Electric Yerevan had been preceded by previous smaller movements against price hikes on
marshrutkas public transportation and a new mandatory pension savings system. Garegin Bagramyan, the Armenian Public Services Regulatory Commission chairman also stated, "The main reason for this decision is the fluctuation in the currency exchange rates."
Armenian-Russian relations During the post-Soviet era, relations between Armenia and Russia have been cooperative. Many post-Soviet states struggle with weak political party development, a high degree of fragmentation, and an anemic civil society. Post-Soviet countries lack genuine civic participation. Ideological restrictions and public sector dominance during the Soviet period enforced citizens to be passive and expect authorities to hold the responsibility for community welfare. In the post-soviet era, two new social classes have emerged. There is a new middle class with non-manual employees at its core and a lower class with chronic unemployment and economic inactivity at its core. 43% of the population lives below the poverty line, and the unemployment rate stands at 30%, stimulating the emigration of large numbers of the Armenian population, despite an 8% growth in gross domestic product. Armenia has a high level of dependency on foreign aid from the diaspora, contributing up to 20% of the GDP in 2006—to support both economic and human development within the country. In Armenia nominal democratic institutions do exist, but in reality an oligarchical system of political power has taken shape. This creates tension within the country that weakens the legitimacy of the government. Confrontation with the authorities often take a radical form, with mass meetings being quite frequent. According to the International Corruption Perception Index, Armenia is ranked 94th in public sector corruption. Faced with an imperative need to modernize, Armenia considered the EU’s enhanced offer under the
Eastern Partnership with great interest. However, in the Fall of 2013, Armenia joined the Customs Union of Belarus, Kazakhstan and Russia. Armenia was also in negotiations with the European Union to allow the country to participate in a Deep and Comprehensive Free Trade Agreement. The
European Union wanted close relations with former Soviet republics on Russia's borders. At the EU–Russia summit held in Khabarovsk in 2009, Russian President Dmitri Medvedev warned that Russia did not want the Eastern Partnership to turn into partnership against Russia. Due to being Russia's only ally in the region, Russia invests, trades and lends with Armenia. Russia also holds two military basis within Armenia and Armenia also joined the
Collective Security Treaty Organization's Rapid Reaction Force to come to the defense of its members. In 2015 the relations between the two countries turned sour, which stems from Armenia becoming outspoken about Russia due to its increased arm sales to Azerbaijan during the ongoing
Nagorno-Karabakh conflict. Also despite joining Russia's
Eurasian Economic Union in January 2015, Armenia's economy has stalled and declined. For example during the first half of 2015, Armenia’s exports to Russia declined by 35% compared with the same period in 2014. Financial transfers from Russia have declined sharply. In August 2015 private remittances from Russia to Armenia underwent a 49% decline by comparison with the same period in 2014, falling from $147.8 to $71.3 million - a trend continued into 2016. The reduction of remittance linked income to Armenia's population has negatively impacted the nations economy by resulting in a decline in retail trade. Russia's economic trouble is a result of
international sanctions imposed because of Moscow's annexations of Crimea and involvement in Ukraine.
Post-Soviet era electricity privatization Inter RAO is a parastatal company where the Russian government owns 52.68 percent of the company's shares.
Inter RAO uses a parallel integrated grid which synchronizes the electric generators across the Caucasus and Central Asia. The connectivity of the grid provides coordination between the electric generators and allows shortfalls in one area to be made up with surpluses from another. While the grid increases the quality and reliability of electricity, it does raise security concerns to nations. Electric Networks of Armenia (ENA) holds an exclusive license to distribute electricity in Armenia, doing so at tariffs approved by Armenia’s Public Services Regulatory Commission. An audit of the company’s 2013 finances showed losses of about $94 million, putting the company on the brink of bankruptcy. Concurrently, a 2013
World Bank report stated that the power sector in Armenia was under financed and that even raising tariffs would not cover increasing costs. On the other side, different media, international organizations and reports by RAO UES itself had mentioned corruption and mismanagement within ENA. In this regard, it has been pointed out that the latest hike could be afforded by the middle class but the underlying reasons for protest actually stemmed from a sense of mistrust in the government due to the perceived corruption and mismanagement. ==Protests==