VZCZCXRO4797
RR RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHYE #0013/01 0111445
ZNY CCCCC ZZH
R 111445Z JAN 10
FM AMEMBASSY YEREVAN
TO RUEHC/SECSTATE WASHDC 9928
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000013 
 
SIPDIS 
 
E.O. 12958: DECL: 01/10/2020 
TAGS: PGOV PREL PBTS TU AJ AM
SUBJECT: COVER ME, COVER YOU? PM SARGSIAN JOINS RULING PARTY 
 
YEREVAN 00000013  001.2 OF 002 
 
 
Classified By: CDA Joseph Pennington, reasons 1.4 (b,d). 
 
------- 
SUMMARY 
------- 
 
¶1. (SBU) The recent decision by Prime Minister Tigran 
Sargsian, two of his ministers, and a cohort of their 
reformist colleagues to join the ruling Republican Party of 
Armenia (RPA) has the political rumor mill in Yerevan 
churning. Some pundits view the unexpected development as a 
move taken by President Serzh Sargsian, the leader of the 
RPA, to shore up his political base and keep the ambitious 
Speaker of Parliament Hovik Abrahamian at bay. Others view it 
as a necessary move by the PM to keep competitors at bay and 
to secure his job. Some speculate that the President is 
strengthening his defenses in anticipation of the inevitable 
political assaults should his signature foreign policy move 
-- rapprochement with Turkey -- fail. END SUMMARY. 
 
--------------------------------------------- 
PM SARGSIAN, OTHER REFORMERS JOIN REPUBLICANS 
--------------------------------------------- 
 
¶2. (SBU) On November 17, an RPA spokesperson unexpectedly 
announced that Prime Minister Tigran Sargsian (no relation to 
President Sargsian) had joined the RPA, and was selected to 
join the party's Executive Committee, the RPA's top 
decision-making organ, headed by President Sargsian.  A week 
later, on November 25 (three days before the RPA's annual 
convention), it was announced that the PM's two leading 
pro-reform colleagues, Economy Minister Nerses Yeritsian and 
Finance Minister Tigran Davtian, along with the PM's chief of 
staff, a deputy finance minister, and five other senior 
government officials close to the PM, also joined the RPA. 
(Note: Neither the PM nor his two ministers had any recent 
political affiliation, with the PM serving as the 
nonpolitical governor of the Central Bank of Armenia from 
1998-2008, until his appointment as PM. End Note.) 
 
¶3. (SBU) None of the officials commented on their decision to 
join the RPA. RPA spokesperson and MP Edward Sharmazanov told 
the media that the PM's decision should not have come as a 
surprise, "because Tigran Sargsian is a representative of 
President Sargsian's political team and the Republican Party 
council supported his appointment as prime minister." PM 
Sargsian's first public comment on his decision came on 
December 25, when he noted in an interview that "I have 
always appeared on behalf of that political team which was 
providing guidance to the President of the Republic." (Note: 
In the 1990s, Sargsian was a member of the National 
Democratic Union, a once-influential opposition group, but 
dropped any political affiliation once he became the CBA 
governor. End Note.) 
 
----------------------------- 
VARIED REACTIONS TO PM'S MOVE 
----------------------------- 
 
¶4. (SBU) Depending on their political affiliation, local 
pundits have sought to spin the PM's and his allies' joining 
the RPA in ways that advance their own agendas. Levon 
Zurabian, Coordinator of the 17-party opposition Armenian 
National Congress, derided the move, sarcastically commenting 
that "I guess that's a stage through which everyone in that 
criminal-oligarchic clan must go -- so we congratulate Tigran 
Sargsian on joining the mafia." 
 
¶5. (SBU) Noting that a lack of a "political support base" had 
been a problem for the PM, Ara Nranian, an MP from the 
nationalist opposition Dashnaktsutiun party, saw the move as 
the PM's attempt to shore up his own position and "prolong 
the existence of his government." The RPA MP Karen Avagian 
said he saw no political machinations behind the PM's 
decision, and refuted speculation that the RPA forced the PM 
to join it, arguing that "everyone decides for himself which 
party to join." 
 
