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Neoliberalism, mining and Armenia's politics of plunder

The resurgence of fighting with Azerbaijan could hinder progressive mobilisation in Armenia, but recent environmental initiatives reveal the appetite for resistance to the economy of extraction.

23 June, 2015: protesters in Yerevan gather together in protest at electricity tariff rises. (c) Asatur Esayants / RIA Novosti. All rights reserved.22 June marked the one year anniversary of the beginning of the Electric Yerevan movement in Armenia, which led to weeks of protest and street occupation against the electricity fee hikes.

Over the past five years, civil society activism has grown in Armenia. But in the wake of the recent resumption of fighting between Armenia and Azerbaijan in April 2016, street activism appears to be on the wane. The problems and issues that brought people into the streets and squares, including corruption, the absence of rule of law, and the unfettered power and impunity of oligarchs, remain.

The campaign to stop copper mining in Teghut, which is led by the Save Teghut Civic Initiative (STCI), is the largest and longest running anti-mining campaign in the country (2007-present). Civil society resistance against mining began in 2007 and, as I argue in a recently published piece, the movement against mining in Armenia has always been more than just about the environment — it is and has been a movement against the politics of plunder that has become the norm in Armenia’s post-Soviet reality.

Activists who campaign against mining describe it as “theft” (koghopowt) or “plunder” (t'alan) of Armenia’s natural resources. These people assert their right and responsibility, as citizens, to have a voice and play a role in development processes, characterising their activism as a form of self-organisation and an expression of “self-determined” citizenship. Their protests are targeted towards both the international development agencies, which finance mining projects and support the adoption of neoliberal policies, as well as the Armenian government, which they see as acting in complicity, through the adoption of those policies, in legalising the “plunder”.

Neoliberalism and post-socialism

In the former socialist countries of eastern Europe and the Soviet Union, neoliberal policies were introduced in the 1990s with the objective to liberalise, privatise and deregulate the centralised economies and to help them make the transition to a market economy.

Many scholars argue that the development aid and technical assistance to the former socialist countries arrived ideologically packaged and describe how the desirability of the capitalist market was never questioned. Economist and former World Bank senior vice president Joseph Stiglitz has criticised in Globalization and its discontents what he calls the “market fundamentalism” that was embraced by international development agencies in the 1990s, arguing that the policies which were formulated and introduced in the former socialist countries (as well as globally) were based on a “curious blend of ideology and bad economics” and “open, frank discussion was discouraged”.

In the post-Soviet period, it has been very difficult to challenge neoliberal economic policies in these countries, which have been viewed as gospel truths

In the post-Soviet period, it has been very difficult to challenge neoliberal economic policies in these countries, which have been viewed as gospel truths, above reproach and beyond critique. In Armenia, and indeed internationally, international development agencies encourage developing countries to embrace mining as a strategy for economic growth and poverty reduction and support the introduction, and where necessary the reform, of regulatory frameworks to attract foreign direct investment.

Subsequently, beginning in the 1980s, mining began to move from the global north to the global south. Foreign investors, seeking to increase their comparative advantage, were attracted by the less stringent environmental policies and regulatory frameworks in developing countries. While natural resource extraction is not only a feature of neoliberalised economies, neoliberal reforms often facilitate investment in mining.

National treasures

Mining in Armenia began to grow in 2000 when former president Robert Kocharian began privatising the mining sector and introducing neoliberal policies, including a “lenient” taxation system, low regulation, and no quantitative trade restrictions on the conversion of capital, so as to attract foreign direct investment.

By 2005, Armenia was considered to have “the most favourable” investment climate in Central Asia and the Caucasus . Although it is one of the smallest former Soviet republics, both demographically (3.1m people) and geographically (29,400sq km), Armenia has 32 identified metallic mines (gold, copper, iron, molybdenum), of which twenty-five have been granted exploitation licenses and are at different stages of operation. In addition to the 25 metallic mines, there are also 479 non-metallic mines that have been licensed for operation.

Mining is one of the two main sectors of the Armenian economy, accounting for over half the country's exports, but the state has no stake in any of these mines. The state’s sole source of revenue comes from royalty payments. Foreign investors, including American, British, Canadian, Chinese, German, and Russian companies, own the exploitation licenses for 13 of the 25 metallic mines. The remainder are owned by Armenian oligarchs.

Mining trucks at work at the new Teghut Mine in Armenia's northern Lori province. CC SA 3.0 Sara Anjargolian / Wikimedia Commons. Some rights reserved.In 2012, the Armenian government, with “the help of the World Bank and European experts”, upgraded “the legislative framework for the country’s mining sector”, adopting “mining friendly policies”.

Among the recently adopted “mining friendly” policies, three stand out in particular. First, the existing environmental exploitation fee of 1.5% was abolished — companies are now only responsible for paying royalties on the sales of minerals, which are levied at an incremental rate of 0.1% up to a maximum of 0.8% where an operation’s profitability index exceeds 25%.

