Armenia's New Pro-Biz Prime Minister

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In an effort to combat corruption and improve the tax system in this close-knit nation of 3 million people, the prime minister announced on 19 June the creation of a council to monitor the customs service and tax collections. He also set up telephone hot line to record feedback and complaints.

DIFFICULT HURDLES AHEAD

Sargsyan has promised to openly discuss these problems and make public cases when public servants are punished for breaching the rules.

"We have thousands of corrupt people and the problem is that even when we replace them with others, we have no guarantees the newcomers will not continue the tradition," he told an anti-corruption committee on 26 June. "We have 2,000 tax collectors in the tax agency, and 200,000 more dreaming of taking the position not because they are ready to honestly serve the country, but because they see it as an easy opportunity to get rich."

Whether Sargsyan can overcome entrenched interests and succeed is open to speculation. "It will take several months to reveal whether the middle and minor corrupt officials, or the ‘sharks,' have been made accountable," Manaseryan said. "It is still too early to make judgments whether the open and transparent work style will be compulsory for all, or just the PM and the colleagues obedient to his call. But I see no grounds to mistrust the newly appointed officials. At the same time I believe the atmosphere in which those promises were given will create more obstacles than favorable conditions for reforms."

Although Sargsyan is not aligned with a party, he calls the shots in parliament. The Republican Party controls 64 of the 131 National Assembly seats, and draws support from smaller political groups. Sargsyan's anti-graft campaign plays into the hands of the opposition, which for years has accused the leading party of arrogance and fostering corruption. After stormy parliamentary elections in 2007 and a bitter presidential contest earlier this year, the premier's polices may appeal to a disillusioned public thirsty for change.

President Serzh Sargsyan appointed Tigran Sargsyan prime minister on 9 April. (The men are not related.) The new premier is a graduate of the Yerevan State Institute of National Economy, and studied at the N. A.Voznesensky Financial-Economic Institute in Leningrad, now St. Petersburg. He's also been trained at Georgetown University's International Law Institute in Washington.

After serving in various government posts when Armenia gained independence in 1991, Sargsyan served as chairman of the Armenian Bankers' Association before moving to the Central Bank in 1997.

At 48, the guitar-playing father of three is a member of the Armenian Orthodox Church and is well known around the capital. During the blazing heat of Yerevan's summer, Sargsyan and his family are often seen at swimming pools in town.

REPUTATION HONED IN FINANCE

Sargsyan developed a reputation as a reformer while at the Central Bank, and won praise from international institutions for helping the country emerge from the dire economic conditions it endured after the collapse of the Soviet Union and its turf war with Azerbaijan. Armenia's economic fortunes have improved markedly in the past decade, including a decline in poverty and sharp rise in growth, but the World Bank and monitoring agencies say corruption and bureaucratic inefficiency continue to be a drag on the country's potential.

Dominique Strauss-Kahn, managing director of the International Monetary Fund, was among the first to congratulate Sargsyan when he became prime minister. "Numerous very important reforms were realized within your 10-year chairmanship of the Central Bank, including the alleviation of inflation, introduction of an effective system of bank supervision, and development of anti-laundering legislation." Strauss-Kahn also praised Sargsyan's "particular commitment to the continuity of reforms and intelligent governance."

But not everyone is so glowing. Levon Ter-Petrosian, a former president who lost to Serzh Sargsyan in the February election, recently told an opposition rally that as Central Bank chairman, Tigran Sargsyan cost the country dearly when he sold gold reserves for $17 million when prices were low.

"This is absurdity in all aspects," he told the rally. "Gold is the most liquid asset. States sell gold in serious situations when famine, war, natural disasters and other things threaten the country. What stupid man on earth would sell gold, when there are no such threats?"

Beyond combating corruption, the prime minister has vowed to improve the quality of public service, which in many offices still suffers from a Soviet-era work ethic.

"Our citizens' major complaints with the state here is that the state provides bad quality, untimely services and creates problems for them," Sargsyan told the National Assembly. "As a result we have serious complaints and mistrust in the government. The order given to all ministries and agencies was the following: ‘Together we have to catalog the services provided to our citizens and monitor their quality.' "

Sargsyan also wants overhaul the passport and visa agency. The government gets dozens of complaints about the agency from citizens and the country's large diaspora returning for work and holidays.

"Obviously, we have serious problem in this sphere. It's corruption — when the service is delivered in the name of the state, but money is extorted by a set price list," the prime minister said.

BURIED IN GRAFT

Sargsyan appears intent to tackle the graft that is inescapable in Armenia, even in death. "The corruption [in cemeteries] simply flourishes. If you want a proper burial plot, a big place, money will solve the problem. And the cynicism has reached its height and nothing keeps people back," the prime minister said in a speech on 26 June.

"Last week, we took part in the funeral of one of our chess grandmasters. He was a renowned, talented chess player; the chairman of the chess federation is the president of the republic, I am the deputy chair, which means that everyone was well aware we were in close contact with that talented chess player. However, no one appeared to be constrained from taking a bribe of $2,000 to provide a place in the cemetery."

Changing this system could take time and not everyone is convinced Sargsyan can succeed.

"Tigran Sargsyan seems a well-bred, smart person at first sight," said Gayane Ohanyan, 48, a resident of Yerevan. "He is well educated, has a lot of work experience. But it is unbelievable [that he can] make significant reforms in a corrupt system like this, especially as the officials are the bearers of the system of traditions."

Yerevan State's Manaseryan says Sargsyan's reform plans will take time, but are feasible. "The process of getting rid of weeds is never short."

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