MEMORY STICK REVOLUTION IN YEREVAN

Yerevan residents are used to seeing protests. When local people led by Shant Arutyunyan started protesting against Armenia's entry into the Customs Union, journalists said: the opposition's manifestations in the capital have grown into street fighting. 

Quite recently, IT workers started protesting. They themselves termed their protests as a memory stick revolution. Their protests proceeded peacefully, without any Molotov's cocktails, smoke bombs or self-made infernal machines. All there was were a few air balloons that descended on the scene for the occasion. Nor were there any radical slogans to be heard: they protested against the obligatory introduction of the defined contribution pension system. As was to be expected, their protest did not bear any fruit in today's Armenia. Nobody from the influential persons from the government building came out to meet them. While they managed to hand over a letter [listing their demands], government officials who were interviewed by Yerevan journalists made it clear that it was unlikely that anybody would read that letter. 

Given the administrative arbitrariness reigning in Armenia, coupled with the dictatorship of hooligans, it was to be expected that the memory stick revolution would end in this. This would hardly be worth reporting at all, except for one aspect. IT workers took to the streets in Yerevan despite the fact that the Armenian government had declared the IT sphere a priority for the country's economic development, saying that the sector was an "economic locomotive" for Armenia. On the face of it, it all looked extremely attractive. Armenia, which is experiencing a blockade, needs to find ways for successful development (nobody in Yerevan is happy to speak openly about the notorious blockade which is the logical and direct result of Armenia's aggressive policy), and the IT sphere is what is needed. First of all, it is promising; second, it is intelligent and third, back in the Soviet times instrument engineering developed successfully in Armenia. 

However, it soon transpired that Armenia is in no position to make a breakthrough in the global IT market. California's Silicon Valley has long been developing computer chips. They also design programmes. Computers are assembled in south-eastern Asia... In short, the global IT market has no room for Armenia. When in 2011, international experts noted successful development of the IT industry in Azerbaijan, Armenia was not included in their rating at all. Nobody was surprised by such results. 

One can certainly argue that Armenia has just started developing its IT sphere. However, if IT workers in Yerevan take to the streets with social slogans this means that there is no money even for priority directions.

And as though through some tough irony of fate, the memory stick revolution in Yerevan took place soon after the media started talking about the demise of perhaps the greatest hope for Armenia - jewellery. 

With booming IT technologies Armenia was looking to become the second Singapore, which would turn it into the financial centre of the entire region which would develop technologies. They also pinned great hopes on diamonds cutting in Armenia. The expectations here too were extremely high. Armenian diaspora have strong positions in the jewellery business. Diamonds can be transported in suitcases, something that reduces transportation costs to a minimum. New diamond enterprises were opening in Armenia and the Union of Armenian Jewellers gathered in Basel in Switzerland.  

Moreover, there was a jewellery exhibition in Yerevan called Yerevan Show - part of the Armenian government's jewellery strategy. The event started in a rather lavish manner. The media reported that participants from over hundreds of companies from 20 countries participated. Armenian President Serzh Sargsyan visited the exhibition together with his wife. However, the show ended and the Yerevan media were left with sad results: the expected rain of gold did not fall. Global jewellery brands and potential investors did not rush to the Armenian market. 

It is now no secret for anybody that the much-hyped diamond sector met the same fate as all others in Armenia. Experts say that this happened due to the fact that one factor was overlooked. While there are indeed recognized diamond-cutters among ethnic Armenians living abroad, legal diamond business is overshadowed by far more powerful and wide-spanning illegal business. This includes smuggling of gold and precious stones - first of all, of diamonds, to the most unexpected addresses. When diamond business started developing in Armenia, the criminal component took over. First of all, in the impoverished and unstable country where a few terrorists could publicly open fire at parliament members point blank, it was difficult to wind up a big diamond business. Second, Armenia was governed by the Karabakh clan which accumulated its initial capital under an unrecognized regime which can be called separatist at best or occupation regime at worst. The Karabakh clan, which did not have any legal means or contacts, successfully developed illegal contacts. 

Currently, even Armenian sources have to admit that the majority of Armenian jewellery enterprises existed only on paper, that is, what really happened was that they laundered dubious stones, rather than cut diamonds. Lastly, Armenia's links in the black international of international terrorism also played a part in this. After the 9/11 terrorist acts, rules were significantly toughened in the financial world to ensure more reliable tracking of financial flows to terrorist organizations. These organizations began to transfer their financial assets into diamonds which occupy little room, and are not tracked by metallic detectors. Experts say that many promising investors left Armenia because tycoons of Armenian jewellery business were involved in diamond smuggling. After this, the diamond business finally receded in the shadows. The offshore scandal which has been discussed by the Armenian media for a few weeks already has become the most impressive achievement of the Armenian jewellery. In summer it was reported that Yerevan businessman, Ashot Sukiasyan appropriated funds of the owner of the Hayastan department store, Paylak Ayrapetyan, through an offshore company in Cyprus which was founded by Prime Minister Tigran Sargsyan and the head of the Ararat eparchy of the Armenian Apostolic Church, Archbishop Navasard Kchoyan. Ayrapetyan said that as a participant of the programme of the development of the diamond industry in Armenia in 2009, he took part in a session with the prime minister in which Navasard Kchoyan, businessman Ashot Sukiasyan and 20 diamond entrepreneurs took part. Sargsyan initially spoke about raw diamond supplies from Russia by way of credit and then unexpectedly turned the floor over to Sukiasyan. The latter said that "in Sierra Leone, he has gold and diamond mines and that he is prepared to supply high quality raw materials which will cost 15 per cent less than the price offered by Russia."

This opened up very attractive opportunities - but the whole affair required investments worth 12 million dollars to purchase necessary equipment. Ayrapetyan pawned his property under credit for these investments which then resulted into a cunning machination as a result of which his property went to the Cypriot company. Tigran Sargsyan now claims that he does not have any offshore company and Sukiasyan says that Sargsyan's and Kchoyan's signatures have now been sent for inspection. It is unlikely that the VIP corrupt officials will be brought to account and the prospects for the Armenian jewellery sector, which has now turned into a criminal business, are grim. 

The post-Soviet Armenian economy, which has gone through a certain developmental disease or, as they say in Yerevan, is suffering from a blockade, is currently in a deplorable state. The crisis encompassed all spheres that were declared as priorities in Armenia and with which great hopes were linked. This means that the local economy has practically no hopes left for a change for the better. Therefore, it is no wonder that the country is currently going through a so-called "suitcase referendum" as, according to local statistics, one resident permanently leaves Armenia every 20 minutes.