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War & peace

14 April 2023

5 min read

After the first war, before the next

Once more border clashes between Armenia and Azerbaijan are occurring. Lika Zakaryan reflects on what happened since the last war ended.

Lika Zakaryan

Lika Zakaryan is a writer and photographer based in the Republic of Artsakh (Karabakh).

A child protestor holds a placard at a demonstration

Artsakh citizens protest against the blockade and its effects.

VoA, Public domain, via Wikimedia Commons.

More than two years ago the war between Armenia and Azerbaijan for Nagorno-Karabakh/Artsakh ended, but many fundamental issues remain. Who will provide security and services for the region’s residents - Armenians? How is humanitarian aid managed and by whom?. And, nobody knows if the so-called “ceasefire” will hold. 

Azerbaijan won the war, with the Armenian side losing significant territory in and around Nagorno-Karabakh. Over one-third of the population became refugees, losing their homes and everything they managed to create during all their lives. Now Azerbaijan controls those territories, but they mainly remain not inhabited. Those territories that remained under the control of Armenians, are still populated only with Armenians, and Azerbaijanis have to approached them. In order to prevent any armed conflict in the region (in fact, to protect Armenians from Azerbaijanis) 4,000 Russian soldiers-peacekeepers and emergency services staff keep an uneasy peace. 

They were already in Artsakh within hours of the peace agreement’s signing. Artsakh is part of Nagorno-Karabakh, an Armenian enclave within Azerbaijan. Since then, peacekeepers have done a lot: escorting villagers to visit graves, mediating disputes, tending crops, and fixing water pipes. They set up checkpoints along the only road connecting Artsakh to Armenia, to ensure a safe corridor for Armenians living in Artsakh.  

Before the war, there were 150 000 Armenians living in Artsakh. After the war, the numbers decreased to 120 000. Some people didn’t come back from Armenia, where they found a shelter, after losing their homes. Some moved to Armenia or Russia because they didn’t want to live in uncertainty. And, unfortunately, wars take lives, and some people lost their lives during that period. But mostly the people of Artsakh remained resilient and wanted to live in their homes or create new ones, even not knowing for how long they will last. 

It is said in Artsakh and Armenia, that every human being now living in Artsakh is a hero. They say that because it’s not easy to sleep every night not knowing if you are going to wake up in the morning tothe sounds of bombs, or if you are going to wake up at all. Because since the end of the war Azerbaijan has done so much to traumatize people physically and mentally.

According to the peace agreement Armenians and Azerbaijanis should remain in the positions they were in at that moment. In other words, after the signing and the cease-fire, they have no right to move forward and occupy new territory. However, after just one month, Azerbaijan entered and captured two Armenian villages, taking more than 60 Armenians as prisoners of war. After that, during those two years, similar military operations were repeated numerous times by Azerbaijan. Again, people were afraid of the sounds of war, they heard and saw military drones, and felts those feelings again.

It was also a manifestation of psychological violence that the Facebook page of the Artsakh National Assembly was hacked, with a flag of Azerbaijan posted as the main picture. The accompanying text read:

“We call on the Armenians living in Karabakh to leave the occupied territories of Azerbaijan within 168 hours, otherwise all Armenian citizens will be killed.”

People had no idea if they should believe that threat or not. Maybe this was just another provocation, but could it really happen? Did they need to evacuate everyone. Or not believe it and stay in their houses? No matter how hard people try to stay strong, no one closed their eyes that night, thinking that it was possible that Azerbaijanis will enter the cities and villages and commit a genocide against the peaceful residents. 

Many violations happened during these last two years. And then since December 12, 2022, Azerbaijan has blockaded the only road connecting Artsakh to Armenia depriving residents of a basic right - a right of freedom of movement. It’s the only road people can travel in and out on, the only road through which the 120 000 people get food, medical and other supplies. It's the only road that connects Artsakh with the outside world. Blockading this road caused a humanitarian disaster. Lack of food, medicine, work, and cash. Nobody can pass along that road.

