The current and continuing demonstrations in Armenia over price hikes by the state electricity company contain many lessons for us and Russia. First, they highlight the continuing economic and political pathologies of the neo-Soviet or Putinist experiment where the state retains the controlling interest in the economy. Under these autocratic conditions state ownership remains a license to steal and rule by massive corruption. At the same time the population is kept in a state of economic illiteracy, believing that electric power and other goods and services are to be paid for by someone else and that it is natural for the state to provide these goods and services. In economic terms at least, we see a similar phenomenon in Greece. The inevitable result of this situation is bankruptcy, failure to provide the good or service in question, riots and the ensuing spillover of those demonstrations into the political system since economics in these systems is, pace Lenin “concentrated politics.” Armenia’s government clearly is under siege in this crisis and has already had to take money away form security to compensate for the loss of revenue it will incur when it bowed to demonstrators’ demands and rescinded the price hikes in electricity. These events validate Margaret Thatcher’s observation that “the problem with socialism is that eventually you run out of other people’s money.” That is now happening in Armenia and the Armenian political system cannot escape the consequences thereof. And if it continues to avoid reform, there will be more such riots there and in other, similarly governed post-Soviet states, including Russia.
Thus the second lesson is that all of these autocracies, to call them by their true name, are inherently unstable, misgoverned polities that incline towards or are full-blown kleptocracies. In many if not all cases their leaders know they are sitting atop an unstable structure but will not change it lest their power and wealth and those of their retainers be endangered. The ensuing stasis only stores up more fuel for the numerous inevitable revolts, revolutions, and upheavals when these systems cannot govern themselves in the old way any longer.
Third, since these paragons of misrule are to a greater or lesser degree dependent upon and modeled after Putin’s system, in the final analysis Russia has to bail them out when they get into trouble as they inevitably will. Or else Russia has to step in with a decisive reply of either force majeure or a replacement of one racketeer by another. Moreover, apart from crises brought on by misrule as in Armenia, all these states are subject to succession crises. In all these states succession is both an inevitable problem and the Achilles heel of the system since no successor can be named without provoking a major purge. Furthermore nobody dare aspire too openly to that role and nobody appears willing to entertain serious reforms in advance of gaining power or after consolidating it. So when the time comes for a succession, either due to the mortality of the leader or to violent, unforeseen upheavals, Russia is implicated and must bear substantial material and political costs to keep these systems afloat.
In some earlier cases Moscow could bring about order, as in Georgia after 2003, by working with the new leader who came up on his own, i. e Mikhail Saakashvili, or negotiating a settlement that preserved some order. But progressively, as in Kyrgyzstan 2010, and now Ukraine, Moscow has had to resort to more open and coercive forms of intervention such as sponsoring a coup in Kyrgyzstan or by launching a war in Ukraine. The point here is that the costs of empire for Russia are multiplying and the gains shrinking, with Crimea and the Donbass being paradigmatic examples. But even in Armenia, Russia is now sending the government $200 million and this is not likely to be the end of such subsidies. In addition, competent economists have observed that the Eurasian Union, Moscow’s showcase economic project for restoration of its hegemony over the CIS, actually entails the long-term subsidization of the poorest members of the Union, among them Armenia. Thus the costs of empire are becoming progressively greater and more unbearable for Russia. In turn that factor, added to the growing inability to subsidize rebellious provinces like the North Caucasus, add to the growing likelihood of an upheaval in Russia itself.
Consequently the Armenian demonstrations highlight the fundamental fact that this area remains inherently unstable. This instability arises as a result of both the internal governance of CIS countries and because of the parallel and ensuing failure of Russia or these governments to deal adequately with security challenges ranging from ethnic rivalries to territorial disputes, conflicts over water, and the threat of Islamic terrorism, if not invasion from Afghanistan by terrorists. Russia may want to police this area but it cannot afford to do so. Its population clearly will not pay for the costs of such genuine imperial policing, and in any case, as Central Asia shows, Russia cannot afford to do so and others like China are duly stepping into the vacuum created by the retreat of Russian power.
Nevertheless, to add to the crisis, voices in Moscow, blinded by their own propaganda and self-serving blame of the West for everything, are demanding that force be used to put down what they believe is another Western conspiracy. They made the same demand in the Ukraine crisis of 2013 and the resulting burdens to Russia by any rational or objective standard outweigh the emotional gain of Crimea. Thus the crisis in Armenia brings home to us the fact that the CIS is a fundamentally unstable area prone to upheavals at regular intervals and that Russia’s hegemonic aspirations ultimately are unsustainable as well as a major cause of this instability. If major corrective steps are not taken in time this house of cards will inevitably fall apart possibly sooner rather than later, and not only in Armenia.