The current year is particularly significant in shaping the continuity or change of these policies in the face of a fast-moving regional context. The United States appears to have largely disengaged from the South Caucasus since the election of Barack Obama in 2008 and the famous ‘reset’ of relations with Russia in the following year. The days when Sergei Lavrov could credibly, and somewhat denigratingly, refer to Georgia as Washington’s ‘pet project’ are long gone, and NATO membership is certainly discounted as a possibility in the short and medium-term by most observers. In Moscow, following the musical-chairs exercise between Putin and Medvedev, an externally assertive and internally repressive leadership is actively pushing the idea of a ‘Eurasian Union’ between the states of the former Soviet space. And in the region proper, all three (globally recognised) states are due to hold presidential elections – which, in Armenia, have already been won by the incumbent, despite of accusations of electoral fraud by the main challenger in the race. Will Yerevan, Baku and Tbilisi be able to continue on their chosen foreign policy paths following their ballots, in a fast-changing regional and global environment?

In Azerbaijan’s case, the answer seems clear: despite of some unrest in recent months, the opposition in Baku would seem unable to mount any kind of credible challenge to the Aliyev regime in the short to medium-term. On the contrary, confident in oil’s ability to ensure the acquiescence of Western capitals and of its own population, Baku has started actively challenging the role of pan-European and Western institutions in the monitoring of its commitments to Council of Europe and OSCE human rights and electoral standards, using a combination of assertive diplomacy and references to ‘national sovereignty’ reminiscent of discourses heard in Moscow. The , and pressures on other “fake”i.e. foreign-funded NGOs seem to fit into this overall pattern, echoing in Moscow.

The Aliyev regime’s coveted hydrocarbon reserves will probably allow it to continue testing the limits of its commitments to democratic reforms: Azerbaijan may or may not be in good stead with Western human rights institutions like the CoE or OSCE, oil and gas will continue flowing through the pipelines nonetheless. Its increasing challenges to these Western IGOs and NGOs are therefore not necessarily a move away from its previous, multi-vectoral approach, of balancing the West with Russia, in favour of Moscow. Neither should too much be read into the at Qabala last year: it will be easily replaced by a similar facility in southern Russia, and much of the resonance given to it in Azeri media was more an assertion of independence aimed at domestic audiences than a serious challenge to Russian regional predominance. Azerbaijan’s foreign policy will therefore be marked by continuity, of walking the tightrope between West and East, testing the limits of Western acquiescence to human rights abuses and regularly asserting independence in relation to Moscow, without, however, seriously challenging either side. In the immediate future, this attitude should also ensure Baku’s unwillingness to deliberately restart a war over the disputed enclave of Nagorno-Karabakh, even if Azeri threats to take the region by force in the absence of a final solution in its favour should not be taken lightly over the longer term.

While Armenia does have a slightly more assertive opposition than its arch-rival, its pro-Russian strategic orientation is, generally, not a matter for internal debate-the overwhelming majority of Armenia’s politicians don’t see an alternative to Yerevan’s links to Moscow. There are notable exceptions, most importantly, Sargsyan’s main challenger in the latest presidential vote – Raffi Hovannisian – who is on the record as suggesting that Armenia pull out of the Russia-centred CSTO alliance. It remains to be seen if he will be followed in this in other opposition groups, and, in any case, it does not appear his post-election challenge to Serj Sargsyan’s re-election will succeed any time soon. The main questions regarding Armenia’s strategic orientation will therefore continue to centre on rapprochement with Turkey, and on the extent to which Armenia will be able to maintain the elements of engagement with Western institutions (like the EU) in light of its pro-Russian strategy. Little is to be expected on the first issue, in the absence of any tangible progress on the Nagorno-Karabakh conflict – Ankara has made it abundantly clear in recent years that any progress in its relations with Yerevan would depend on an amelioration of relations with Baku. The is just another example of this stance, which is unlikely to change fundamentally in the immediate future.

