Academic journal article Demokratizatsiya

Economic Reform and War: Interview with Hrand Bagratyan

Academic journal article Demokratizatsiya

Economic Reform and War: Interview with Hrand Bagratyan

Article excerpt

Former Armenian Prime Minister Hrand Bagratyan discusses his tenure in office and his leadership in the transformation of Armenia's economy from the Soviet centrally planned command structure to a free market system, the difficulties encountered, and the models that were considered. He focuses on the mechanisms adopted compared to other Commonwealth of Independent States countries. He also discusses what he would have done differently in hindsight.

Demokratizatsiya: You became prime minister of independent Armenia in 1993 when the world had still not recovered from the collapse of the USSR, when the Republic of Armenia was still a child, and you yourself were a very young man. Why were you selected? What had prepared you for such a huge responsibility? Did you know what you were doing?

Bagratyan: One of the peculiarities of post-Soviet Armenia was the presence of an explicit political leadership, the Armenian National Movement. I was one of that organization's active members, heading its economic team beginning in 1989. In 1990, when the movement won the National Assembly elections, I was appointed minister of economics and deputy prime minister.

My main responsibility was formulating economic reforms and ensuring their implementation. Within a month of the new government's formation, the parliament adopted basic laws on property and agrarian reform, and then after some months the process of land privatization was launched. I headed those projects. It was natural that during that period political thought had become polarized between the reforms' opponents and supporters. Yet in the autumn of 1991, following the resignation of the then prime minister, I was appointed acting prime minister. In February 1993, when Levon Ter-Petrossian, the president of Armenia, raised the question of reshuffling the government, my name appeared as a candidate for the premiership. At the end in February 1993, I was appointed prime minister and had a second opportunity to head the government of the Republic of Armenia.

It should be noted that for the leading political forces and the president, this was not just an issue of appointing a prime minister. This was a question of the country's direction. To place this question in its proper setting, let us recall the political and economic situation of the post-Soviet space in 1993. The majority of the people were disappointed with the advocates of market economy due to the huge decline of the economy, the fall in the standard of living, and the idleness of big factories. Nostalgic Communist and nationalist political forces "had raised their heads" everywhere. Old Communist leaders had returned to power in neighboring Georgia and Azerbaijan. In Russia, Yeltsin barely succeeded in staying in power through the use of extreme methods, such as the assault on the White House in Moscow, the dismissal of reformists (Yegor) Gaidar and (Anatoly) Chubais from the government, and reliance on forces carried away with Soviet populism. Political nostalgia became dominant in Ukraine. Belarus had already been turned into a totalitarian regime. The same was true of Central Asia. The exceptions were Armenia, Moldova, and, to some extent, Kyrgyzstan. Under these conditions, the appointment in Armenia to prime minister of a liberal economic reforms advocate was, of course, not only a domestic, but also a regional challenge.

The issue was not only the appointment. My government immediately undertook significantly extending liberal economic policies and launching general changes. Following seventy years of the Soviet Communist totalitarian regime, the transition to the market economy was the same as crossing a stormy river without the benefit of a bridge. It was difficult to feel envy toward those people taking further steps, knowing that each successive step could be the last, leading to drowning. More unenviable was the status of those deciding to turn back after having already passed the halfway mark. …

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