International Engagement and the Contested State in Contemporary Armenia Working Paper: March 2014 Dr David Lewis 1 Western engagement with the states of the former Soviet Union has been characterised by repeated misunderstandings and mutual disappointments. Attempts by external actors to encourage political and economic reform have often failed. Proposals to integrate states such as Armenia and Ukraine into European processes of political and economic development have resulted in sharp reversals, and a new round of East-West tensions. This process of mutual estrangement has many causes, but one important element has been a failure to comprehend fully the nature of the post-Soviet state. External engagement with many of these states has taken place largely on a formal, constitutional basis. Yet the dynamics of distribution of power and resources in post-Soviet societies have become embedded in a different dimension of informal politics, leaving Western policy-makers often grappling to gain traction with what appears to be a kind of ‘virtual’ state. One excellent example of this tendency is demonstrated by contemporary Armenia. This small, post-Soviet state in the southern Caucasus is full of contradictions. With a major diaspora and extensive foreign aid, it appears to be extremely open to all types of international cooperation. But external partners complain about the difficulties of effectively implementing assistance programmes; successful foreign investors are rare. The state has regularly outranked regional rivals in league tables of economic reform, but business is still dominated by ‘oligarchs’, who maintain economic monopolies in the most lucrative business sectors. The state is often portrayed as ‘weak’, apparently lacking the required capacity to implement reforms effectively or to tackle endemic corruption (Zürcher 2007). But in other ways the state appears ‘strong’, having consolidated its military occupation of Azerbaijani 1 Dr David Lewis, Senior Lecturer in Politics, Department of Politics, University of Exeter. Email: d.lewis@exeter.ac.uk