Armenia's ruling Republican Party nominated former Yerevan mayor Karen Karapetyan as the country's next prime minister at a meeting on September 8, Panarmenian reported, citing the party's deputy chairman Armen Ashotyan. The nomination to fill the vacancy created by the resignation of Prime Minister Hovik Abrahamyan still needs to be approved by parliament.

Abrahamyan's resignation is yet another attempt by President Serzh Sargsyan to appease the growing discontent with his administration, following week-long protests in July, by deflecting attention from his office to other state institutions. Armenians' grievances against the government range from slow and unequal economic growth, high unemployment, poverty, corruption and its handling of the conflict with neighbouring Azerbaijan over the disputed Nagorno-Karabakh region.

Sargsyan has been in power since April 2008, and the Republican Party since 1999. A referendum in December enshrined the ruling party's grip on political power, and it is expected to win the parliamentary elections in 2017.

Popular discontent with the government has mainly been channeled towards Sargsyan himself, with Abrahamyan just being a convenient scapegoat.

"Abrahamyan's personal and political allegiance has always been much closer to former President Robert Kocharian than to [the] incumbent," Richard Giragosian, Director of Yerevan-based Regional Studies Centre, explained to bne IntelliNews in an email. "Given the economic downturn, the failure to combat corruption and the need to respond to a mounting degree of popular discontent and dissent, as demonstrated by the July hostage standoff incident, the political expediency of blaming Abrahamyan was too attractive to resist," he added.

In his resignation speech, Abrahamyan said that the country needed “a new approach, a new start”, with a new government leader. But Giragosian is sceptical about the potential for real change that a government reshuffle will bring, pointing instead to the need for the government to project an image of stability and confidence.

Whoever comes after Abrahamyan will have to navigate a difficult political situation following the July protests and ahead of parliamentary elections in April. The legacy of entrenched corruption and the economic downturn, together with the sharply polarised public opinion and the deeply rooted public mistrust of government, pose even greater challenges for the new premier.

Abrahamyan’s successor "will be essential for the ruling Republican Party’s capacity to dominate the elections, largely through the use (or abuse) of the advantages of incumbency, or a reliance on so-called “administrative resources” of leveraging the government’s extensive perks of political patronage and by pressuring civil servants and state workers to vote for the ruling party", Giragosian believes.

Karapetyan, both an insider and an outsider

Abrahamyam's likely successor, Karen Karapetyan, is a political insider, who spent a lot of time outside of Armenia. While he is largely respected inside Armenia, he has lived mainly in Russia in the last six years, where his brother Samvel runs a billion-dollar real estate holding called Tashir Group and where he has been serving as deputy CEO of Gazprom subsidiary Mezhregiongaz since 2012.

Previously, Karapetyan served as the CEO of Gazprom's Armenian subsidiary for a decade and, between 2010 and 2011, as the mayor of Armenia's capital city of Yerevan. He was forced to resign from the latter post over widespread protests prompted by the municipality's decision to ban street trading.

Given the mistrust in the political establishment at the moment, the fact that Karapetyan is somewhat removed could play to his advantage. Nevertheless, his associations with Russia - and implicitly the Kremlin - might prove problematic at the moment, Giragosian explains, as dissatisfaction with Armenia's largest partner is growing amidst accusations that the Kremlin has supplied Yerevan's enemy Azerbaijan with arms that the latter used against Armenia in April.

"Moreover, Karapetyan also has a political track record that suggests his earlier weakness in standing up to or challenging the country’s infamous oligarchs.  This is also the reason behind his surprising decision to step down as the mayor of Yerevan in 2011, citing “personal reasons,” after holding the post for less than one year and returning to Moscow," Giragosian explains.

On the flipside, Karapetyan's decade-long career at the helm of Gazprom's Armenian branch and later at Gazprom subsidiary Mezhregiongaz is a point in his favour, as he is one of the few members of the Armenian political elites to have risen through the ranks of a foreign company.

"Despite some sense of optimism over his appointment, the return of Karapetyan as the country’s new prime minister should not be seen as a significant success for reform or democracy," Giragosian concludes, adding that the move may be yet another ‘missed opportunity’ for real reform and sincere change in Armenia.