On the issue of its relations with the EU and (or?) Russia, Armenia seems to be nearing a decisive crossroads: Brussels is holding out the prospect of the country signing an Association Agreement in the near future, which would in effect be incompatible with membership in Russia’s Eurasian Economic Community (EurAsEC), or an even deeper ‘Eurasian Union’. While avoiding membership of EurAsEC has been a longstanding Armenian policy (first justified through the requirements of WTO membership, which Armenia joined in 2003, well before the Russian Federation), the question is in how far this stance can be maintained in the face of Moscow’s renewed push for integration in the FSU. Two possibilities emerge: either Moscow is so confident of its dominant position in Armenia that Yerevan could get way with not joining EurAsEC, in light of the negligible marginal advantage this would afford Moscow; or Russia will insist on Yerevan following its lead, destroying one of the last elements of complementarity in Armenia’s foreign policy. Only time will reveal Putin’s openness to his only remaining South Caucasian ally’s surviving European aspirations; in any case, in view of its extreme strategic dependence on the Russian Federation, Yerevan would seem to have very little leeway if Moscow chose to press its case.

Tbilisi is where domestic and international conditions combine to create the greatest uncertainty regarding future policies vis-à-vis the West, and Russia. On the domestic level, much of this uncertainty relates to the country’s competing factions’ attitudes towards Moscow, complicated by an internal constitutional arrangement that is bound to shift in the coming year. On the international level, questions remain as to Moscow’s openness to co-operation with Tbilisi in spite of the latter’s stated intention to continue its Euro-Atlantic integration strategy. Finally, there is the contradiction between Georgia’s continuing insistence on Abkhazia’s and South Ossetia’s re-integration into its body politic, and Russia’s seemingly irreversible recognition of these entities as independent states.

The winner of last year’s parliamentary elections, the billionaire Bidzina Ivanishvili, has stated his intention of improving relations with Moscow while maintaining Georgia’s pro-Western strategy and striving for reunification with both separatist entities. With Georgia , his control of the legislature will become even more significant in determining the country’s foreign and security policies. His party’s victory in upcoming presidential elections, in October this year, would further strengthen his hand. But external policies have already been subjected to significant changes, even before these significant domestic transformations. The appointment of Zurab Abashidze – generally respected as an interlocutor in Moscow, Sukhumi and Tskhinvali – as the new prime minister’s envoy to talks with the Russians was one such move, so was the announcement of a , instead of the policy of isolation applied by the Saakashvili administration since the 2008 war. It must be stressed, however, that Ivanishvili and his Georgian Dream party have vehemently denied accusations from the president’s camp that they intend to abandon Georgia’s post-2003 policies of Euro-Atlantic integration, signing up to a joint parliamentary resolution strongly affirming the country’s Westward strategic gaze.

The key question remains whether such a strategic outlook would at all be compatible with improved relations with Moscow? In any case, it would go against Russian policies that have been well established in the post-Soviet era, and that vehemently oppose any Western encroachment on Moscow’s “sphere of special interest”. The initial optimism accompanying Georgian-Russian talks in Geneva has somewhat receded in recent months; the main indication of a potential warming of relations has been . Russia has moreover made it clear, in response to expressions of concern from Sukhumi and Tskhinvali, of what have, in essence, become its protectorates.

In short, improving relations with Moscow while striving for NATO membership would require squaring several circles. Even if the current Saakashvili-Ivanishvili standoff is resolved in the upcoming October presidential elections and constitutional alterations, difficult choices would have to be made. On the one hand, acquiescing to Moscow’s demands by dropping Georgia’s NATO aspirations (or pushing them into the indefinite long-term) would make Ivanishvili vulnerable to accusations of a sell-out on the domestic level. On the other hand, maintaining a pro-NATO course would most probably cause continuing consternation in Moscow, while offering little in terms of direct (security) benefits for the Georgian state. Considering the far lower ideological commitment of the ‘pragmatic’ Ivanishvili’s Georgian Dream to the latter (and his hitherto furious denials notwithstanding), a strategic readjustment in favour of the local hegemon, Russia, would seem to be a distinct possibility in coming months and years, especially in the absence of stronger American regional engagement. It remains to be seen whether such a scenario could make it through the inevitable domestic backlash it would provoke.

