PM SARGSIAN'S REPUBLICANS STRENGTHEN HOLD ON POWER

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000642

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/15/2017
TAGS: PGOV PHUM ASEC KDEM AM
SUBJECT: PM SARGSIAN'S REPUBLICANS STRENGTHEN HOLD ON POWER
AS POST-ELECTION LANDSCAPE TAKES SHAPE


YEREVAN 00000642 001.2 OF 002


Classified By: CDA A.F.Godfrey for reasons 1.4 (b,d)


1. (C) Armenia's ruling Republican Party, led by PM Serzh
Sargsian, is set to have a slim majority in the new National
Assembly to be seated May 31. Results will not be made
official until May 19, but it seems clear that the
Republicans will take 68 out of 131 seats of the new
parliament. Running a distant second and picking up 26 seats
was its pro-government rival Prosperous Armenia. The
ARF-Dashnaktsutiun (Dashnaks) will have 16 seats and two
opposition parties and independents will share the remaining
21 seats. Despite the Republican majority, Sargsian will
probably seek a coalition partner, but it is not yet clear
whether the bruises from the local-level competition will
have healed in time for him to choose Prosperous Armenia over
the Dashnaks. Among all the candidates, Sargsian was the one
most capable of carrying forward the current negotiating
track on Nagorno-Karabakh. We do not anticipate any major
policy changes from Armenia once the new parliament, prime
minister, and cabinet take office, by the end of June. End
Summary.

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REPUBLICANS BEST UPSTART PROSPEROUS ARMENIA
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2. (U) According to Armenia's constitution, 90 MPs are
elected according to party list voting and 41 are elected in
single-mandate districts. Preliminary results give 34
percent of the party-list contest vote to the ruling
Republican Party of Armenia, 15 percent to Prosperous
Armenia, 13 percent to the Dashnaks, 7 percent to opposition
Orinats Yerkir and a 6 percent to the surging Heritage
Party. The remaining 28 percent (representing votes cast for
parties that failed to reach the 5 percent minimum threshold)
will be allocated proportionally among the five parliamentary
parties. The Republicans fared even better in the 41
single-mandate races, picking up 27 seats.


3. (C) Pending final validation and certification of the
preliminary results, as of now the Republicans will have
enough seats to control the National Assembly all on their
own, without requiring the help of any other party. They may
choose to do so, although we suspect they will prefer to
bring at least one other party into government with them,
most likely Prosperous Armenia. The Dashnak party is another
party that could easily join the government, in lieu of or in
addition to PA. The Republicans and Dashnaks have a
comfortable modus vivendi that could easily be renewed.
Whether formally in the government or not, we expect the
Dashnaks to find considerable common cause with the
government, winning government concessions on key Dashnak
priorities in exchange for supporting the government on most
other things.

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PROSPEROUS ARMENIA FINISHES WITH A WHIMPER
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4. (C) After bursting onto the political scene with great
fanfare and much public acclaim, the oligarch-led Prosperous
Armenia (PA) party seems not to have been able to go the
distance. Over the last two months, the dominant Republican
Party campaign came on strong, outshining the PA effort,
which had been the most glittery effort previously seen. The
Republicans also seem to have pulled every lever, fair and
foul, among the powers of incumbency to turn out the votes in
their favor.


5. (C) This race amounted to an unspoken duel between two
pro-governmental forces, the entrenched Republicans backed by
prime minister and presidential heir apparent Serzh Sargsian,
and the upstart Prosperous Armenia, backed (discreetly, from
a distance) by President Robert Kocharian, who must step down
in 2008 according to the constitution. The rank-and-file
hierarchies of the two parties have scrapped fiercely with
each other right up to and through election day, with a
number of reported incidents of physical confrontations
between the two sides, quickly smoothed over and denied by
both sides.