¶6. (SBU) But Yervand Bozoyan, a local political analyst, 
stated that dissatisfaction had been brewing inside the RPA 
about the PM's apparent reluctance to join its ranks since 
becoming PM in April, 2008. Bozoyan noted that "if the prime 
minister is one of them (a member of the ruling party), the 
authorities certainly feel stronger." 
 
----------------------------- 
YOU COVER ME, I'LL COVER YOU? 
----------------------------- 
 
¶7. (SBU) Richard Giragosian, director of the Armenian Center 
for National and International Studies (ACNIS) think tank in 
Yerevan, told us that he viewed the move as one made by 
 
YEREVAN 00000013  002.2 OF 002 
 
 
President Sargsian to make him less vulnerable to challenges 
to his rule.  By bringing the PM into the ruling party, the 
PM -- and by extension  President Sargsian -- are less 
vulnerable to "palace coups" orchestrated by party insiders 
in opposition to the government's unpopular policies. 
 
¶8. (SBU) Among the president's and prime minister's perceived 
vulnerabilities, the tortuous normalization process with 
Turkey figures at the top of the list.  A misstep here, 
particularly one that involves one-sided concessions on 
Nagorno-Karabakh to secure an open border with the Turks, 
could throw open the door to political challengers. Meanwhile 
the PM struggles to overcome the 18 percent drop in Armenia's 
2009 GOP, most of which was a result of the prevailing global 
financial crisis, but which was exacerbated by Armenia's lack 
of economic diversification. 
 
---------------------------------- 
KEEPING SPEAKER ABRAHAMIAN AT BAY? 
---------------------------------- 
 
¶9. (SBU) Often cited as the leading candidate to become 
Armenia's next prime minister -- before perhaps making a run 
at the presidency -- is the ambitious Speaker of Parliament 
Hovik Abrahamian, who managed Serzh Sargsian's 2007 
parliamentary election and 2008 presidential election 
campaigns. Abrahamian's intentions, according to many 
observers, became more evident when his son married the 
daughter of Armenia's most famous and likely its most wealthy 
business tycoon, Gagik Tsarukian, last fall. Tsarukian, 
leader of the Prosperous Armenia party (the RPA's junior 
partner in the ruling coalition), is widely viewed as an ally 
of President Sargsian's predecessor, ex-President Robert 
Kocharian. Recently there have been media allegations that 
Abrahamian and Tsarukian are coordinating their political 
actions with Kocharian, in preparation for challenging 
President Sargsian should Sargsian make a political decision 
viewed as contrary to Armenia's national interests. 
 
------- 
COMMENT 
------- 
 
¶10. (C) When President Sargsian chose the technocrat CBA 
governor to be his prime minister, many predicted that PM 
Sargsian would not remain long in office, given his lack of 
political affiliation and benefactors in the rough-and-tumble 
world of Armenian politics. And as long as PM Sargsian has 
been in office, rumors have circulated of his imminent 
ouster, with the rumors peaking in intensity whenever the PM 
announces an anti-corruption measure or policy that appears 
to step on the toes of the oligarchs. The PM has defied the 
pundits and the rumors, however, in large part because of the 
quiet yet steady backing of President Sargsian. 
 
¶11. (C) We believe that by bringing the PM and his allies 
under the protective "roof" of the ruling RPA, and placing 
the PM on the party's Executive Committee, President Sargsian 
has effectively signaled that an attempt to undercut the PM 
is essentially an attempt to undercut the RPA -- which he 
leads -- and thus himself.  The message is targeted toward 
those within the RPA who may have an eye on the PM's chair or 
higher, and those who don't like the president's 
normalization or Nagorno Karabakh policies. It's less likely 
a message to the oligarchs about reforming their business 
practices, as President Sargsian and the RPA cannot afford 
jeopardizing the financial and organizational support that 
these actors provide at election time -- no matter what the 
PM may have in mind. 
 
¶12. (C) As the prospects for normalization grow dimmer, 
perhaps dealing a significant blow to President Sargsian's 
reputation as steward of Armenia's national interests, the 
President needs to ensure that his hold on power is secure 
and internal threats kept in check.  One way of doing this is 
to make his prime minister a stronger political figure who 
will protect his back during the bumpy road ahead. And in the 
process, the PM himself becomes a more formidable player who 
will have a bit more latitude to pursue his reform agenda. 
PENNINGTON