The blockade was not enough, and Azerbaijan decided to shut off gas and electricity supplies to Artsakh again during the coldest months of winter. People simply do not have the opportunity to warm up. In a sub-zero temperature, people were deprived of the opportunity to turn on a small heater for hours. The little children, unable to stand the cold, fell ill and ended up in the hospital.

The healthcare system in Artsakh is still a little weak. There are hospitals, but people who are in critical condition, between life and death, are mostly transferred to Yerevan, the capital of Armenia, in order to receive proper treatment there. However, due to the blockade, some people could not be evacuated, and died.

Also, a food rationing system was introduced in Artsakh, where people can get food only with a coupon. According to the system, every person gets one kilogram of rice, one kilogram of pasta, one kilogram of sugar and one kilogram of buckwheat in a month. With those coupons, people come to the stores and buy their share.

Food is so scarce that locals have begun to notice that street animals are starving to death because they can't find food in the dumps. The reason is that people have nothing to throw away.

Many families have been divided because one or another family member mistakenly stayed on the other side of the blockade. Many people went to Yerevan to see a doctor and due to the road’s blockade cannot return home. The same impact was felt for those going in the opposite direction. In total, 1,100 people remained in Armenia and did not manage to return to Artsakh.

Artsakh children are deprived of the right to education. Schools and kindergartens are closed for months because there is no way to heat them. Also, they cannot feed children in kindergartens due to the lack of food, and children in schools cannot take food to school, because there is almost no food at home. And sitting for six or seven hours without food is very difficult for children.

Azerbaijanis also regularly cut telephone and Internet wires, and people are deprived of the only opportunity to even connect with the world virtually.

People are trying to overcome all these difficulties, but no one knows when these provocations and torments will end. When they will finally be able to live decently. And the world hasn't even heard of that small area in the far South Caucasus and the resilient people of Artsakh, who are so loyal to their roots and homeland.

Explainer

Comment

Economics

29 October 2024

6 min read

How to tax ethically to avoid a two-tier society

From income tax to property and inheritance taxes, which is fairer?

Laurence Fletcher

Laurence Fletcher is a journalist at the Financial Times.

Sarah Agnew on Unsplash.

Few doubt that Chancellor Rachel Reeves will be putting up taxes when she presents her first Budget on October 30th.

The political narrative of recent months has very much been of an alleged fiscal “black hole” of £22bn - or is it £40bn? - that somehow needs to be filled.

While the size of the shortfall and the identity of those responsible are both hotly disputed, and despite a lack of detail from the Treasury about what it actually consists of, the questions now being asked are not whether taxes will rise but which ones and by how much.

Months of speculation have focused on employer National Insurance, capital gains tax and freezing income tax thresholds as areas that Reeves could look to for the additional revenue.

But beyond the immediate issue of raising enough revenue to make good any shortfall, lies a deeper, trickier question about the way in which taxes should be levied for the good of society. If a government is to force people and companies to hand over their money, then what is the most ethical way to do this? Who should pay and who shouldn’t? How can tax be used to reduce inequality and build a better society?

Answering such questions is, of course, far from straightforward, because there are plenty of other factors in play.

For instance, some taxes are surely levied because they are simpler to collect. Take income tax - an unpopular measure introduced in 1799, then abolished before being reintroduced as a supposed temporary measure. It could certainly be argued that taxing people’s income - their attempt to get on in life and improve their lot in life - is less “fair” than taxing wealth that has been accumulated by someone’s ancestors years ago. Working hard and earning income is often surely a way of breaking down class divisions. But income tax - contributing 28 per cent of UK government tax take in 2023-24, according to The Institute for Fiscal Studies - has the advantage that it is relatively difficult for the average worker at a UK company to avoid it. Ease of levying it is surely a driver.

Equally, some taxes that might seem “fairer” have deliberately not been levied because of the difficulty in collecting them, and/or because to try to do so could be counterproductive.

A wealth tax, for instance, would be “economically damaging”, according to one of the UK’s highest profile tax experts Dan Neidle.