In sum, except in Georgia, the foreign policy landscape in the South Caucasus seems to be marked by continuity, at least given current conditions. But, as events in 2008 showed, the region remains plagued by insecurities and conflicts that remain fundamentally unpredictable. An unexpected event, a renewed conflagration in Nagorno-Karabakh, for instance, or sudden internal political unrest in any of the three recognised states might invalidate anything that is being said today about the future. But known unknowns and unknown unknowns being a feature of international politics, this is one uncertainty no one will be able to address any time soon.

Dr Kevork Oskanian, Visiting Lecturer, Department of Politics and International Relations,University of Westminster. April 2013.

Photo by Annette Teng, published under Creative Commons with no changes made. 

First, some background: for most of the post-war period, changes of government were far more likely to be prompted by a coalition partner’s change of heart than an election. Specifically, the liberal FDP played the role of “king-maker”, alternating between the Christian Democratic Union (CDU) – alongside its Bavarian CSU sister party – and the Social Democratic Party of Germany (SPD). Since the mid-1990s, that changed, with the FDP positioning itself as a market-liberal ally of the CDU/CSU, and the Greens becoming the SPD’s natural coalition partner. 1998 therefore saw a change of government brought about by an election, with Helmut Kohl’s CDU/CSU-FDP coalition ousted by an alliance between Gerhard Schröder’s SPD and the Greens.

In 2002, Schröder’s coalition pulled off an astonishing victory, successfully shifting the terms of political debate away from his (mediocre) economic record towards his attitude towards Iraq (rejecting German involvement) and flooding in eastern Germany. In 2005, Schröder’s luck ran out. He was forced to hold an early election after losing the support not only of the CDU/CSU-dominated upper house of the German parliament, but also a sizeable chunk of his own backbenchers over the controversial Hartz reforms to welfare. The CDU/CSU, by then with Angela Merkel at the helm, managed narrowly to overtake the SPD, but was then forced to invite precisely that party into a “grand coalition”. It would have preferred an alliance with the FDP, but that would not have given Merkel the majority she needed, as, put together, the SPD, Greens and the Left Party had more seats, yet a coalition involving the Left Party – a diverse and colourful grouping even by the standards of the far left – was unthinkable for the SPD and the Greens. The 2005 to 2009 period was unkind to the SPD, which found held in a tight embrace by Merkel’s CDU, and lost its distinctive profile (while Merkel’s party trimmed to the centre ground). As with previous grand coalitions – both in Germany and abroad – the 2009 election saw the two parties forming the government lose out to their minor competitors (the SPD, with 23%, getting its worst post-war result), and the Greens, Left Party and FDP all performed strongly. The SPD’s implosion, coupled with the FDP’s strength, this time allowed Merkel to form her preferred coalition with the FDP, an alliance which has bumbled along since.

As things stand, only two scenarios appear likely after September’s elections. The first is a continuation of the existing CDU/CSU-FDP coalition. A few months ago, with the FDP in chaos, this seemed unlikely–, it looked likely to get well below the 5% threshold required for seats in the German parliament, and its occasional policy interventions look like they might even provoke Chancellor Merkel to look elsewhere for a coalition partner. But after and a compromise having been reached in the FDP’s leadership crisis, .

The other potential scenario is a further grand coalition. This would occur if neither the CDU/CSU and FDP, nor the SPD together with the Greens, secures a majority, because of the presence of parties that neither would be willing to do business with. This might be the Pirate Party, in internal strife (currently hitting just 3% in the polls – a far cry from its successes in state elections over the past couple of years). More likely, the Left Party will act as the “spoiler” of a centre-left or centre-right majority. The Left Party remains unthinkable as a coalition partner for the SPD, and even Left Party support for a minority SPD/Green government was ruled out by the SPD’s leadership.

