Utility Bills and Deep Pockets: What #ElectricYerevan Really Means

Analysis of ElectricYerevan from Western and Russian media have largely mischaracterized the movement, but it is straightforward economic reasons that drive protestors' frustrations and are subsequently subject to geopolitical maneuvering.


Electric Yerevan's Evolution

Last week, Yerevan was rife with protest. Dubbed “Electric Yerevan,” the protests are aptly named considering that they began when Russian owned utilities firms dramatically raised prices for Armenian customers. However, this week, they have evolved in violence, scale, and political impetus.  This development was primarily caused by a June 22nd attempt by authorities to break up the demonstrations and more than 240 people were arrested, including several journalists.

The protests now represent an outward showing of Yerevan’s youth who seem to be fed up with what they believe is political and economic subservience to Russia and its firms’ commanding presence in their country.  Jamestown Foundation political scientist, Armen Grigorian wrote, “Armenian officials’ habitual servile attitude towards the Russian has been paid for by Armenia’s ordinary citizens.”

This move is nearly ten years in the making, when in 2006 complete power of the Armenian grid was handed to Russia and Western institutions voiced concern about the deal’s value. However the deal resulted in extremely cheap energy prices for Armenian customers.  Herein lie the roots of the protests in Yerevan, which are quite contrary to the analyses being offered by either the West or post-Soviet states. It seems that once again economics are bringing political dissent to the surface in post-Soviet states.  It is highly unlikely that Electric Yerevan will destabilize Yerevan as the Euromaidan movement did to Kyiv, but regional governments cannot ignore this trend of protests.


Economics Puts People on the Street. Politics Keep Them There

The mechanics of the rate hike are critical to analyzing the reason why people took to the streets of Yerevan. The Armenian Dram has endured a year of poor performance, and sharply devalued energy payments to Russia, forcing the rate hike to maintain the solvency of Inter RAO, owner of Armenia electricity network.

However, It is also a difficult time for consumers paid in Rubles, Dram, or Laris. This is why the protests have remained distinctly non-partisan in Yerevan. Armenian youth seem to be on the streets to highlight personal economic plights. This narrative is becoming increasing salient across post-Soviet republics, where the economic dreams on the 1990s are left unrealized thanks to poor governance and systemic corruption. This is why responding with water cannons seems to put more people on the street than send them home. These citizens are more concerned about their next meal than quarterly statements and geopolitics.

Beyond the simple calculus of Armenia’s citizens, Electric Yerevan is yet another example of a paradigm-changing dynamic in Post-Soviet political economies.  This is the notion that economic entanglement is no longer conducive to partnership, but might be the primordial source of conflict when shocks and crises arise. Economic entanglement was the post-war impetus for Europe to establish its economic community and later the European Union.

But in contemporary political economy, interstate relations have taken on an increasingly combative tone in their economic policies. Russia’s illiberal political alternative has found a third way of interstate relations in today’s globalized world. This doctrine lies within a very pointed and geopolitically minded coordination of both economic and political levers. For states like Armenia and Ukraine, which are so economically entangled with the Kremlin, these relationships have become liabilities instead of insurance policies. Yerevan authorities currently walk a thin line between maintaining their critical relationship with Moscow and not inciting more violence.

This task is made more difficult by Russian media, Western analysts, and Armenian politicians – all of which clamored to politically capitalize on the populist movement. Armenian lobbyist and scholar Armen Sahakyan astutely wrote on his Facebook page, “Despite the fact that there is no political pro-western or pro-Eastern undertone of the protests at the moment, there is no doubt actors on all sides of the aisle are already trying to manipulate it." This practice runs the risk of taking the voice of Armenia’s youth and distorting it into a geopolitical agenda, and once again the economically disadvantaged voices will be downed out. For Russia, new threats against its power emerge when its privileged position in the region is challenged.


What this Means for Russian Economic Power

From Moscow’s perspective, thousands of people in Yerevan’s Freedom Square must be concerning. Armenia has been one of the most stalwart partners of the Kremlin in the last two years as Moscow has burnt several of its diplomatic bridges.

For Moscow’s Eurasian Economic Union (EEU) to be successful, Moscow needs to maintain its economic interests in the signatory states. A more prudent approach to its strong relationship with Armenia would be to provide development opportunities instead of usurping them for their last unit of value. #ElectricYerevan truly was no Maidan, and Russia should direct its worry elsewhere. It is no Western stoking of unrest into something bigger. It is also more than angst toward Russia. #ElectricYerevan is about Armenian livelihoods. The streets of Yerevan were filled with people who would rather pay tuition on degrees, or buy the latest iPhone instead of paying an arbitrarily set price to a utilities company, no matter who owns it.

The EEU was supposed to reduce cost of industry and utilities across its member states, rather it seems as if it making small states subservient to the interests of Russian corporations. If this is to be the treatment of Moscow towards its EEU partners, then the union will not last long. The Kremlin would see much greater return from playing a more cooperative game. 


Photo courtesy of Wikipedia