For a society that has become conditioned to perpetual economic difficulties, to put it mildly, the specter of financial and monetary concerns has haunted the socio-economic psyche of the Armenian citizen. Accustomed to a climate of economic deprivation, much of Armenian society had come to accept a new normal: living in continuous survival mode. This economic reality, needless to say, became crystallized as the dominant political issue for the Armenian citizen. That the Velvet Revolution brought about a new era of hope and optimism did, to some extent, alter the collective trauma induced by economic stagnation. Indeed, the Velvet Revolution ushered in its own new normal: confidence in the country’s economic future. This optimism, however, is not economic; it is purely political. It is confidence in the post-Velvet Revolution government of Prime Minister Pashinyan. A recent prominent poll by the Washington-based and USAID-funded International Republican Institute (IRI) primarily reifies this point: while the Armenian citizen continues to have important economic concerns, they are mitigated by the citizens’ trust and confidence in the Government.

The Direction of the Country and Economics

Over the past several years, issues that impacted Armenians’ personal pocketbooks have triggered widespread protests on several occasions. In 2011, a ban on street vending lit the spark for protests that snowballed to include more general anti-government grievances. In 2013, a proposed public transportation fare increase led to widespread disobedience, where passengers would refuse to pay the new, higher fares (which were eventually reversed). In 2014, changes to the pension system and then-President Sargsyan’s announcement that Armenia would join the Eurasian Economic Union caused two separate rounds of protests. The most memorable of these precursors to the Velvet Revolution, however, was the Electric Yerevan movement in 2015, which ultimately led to the sale of Armenia’s electricity distribution company by its Russian corporate owner, after a proposed 17% price hike.

In post-Velvet Revolution Armenia, such economic concerns have not subsided, as the IRI poll clearly confirms. The poll, published on December 9, was conducted in September and October 2019, before the Parliament finalized a 23.6% increase to the minimum wage, from 55,000 AMD/month to 68,000 AMD/month. The new rate[1] is effective January 1, 2020, coinciding with the adoption of the new flat income tax regime. It will impact 57,000 public sector workers and 130,000 private sector workers. Such economic indicators, however, remain limited in explaining the overall euphoria that has sustained itself after the Velvet Revolution, along with the Pashinyan Government’s unprecedented ability to remain extraordinarily popular.

In comparison to the prior IRI survey conducted in May 2019, the October poll shows 62% of Armenian society holds the view that the country is heading in the right direction, while the previous survey showed 60%. The 2% increase is not as important as the continuous optimism of society: time is not taking a toll on the citizens’ positive trajectory for the country. Compared to the high euphoria of 2018, where 73% viewed the country as heading in the right direction, a mere 9% decrease, over a time span of a year and a half, is quite telling of the relative shift in Armenia’s political culture. Armenia is no longer a pessimistic society. This premise is further supplemented by the response to the following question: How would you evaluate the prevailing mood of the Armenian population? Collectively, 70% displayed optimism that the future will be “better;” this is a minor increase from 69% in the May 2019 survey.

This collective optimism, as noted, is not driven by economic indicators but by political indicators. When addressing the question on the “biggest success” of the Pashinyan government, the top three responses were: 1) decreased corruption; 2) improved psychological state of the people; and 3) advancement of democracy. Similarly, when asked what the “biggest failures” of the government were, the top three responses were: 1) bad management; 2) unfulfilled promises; and 3) perceptions of political instability. Economic concerns ranked fourth behind these indicators. The underlying assumption is that, even when gauging the perceived “failures” of the new government, Armenian society is not ready to blame them for their economic concerns. The Prime Minister’s political popularity is quite easily subduing, at this stage, any serious backlash on economic matters.

Prospectively, however, the expectations of citizens are heavily indicating potential economic accountability. The poll asked Armenian residents what they thought the government “must achieve in the next six months,” and the top three responses were unequivocally economic: 1) create jobs; 2) solve socio-economic problems, and 3) increase wages. Even the fourth response was socio-economic: increasing pensions. These expectations are also uniquely qualified in the survey by the perceived patience of citizens. When addressing the question “should economic reforms be undertaken quickly or more gradually,” 75% of respondents voiced the need for much quicker implementation of reforms. Compared to May 2019, where the affirmative response was 63%, a 12% discrepancy is noticeable: citizens are becoming observably more impatient with time and the demand for quicker implementation of reforms is increasing.

There does appear to be, however, a fascinating disconnect between the general optimism of citizens and their personal economic situation. When responding to the question concerning Armenia’s economic situation over the last six months, 50% of respondents noted improvement, with 36% not seeing any changes, and 13% saying that things have actually gotten worse. In the May 2019 survey, 42% noted improvement, 35% stagnation, and 18% argued things were actually worse. In this context, the positive trajectory has increased by 8%; perceptions of stagnation have primarily stayed the same; while perceptions of things being worse has actually dropped by 5%. Collectively, a majority of Armenians view the economic situation in the country to be improving, with only a marginal amount arguing decline.

These relatively positive outputs, however, are interestingly disconnected when the economic questions are answered on a micro, personal basis. When asked about the financial situation of one’s household over the last six months, the overall numbers indicate more of a stagnation than improvement. While 30% responded that there was improvement in their household, 55% responded that their situation had “stayed the same,” while 15% responded things had worsened. Compared to the May 2019 numbers, slight progress is observable: household improvement is noted at 24%, stagnation at 58%, and worsening at 17%. Collectively, the economic situation in Armenian households, over the last six months, has improved by 6%, while perceptions of stagnation have slightly dropped by 3%. Perceptions of household economic deterioration also declined by 2%. In this context, even a micro-level assessment notes slightly positive responses. However, at the same time, the overall pocketbook concerns of citizens remain front and center. When asked what the “main problems Armenia is currently facing” are, the number one was response was “unemployment/jobs.” When posing the question at the local level (towns or villages), the number one response was the same: “unemployment/jobs.” With respect to the specific problems faced by households, all top three responses were economic hardship: 1) financial problems; 2) housing; and 3) unemployment.

But when comparing citizens’ micro perception of their household to the country’s macroeconomic situation, a disconnect is observable: while people have important economic concerns in their households, they still view the overall economic situation in the country to be consistently improving. This positive perception, perhaps finds support in citizens’ overall economic situation, and not simply in the last month 6 months. When asked how one would “describe the current economic situation” of one’s household, the numbers appear to be quite consistent, even better, than the national outlook. 63% of respondents noted that their current household economic situation was good, while 33% claimed it was bad.