Opinion | Rule of Law or Rule of Power?

Op-ed by Karen Harutyunyan, editor-in-chief

The Armenian government’s decision to pursue the nationalization of the Electricity Networks of Armenia (ENA) is a step in the wrong direction—legally, economically, and strategically. If adopted, this action will not only trigger a costly legal battle but could also inflict lasting damage on Armenia’s investment climate at a time when we can least afford it.

I am not defending any specific investor. I am defending the principle of predictability in economic policy and the credibility of the Republic of Armenia as a host country for investment. The rule of law, regulatory stability, and investor confidence are not abstract ideals—they are the foundation on which economic development is built.

Today, Armenia is already facing several arbitration cases with foreign investors—from disputes over mining to transport infrastructure. These cases are not just expensive in legal terms; they are deeply damaging to the country’s reputation. Arbitration proceedings related to the North–South highway, the Amulsar mine, and the Zangezur Copper-Molybdenum Combine all cast doubt on Armenia’s reliability as a partner. The ENA case threatens to become another chapter in that growing file, with the added complication that it appears to be driven more by political retaliation than public necessity.

The facts are difficult to ignore. Samvel Karapetyan, a major investor and philanthropist, expressed public support for the Armenian Church after Prime Minister Nikol Pashinyan attacked the Catholicos. Within two days, police raided his home, arrested him, and the Prime Minister declared that ENA—his largest asset in Armenia—would be nationalized. Legislation was drafted and rushed to parliament in days. What message does this send to other investors, both domestic and international?

Even if we set aside the optics, the practical reality is just as concerning. The government already struggles to complete large-scale infrastructure projects. The much-needed power transmission lines to Georgia and Iran remain incomplete years after groundbreaking. While the current government frequently refers to energy as a strategic sector, it abolished the separate Ministry of Energy and folded its functions into the Ministry of Territorial Administration and Infrastructure—where the position of deputy minister for energy has remained vacant for nine months.

Under these circumstances, why should anyone believe the state is prepared to take over and manage Armenia’s power grid more effectively than the current operator?

ENA is not a failing utility. Since 2015, it has reduced technical losses to below 10 percent—far better than the losses recorded in our publicly operated water or irrigation networks. The Public Services Regulatory Commission, before its chair was pushed to resign under pressure, had not flagged any critical mismanagement at ENA. Yet we are now rewriting laws to justify its expropriation.

This is not how a serious country behaves. This is not how a rule-of-law state acts. And this is certainly not how a small, landlocked country that depends on attracting outside investment should treat one of its largest infrastructure operators.

I understand the public’s frustration with outages and service quality. But there are regulatory tools to address those problems—performance audits, penalties, tariff adjustments—not confiscation. Nationalization should always be a last resort, not the first.

If this policy proceeds, Armenia will pay for it—in arbitration fees, in lost investor interest, in weakened partnerships, and in squandered credibility. The government should step back from this dangerous path and reaffirm Armenia’s commitment to lawful, rational, and forward-looking governance.