Or take the politically contentious issue of non-doms, a colonial era tax break allowing rich foreigners to avoid UK tax on overseas income. It would be fairer, the argument goes, to tax them on the whole of their income. If they are going to be resident in the UK, then surely they should be taxed like a UK resident whose home is here?

Former Chancellor Jeremy Hunt abolished this regime earlier this year but left a number of concessions that the incoming Labour government pledged to abolish. But non-doms are tax-sensitive and highly mobile, and a number of jurisdictions compete to attract them. Many are entrepreneurs and wealth creators that many countries need. Reports have suggested a clampdown could raise no money or even cost money and could drive people away.

“Housing is being treated as a commodity. The problem is, it’s not; it’s not just an asset. It has utility value and a communal and quasi-spiritual value, enabling people to feel rooted.”

Paul Williams

So, what can be done to use tax in an ethical way? Paul Williams, research professor of marketplace theology and leadership at Regent College, Vancouver and chief executive of the Bible Society, takes a Biblical perspective that he believes offers some solutions.

He takes as his starting point a story from the gospel of Matthew, where Jesus is asked whether people should pay taxes to Caesar. The question is a trap - either Jesus gives his backing to taxation that is highly unpopular with the Jewish people, or he rejects the tax in an act of rebellion against the Romans.

Jesus replies that they should “pay to the Emperor what belongs to the Emperor, and pay to God what belongs to God.” We are to pay our taxes to those in authority, but we are also to honour God.

While Williams believes that too much emphasis is placed on the Budget and political parties’ promises to be able to fix everything, and that a more radical rethink of our economy is required, he also sees room for positive tweaks to the current system.

One key area is the property market, the manifestation of so much inequality in society, with some people owning multiple houses while others cannot afford to buy one.

Williams argues that the ready availability of debt finance has allowed those who already hold assets to easily acquire properties, turning real estate into an investable asset class to the detriment of many of the poorer in society.

“The reason there’s so many homeless people and empty houses is due to debt finance. It makes it easy for a relatively small proportion of the population to acquire a large percentage of the assets.

“The system has allowed a structure in which a small advantage in the beginning can lead to big, big differences over time.”

Williams highlights parts of Devon and Cornwall that have been, he says, “completely ruined” by wealthy people from elsewhere buying second homes, leaving property “out of reach of anyone who lives and works there”.

Nevertheless, he believes taxation can be used in this area to help level the playing field.

He proposes a “pretty punitive” marginal rate of tax on ownership of more than one home. (Stamp duty only partly does the job and is a blunt instrument also affecting people moving homes, thereby makes mobility expensive).

“You want to disincentivise the way the housing market is used for speculation,” he said.

“Housing is being treated as a commodity. The problem is, it’s not; it’s not just an asset. It has utility value and a communal and quasi-spiritual value, enabling people to feel rooted.”

Buy-to-lets, meanwhile, are better than having empty second or third homes, but “wouldn’t it be better if occupiers could buy that house?” he adds.

Meanwhile, research by the Financial Times recently found a huge wealth gap between the average millennial and the top 10 per cent of millennials, who are benefiting from family wealth to accumulate substantial housing assets.

So, would increasing the rate of inheritance tax - one of the most hated of taxes - and/or lowering the threshold also help reduce some of this inequality? After all, how is it fair that one child in the UK is born to inherit large property wealth while another is born to inherit little or nothing? Or, even worse, that second child will only ever be able to afford to be the tenant of the first, paying them rent for the rest of their lives?

Williams is not a fan of inheritance tax per se, arguing that it is “not part of the package” in a Biblical image of a flourishing economy.

But he adds an important caveat: “the playing field is not level.

“There might be circumstances to impose a one-off tax on the very wealthy… if you want a transition to a more equitable society.”

Such steps are not easy to take. It is, he admits, probably “career suicide” for a politician to adopt such views. But if we are to take steps towards a fairer way of life, and avoid a two-tier society in decades to come, then maybe the conversation needs to shift this way. Perhaps the Budget could be the time to start.