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HERITAGE COMES ON STRONG IN LATE CAMPAIGNING
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6. (C) Another story from this election was the Heritage
party surge. Former foreign minister (and former AmCit)
Raffi Hovhanissian's Heritage Party, until recently written
off as a non-contender, came on strong in the final weeks of
the campaign. Hovhanissian has long enjoyed high personal

YEREVAN 00000642 002.2 OF 002


popularity ratings in Armenia, but his party's figures have
always languished in low single-digits and the party had
little in the way of organizational infrastructure.
Conventional wisdom was that voters saw the American-born
Hovhanissian as a nice man, who did not have what it takes to
be a player in Armenian politics. Hovhanissian crisscrossed
Armenia during the campaign, with a brightly-painted,
American-style campaign bus, and led television-savvy
campaign stops. His party surged by the end of the campaign,
and he polled very strongly in Yerevan.


7. (C) Hovhanissian has complained that he actually won more
than twice the number of votes officially announced, and
though his estimate is probably high, we suspect that quite a
number of Heritage votes found their way into Republican
Party piles during the night of vote-counting. We saw this
happen quite flagrantly in one polling place, and are
prepared to believe it probably happened elsewhere as well.
Heritage has announced its intention to file court
challenges. This story may unfold further in coming weeks.
Also unclear is how Hovhanissian will use his newly-won
electoral validation. Will he take his seats in parliament
and try to find a way to look statesmanlike and effective at
governance from that weak perch? Or will he choose to join
the more radical opposition axis (led by the Impeachment
Bloc, Republic Party, and New Times Party),and try to build
popular momentum from the streets, with a rejectionist
strategy? He may wait and see how much traction the street
demonstrations get before deciding which way to jump.

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ORINATS YERKIR: LET'S MAKE A DEAL?
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8. (C) Artur Baghdassarian's opposition Orinats Yerkir (Rule
of Law) party will be a wild card factor. Baghdassarian is
certainly mercenary enough to accept -- even pant after --
some kind of deal to return to government, but we have had a
clear signal from President Kocharian that the president
wants nothing more to do with the young former parliament
speaker. Alternatively, Baghdassarian might throw his lot in
with the strident opposition, though we doubt he will embrace
wholeheartedly a radical street protest strategy -- unless it
should seem against all expectation to be really working.
Baghdassarian's naked ambition is to get back into
government. His preferred tactic is a triangulation
strategy; he tries to stake out territory as the "moderate"
or "reasonable" opposition, with measured criticism and
keeping options open. Though this strategy has left him with
a core of public support, it leaves him unliked and
mistrusted by the authorities and the real opposition alike.

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THE RADICAL OPPOSITION TAKES A SHOT
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9. (C) The Impeachment Bloc, together with its allies the
Republic and New Times parties, is still betting on a
strategy to bring people to the streets. We do not expect
this to gain much traction, but are not nearly as dismissive
as we would have been six weeks ago. The Impeachment Bloc
has shown surprising success during the campaign period in
turning out perhaps as many as 10,000 (maybe even a bit more)
to a couple of its largest rallies in the last two weeks of
the campaign. It did so with a clear and simple rallying cry
("Im-peach-ment! Im-peach-ment!") chanted continuously.


10. (C) Impeachment may have more chance of getting some
momentum going if the popular and effective stump campaigner
Raffi Hovhanissian (Heritage Party) throws his weight behind
the movement, and decides to take an active part. However,
this will depend partly on how effective the rallies seem to
become on their own, and equally on whether the leaders can
make a deal that gives Raffi sufficient deference to satisfy
his ego.


11. (C) On May 13, a joint Impeachment/ Republic/New Times
rally kicked off at Freedom Square as scheduled at 5:00pm,
conspicuously failed to generate any spark, in the
lightly-drizzling rain, and broke up before 6:30. Perhaps
realizing it is hard to fire up protesters over election
results that were still trickling out of the election
commissions, the organizers called for a new Freedom Square
rally on Friday evening, May 18. They have since announced a
Freedom Square sit-in, by way of preparation, for the evening
of May 16.
GODFREY