This means that mining companies are only taxed on the sale of the products, rather than the amount of natural resources extracted, as the royalty payment is calculated based on the total estimated value generated from the sale of metallic minerals mined.

Second, the word “waste” was omitted from Armenia’s Mining Code and replaced with the word “lcakowyt”, which translates into “heaps of rocks”. This change in terminology effectively means that waste created as a result of mining are not taxed because they are not identified as waste.

Activists argue that mining reforms further weaken the state’s capacity to regulate mining activity, decrease any potential benefits from mining and intensify corruption risks

Finally, mining companies have been freed from the responsibility of paying for the future maintenance of the tailing dumps, which are now considered state property. Activists argue that mining reforms further weaken the state’s capacity to regulate mining activity, decrease any potential benefits from mining and intensify corruption risks.

The government defends the adoption of these policies arguing that they are necessary if the country is to continue attracting foreign direct investment; mining companies justify the privileges accorded to their sector by arguing that they bring much needed jobs to the country, and invest in infrastructure development and socially responsible projects.

Although Armenia’s government continues to claim that mining leads to poverty reduction and economic growth, the evidence demonstrates the contrary in that high levels of poverty and inequality persist. According to official statistics, over 35% of Armenians live under the poverty line (i.e., live on less than $3/day) and the unemployment rate is 7%.

Armenia is not unique in this regard. Similar mining-friendly policies have been introduced in other developing countries. What is different here is that the adoption of these policies in Armenia is not only about embracing a growth-oriented model of development, but also about demonstrating a commitment to reforming and steadfastly moving beyond the country’s socialist past.

Resistance against the politics of plunder

In Armenia, as in much of the former socialist countries, the struggles against neoliberalism and for real democracy are relatively new.

While these movements’ tactics, strategies and repertories of action (such as the use of social media), as well as their discourses, are partly shaped by current global practices and trends, they are also influenced by the legacy of socialism and the politics of the post-socialist transition.

Thus, on the surface, protest groups in the former socialist countries may appear to share similarities with movements beyond the region, there are also key differences.

For example, several occupy movements emerged in the post-socialist countries in 2012, including Occupy Mashtots Park in Armenia, Occupy Abai in Russia, and Occupy Sloveni. These movements challenged the lack of democracy and growing corruption and oligarchic rule in their respective countries. But unlike their North American or west European occupy counterparts, these movements also shied away from embracing an overtly left critique or vocal anti-capitalist stance.

This reluctance is partly due to the toxic legacy of state socialism, which still makes it very difficult for activists to formulate a left discourse or critique of capitalism.

Two decades after the collapse of the Soviet Union, civil society activists in Armenia have begun to question the status quo — including the dominant narratives of neoliberal development

Although activists in Armenia did not stop the opening of the Teghut Mine, which officially opened in December 2014, their campaign should not be seen as a failure. The Save Teghut Civic Initiative, as the first civic initiative to emerge in Armenia, has played an instrumental role in introducing more contentious forms of collective action and challenging the accepted non-confrontational, consensus-driven practices of civil society advocacy and campaigning.

Since 2010, the more contentious practices that were first introduced by Save Teghut have been taken up with greater success by other civic initiatives on non-mining issues. It is clear that the struggle against mining, which involves challenging the interests of powerful actors (such as international development agencies, mining corporations and oligarchs) and projects where billions of dollars are at stake, cannot solely be won through small, urban-based civic initiatives.

As social movement scholars have demonstrated, while protest groups and social movements can have an impact at the policy level, such impact usually comes about as a result of shifts in public opinion, the forging of vertical and horizontal alliances (including with political parties), and in identifying and taking advantage of political windows of opportunity.

Discussing activism in Armenia, including the Save Teghut initiative, Gohar Saroyan argued recently on openDemocracy that there is conflict between “social” and “political” protests and maintains that “without politicising the problem[s]”, little will be achieved.

In my research I also found a tendency among some activists to separate the political from the social and to emphasise that they were not interested in politics or involved with any political party. Admittedly, there is no agreed upon definition of “politics”. But, drawing on Foucault, I understand politics as conflict, negotiation, and the flows of power that produce ideas (or truth regimes), which, in turn, are challenged and resisted. For Foucault, power is “everywhere” and “comes from everywhere”; it is not solely confined to the state or political parties.

Two decades after the collapse of the Soviet Union, civil society activists in Armenia have begun to question the status quo — including the dominant narratives of neoliberal development.

But given the current heightened period of security in the country, and what some activists described to me as the growing tendency towards self-censorship and self-surveillance among some civil society groups, the space and tolerance for a progressive politics that is centred on democracy, rights and social justice is shrinking.

What chances for social mobilisation in Armenia? Find out more about activism and movement building in Armenia here

About the author

Armine Ishkanian is Associate Professor at the London School of Economics. She has expertise in civil society, democratisation, gender, and development in the post-socialist countries of the former Soviet Union and Eastern Europe.

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