lean strongly toward Russia. With Russia’s backing, opposition to Turkey would become more serious; Iran’s foreign minister said this month that his country was seeking a “big jump” in relations with Russia. 

The fact is that the region is increasingly fractured and is being pulled in different directions by the greater powers around it. This state of affairs essentially dooms the prospects of pan-regional peace and cooperation initiatives. Take the latest effort by Russia and Turkey to introduce a 3+3 platform with Armenia, Azerbaijan, and Georgia, as well as Iran. Beyond excluding the West, disagreements will eventually preclude any meaningful progress. There is no unity of purpose between the six states and there are profound disagreements. 

Thus, trouble will at some point recur between Iran and Azerbaijan, and by extension Turkey. Given the current situation, and Iran’s visible discontent, it is likely it will take some kind of initiative lest it loses completely its position to Turkey and Russia. 

Author’s note: first published in cepa

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Eastern Europe

Right-wing extremist soldiers pose threat to Lithuania

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It is no secret that Lithuania has become a victim of German army’s radicalization. Could this country count on its partners further or foreign military criminals threaten locals?

It is well known that Germany is one of the largest provider of troops in NATO. There are about 600 German troops in Lithuania, leading a Nato battlegroup. According to Lithuanian authorities, Lithuania needs their support to train national military and to protect NATO’s Central and Northern European member states on NATO’s eastern flank.

Two sides of the same coin should be mentioned when we look at foreign troops in Lithuania.

Though Russian threat fortunately remains hypothetical, foreign soldiers deployed in the country cause serious trouble. Thus, the German defence minister admitted that reported this year cases of racist and sexual abuse in a German platoon based in Lithuania was unacceptable.

Members of the platoon allegedly filmed an incident of sexual assault against another soldier and sang anti-Semitic songs. Later more allegations emerged of sexual and racial abuse in the platoon, including soldiers singing a song to mark Adolf Hitler’s birthday on 20 April this year.

It turned out that German media report that far-right abuses among the Lithuania-based troops had already surfaced last year. In one case, a soldier allegedly racially abused a non-white fellow soldier. In another case, four German soldiers smoking outside a Lithuanian barracks made animal noises when a black soldier walked past.

Lithuania’s Defence Minister Arvydas Anušauskas said later that the investigation was carried out by Germany and that Lithuania was not privy to its details. The more so, Lithuania is not privy to its details even now. “We are not being informed about the details of the investigation. […] The Lithuanian military is not involved in the investigation, nor can it be,” Anušauskas told reporters, stressing that Germany was in charge of the matter.

Ms Kramp-Karrenbauer, German defence minister, said that these misdeeds would be severely prosecuted and punished. Time has passed, and the details are not still known.

It should be said Germany has for years struggled to modernize its military as it becomes more involved in Nato operations. Nevertheless problems existed and have not been solved yet. According to the annual report on the state of the Bundeswehr made in 2020 by Hans-Peter Bartel, then armed forces commissioner for the German Bundestag, Germany’s army “has too little materiel, too few personnel and too much bureaucracy despite a big budget increase.” Mr Bartels’ report made clear that the Bundeswehr continues to be plagued by deep-seated problems. Recruitment remains a key problem. Mr Bartels said 20,000 army posts remained unfilled, and last year the number of newly recruited soldiers stood at just over 20,000, 3,000 fewer than in 2017. The other problem is radicalization of the armed forces.

Apparently, moral requirements for those wishing to serve in the German army have been reduced. Federal Volunteer Military Service Candidate must be subjected to a thorough medical examination. Desirable to play sports, have a driver’s license and be able to eliminate minor malfunctions in the motor, to speak at least one foreign language, have experience of communicating with representatives of other nationalities, be initiative and independent. After the general the interview follows the establishment of the candidate’s suitability for service in certain types of armed forces, taking into account his wishes. Further candidate passes a test on a computer. He will be asked if he wants study a foreign language and attend courses, then serve in German French, German-Dutch formations or institutions NATO.

So, any strong and healthy person could be admitted, even though he or she could adhere to far-right views or even belong to neo-Nazi groups. Such persons served in Lithuania and, probably, serve now and pose a real threat to Lithuanian military, local population. Neo-Nazism leads to cultivating racial inequalities. The main goal of the neo-Nazis is to cause disorder and chaos in the country, as well as to take over the army and security organs. Lithuanian authorities should fully realize this threat and do not turn a blind eye to the criminal behaviour of foreign military in Lithuania. There is no room to excessive loyalty in this case.

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Eastern Europe

Lithuanian foreign policy: Image is everything

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It seems as if Lithuanian government takes care of its image in the eyes of EU and NATO partners much more than of its population. Over the past year Lithuania managed to quarrel with such important for its economy states like China and Belarus, condemned Hungary for the ban on the distribution of images of LGBT relationships among minors, Latvia and Estonia for refusing to completely cut energy from Belarus. Judging by the actions of the authorities, Lithuania has few tools to achieve its political goals. So, it failed to find a compromise and to maintain mutually beneficial relations with economic partners and neighbours. The authorities decided to achieve the desired results by demanding from EU and NATO member states various sanctions for those countries that, in their opinion, are misbehaving.

Calling for sanctions and demonstrating its “enduring political will”, Lithuania exposed the welfare of its own population. Thus, district heating prices will surge by around 30 percent on average across Lithuania.

The more so, prices for biofuels, which make up 70 percent of heat production on average, are now about 40 higher than last year, Taparauskas, a member of the National Energy Regulatory Council (VERT) said.

“Such a huge jump in prices at such a tense time could threaten a social crisis and an even greater increase in tensions in society. We believe that the state must take responsibility for managing rising prices, especially given the situation of the most vulnerable members of society and the potential consequences for them. All the more so as companies such as Ignitis or Vilnius heating networks “has not only financial resources, but also a certain duty again,” sums up Lukas Tamulynas, the chairman of the LSDP Momentum Vilnius movement.

It should be said, that according to the Lithuanian Department of Statistics, prices for consumer goods and services have been rising for the eighth month in a row. According to the latest figures, the annual inflation rate is five percent.

Earlier it became known that in 2020 every fifth inhabitant of Lithuania was below the poverty risk line.

Pensioners are considered one of the most vulnerable groups in Lithuania. In 2019, Lithuania was included in the top five EU anti-leaders in terms of poverty risk for pensioners. The share of people over 65 at risk of poverty was 18.7 percent.

In such situation sanctions imposed on neighbouring countries which tightly connected to Lithuanian economy and directly influence the welfare of people in Lithuania are at least damaging. The more so, according Vladimir Andreichenko, the speaker of the House of Representatives of the Belarus parliament, “the unification of the economic potentials of Minsk and Moscow would be a good response to sanctions.” It turned out that Lithuania itself makes its opponents stronger. Such counter-productiveness is obvious to everyone in Lithuania except for its authorities.

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