And here lies the first paradox: the SPD’s best chance of getting back into government lies in becoming the junior partner in a grand coalition. Yet precisely that role took it to its worst post-war election result back in 2009. It is almost guaranteed to lose its profile in a coalition alongside the CDU/CSU under Merkel, and its party members would likely become demotivated due to the sort of compromises necessary in such a coalition, with left-wing support haemorrhaging to the Left Party (or perhaps to the Greens). So the first paradox is that the SPD’s long-term interests may be served by losing out on joining the government this time around.

A second paradox is that voters wishing to issue a left-wing protest against austerity, if they vote for the Left Party, make the formation of a grand coalition more likely. Such a grand coalition will do very little to change the course of politics. Parties of the left and centre left might end up with a majority of seats in the German parliament, but this is most unlikely to result in the format of a left-wing government.

A third paradox is that, while debate over austerity in Europe rages, this is not the defining feature of the German election campaign. Notwithstanding a few rhetorical flourishes from the SPD’s leader, Sigmar Gabriel, the SPD’s campaign will certainly not include a full-frontal assault on austerity or suggest a radical shift in Germany’s course. There will be pledges to stabilise the banking sector (with a reiteration of German support for a Europe-wide tax on financial transactions), a desire to reduce inequality and support for a minimum wage across Germany. The draft manifesto presents interesting ideas about setting minimum levels of social and educational expenditure for EU members. But those hoping to see a radical shift in Germany’s approach to the Eurozone crisis are likely to be disappointed.

Faced with these three paradoxes, Germany’s election looks more likely to be a footnote in history than a European turning-point.

Dr Ed Turner, Lecturer in Politics at the Aston Centre for Europe, April 2013.

This briefing by Stephen Royle addresses growing concerns surrounding access to finance in the occupied Palestinian territories. Under occupation a rigid framework has been applied that has restricted development capabilities and therefore detached Palestinians living in Gaza and the West Bank from the formal financial sector.

About a year ago it seemed that the South Caucasus had to come to a standstill. In Georgia Mikheil Saakashvili’s party was expected to keep its leading role as the country was switching from a presidential to parliamentary republic. In Azerbaijan Ilham Aliev’s rule seemed as firm as ever. And in Armenia Serzh Sargsyan’s Republican Party, which convincingly won the parliamentary vote in May, seemed to be heading for a similar victory at the presidential polls. Today, however, things look different. New government has come to power in Georgia, while a new opposition movement is taking the streets in Azerbaijan. And in Armenia, a movement is emerging, which supporters of Hovannisian are calling ‘the revolution of hello’ or ‘barevolution’ , from the Armenian word barev – hello. (The name ‘revolution of hellos’ is a reference to Hovannisian’s campaigning style, when he was walking around the streets of Armenian cities and villages, greeting strangers in the street.)

The post-election developments in Armenia have been both predictable and unexpected. Predictable, as almost every major presidential election in Armenia has lead to similar political crises (in 1996, 2003-2004, 2008): incumbents have been declared winners in disputed elections and mass protests had been quelled by the government with use of force. On the other hand, the post-election developments were unexpected this time, since the last election campaign seemed to be different. While in previous elections the incumbents faced serious competition, this election outcome seemed to be decided even before the campaign began. The two most powerful Armenian political forces after the ruling Republicans, the Armenian National Congress (ANC) and “Prosperous Armenia” Party (PAP) decided not to take part in the election. Thus, most probable contenders, Armenia’s first president Levon Ter-Petrosyan, the leader of ANC, and one of Armenia’s richest people, former wrestler Gagik Tsarukyan, the leader of PAP, decided not to run in the upcoming elections. As PAP decided not to take part in the elections, another possible contender, former Foreign minister Vartan Oskanian, a PAP member, also was out of the game. With these political forces and leaders out of the picture, many observers believed that the fate of elections was decided.

Moreover, these elections could become the first election, in which the official results would be recognized not only by the designated ‘winners’ and government controlled courts but also by other political forces, civil society and even opposition supporters. Most previous elections, albeit to various extent, have been marred by accusations of fraud, refusal of the losing sides to accept official results, equivocal assessments of international observers, and criticism of the local civil society. But most of all the legitimacy of the elections suffered because of mass anti-government protests that usually followed the elections and were ultimately suppressed by the government with use of force. In this respect the 2008 protests were probably the most dramatic: the police crackdowns on March 1 lead to clashes between protesters and pro-government forces, which left 10 people dead and dozens wounded. Dozens of opposition activists were arrested or went into hiding, newspapers were suspended, web-sites were blocked, curfew was declared in the capital and the military were stationed on the streets of Yerevan. Armenia was on the brink of civil conflict.

In the five years that followed, the Armenian government, opposition and society managed to step away from the abyss, to which they came so close in 2008. Eventually opposition activists were released, newspapers were allowed to re-open and other restrictions on civil liberties were lifted. The government became more tolerant towards pluralism in the media than before 2008. However, the disputed elections and subsequent tragedy of March 1 meant that Sargsyan’s government did not enjoy legitimacy in the eyes of at least a large portion of Armenia’s population. The presidential elections of 2013, it seemed, would help to solve this problem. With all major challengers out of the picture, it seemed, the incumbent would receive a comfortable amount of votes, which would bring political legitimacy to the incumbent government both from within and outside of the country. Some analysts even argued that in 2013 the real problem for the incumbent was not to receive too many votes: a high percentage over 80 or 90 %, usually typical for hard-line dictatorial regimes, would expose the authoritarian character of Armenia’s political system and be disastrous for Armenia’s external image and especially its European aspirations.

However, this kind of idyllic picture was shattered by unexpectedly high results of one of the remaining opposition candidates, Raffi Hovannisian. Hovannisian, successful US-born lawyer, moved to Armenia in 1991, where he became the first minister of Foreign Affairs of Armenia, but soon resigned over disagreements with president Ter-Petrosyan. Since then he remained in Armenia, working mostly in a non-governmental sector, however some time later he moved into politics and created the opposition party Heritage, which became part of the National Assembly in 2007. In 2012 Hovannisian’s Heritage party did not do that well in the parliamentary elections, and received just a little over 5 %, even in spite the electoral alliance it formed with another party ‘Free Democrats’. Moreover, the alliance with the Free Democrats broke up, as the two parties started quarrelling over the few places they actually received in the new parliament. The modest showing of Hovannisian’s party at the parliamentary elections was probably one of the reasons why few observers and analysts expected him to present a serious challenge to the incumbent in the presidential poll. Moreover, Hovannisian seemed exactly the kind of challenger that could be comfortable from the government’s point of view: someone who could get enough votes to prove the democratic nature of the elections and yet not enough to deprive the incumbent of a victory. However, things did not work out quite that way.

Unexpectedly for most observers Hovannisian was able to consolidate the protest electorate. He ran a successful campaign, conducting a door to door campaign, visiting various regions of Armenia and different districts of the capital Yerevan. Greeting strangers in the street became Hovannisian’s trademark, it even became a subject of jokes and Internet memes. Many observers ridiculed Hovannisian’s campaign, calling to too American, unsuitable for post-Soviet context and therefore doomed to fail. However, many Armenian voters proved willing to accept Hovannisian’s down-to earth style of communication, which strongly contrasted with the paternalist style of most local politicians, whether government or opposition. However, probably the biggest contributor to Hovannisian’s success, ironically, was the government itself, which did its best to neutralize possible contenders in the course of political struggle in the run-up to the elections. As a result, disgruntled voters all over Armenia decided to express their protest against the current government by voting for Hovannisian.

It is hard to assess the veracity of the claims of both sides regarding the outcome of the elections. What is clear, however, is that, as it usually happens in countries with authoritarian or semi-authoritarian political systems, the votes, which the government received, are to a large extent a result of a wide use of administrative resources rather than genuine support. Therefore, a protest movement like the one lead by Hovannisian presents a deadly danger for the ruling government: as the examples of ‘Colour revolutions’ or ‘the Arab spring’ suggest, the government camp may disintegrate if the protest movement becomes strong enough.

The opposition, however, has its own issues. Hovannisian has so far not been able to create an alliance with the most influential opposition parties. It is also not so clear what effect would rallies have and how long will his supporters be able to sustain the momentum. As the experience of mass protests show, if the government forces exercise restraint and do not resort to violence or other inadequate steps, such protests tend to lose the momentum. The urge to keep the momentum was probably the main motivation behind the hunger strike declared by Hovannisian. Opposition can also use the upcoming municipal elections in the capital Yerevan to advance its demands. Given the importance of Yerevan as the centre of Armenia (about one third of Armenia’s population live here) this election may be instrumental as the key to power in the country, especially since the support for the opposition has traditionally been strong in Yerevan. However the success of the opposition in the local election depends on its ability to unite, which at least at this point seems quite a complicated task. Also a lot depends on the success of the so called ‘million’s march’, planned for April 9, the day of inauguration of Serzh Sargsyan.

Also, external support, which can be instrumental for success of similar movements, is missing. EU and US officials have already congratulated Serzh Sargsyan upon his election. As for Russia, given the recent rise of anti-Americanism and the paranoid fear of colour revolution among its political elite, it is extremely unlikely to welcome a pro-democracy protest movement, especially one lead by a US born diaspora Armenian. Even though in the past Putin’s government has been displeased with certain moves of Sargsyan, particularly his reluctance to join a customs union with Russia, it will probably see Sargsyan, a former Communist apparatchik, as the lesser evil compared to Hovannisian.

The government, however, also faces a serious challenge. The elections and post-election protests showed that discontent among the population is so high that the ruling government cannot be sure of its future, even if it manages to outplay its main political rivals. Only systemic reforms, aimed at reducing the monopolization of the economy and fighting corruption in the state apparatus can help to raise the standards of living and thus reduce the discontent. However, decisive reforms are not something a government with questionable legitimacy can afford, which means that the government has found itself in a vicious circle. The elections proved a defeat for a small group of younger politicians from the Republican party, who had an image of reformers or technocrats, as they were considered to be behind the election campaign strategy in the parliamentary elections of 2012 and the current presidential campaign. The unofficial leader of this group, Sargsyan’s son-in-law Mikayel Minasyan has been appointed Armenia’s ambassador to Vatican, which many observers interpret as ‘honorary exile’, marking the defeat of the reformers’ faction within the government. With its legitimacy challenged by opposition, Sargsyan’s government will have to rely more and more on the so called oligarchs and the corrupt state bureaucracy.

In any case, however situation develops, it is clear that a new political landscape is emerging in Armenia. Both the government camp and the opposition will emerge of the current post-election period thoroughly transformed. Together with the events in the neighboring Georgia and Azerbaijan, the ‘barevolution’ in Armenia is a sign that South Caucasus has a chance to shake off the image of a provincial Soviet backwater region with corrupt authoritarian regimes. In the late 1980s it was the South Caucasus where the processes that lead to the break-up of the Soviet system started. Who knows, may be the current developments in the South Caucasus are a sign that the times are changing in all of the post-Soviet region.

Mikayel Zolyan is historian and political analyst from Yerevan (Armenia). Currently, he teaches at several universities in Yerevan and works at Yerevan Press Club NGO in Yerevan.

Photo by TheFlyingDutchman, published under Creative Commons with no changes made. 

Mark Henstridge, Acting Executive Director, International Growth Centre.

Vanessa Erogbogbo, Independent Consultant.

Barclay O’Brien, AYANI Consultants & Opportunity International.

Presentation by Chris West, Director of the Shell Foundation to the FPC, Barclays and City of London Banking on Africa conference.

Please click below for the presentation of Abdirashid Duale(British Somali entrepreneur and CEO, Dahabshiil, one of Africa’s largest money transfer agencies)to The African growth revolution? Mobile banking in a global age conference.

Please click below for a presentation on The Challenges of Replicating and Scaling Up Mobile Banking Services from The African growth revolution? Mobile banking in a global age conference.