US embassy cable - 04ROME868

UNCLAS  ROME 000868 
 
SIPDIS 
 
 
FROM U.S. MISSION IN ROME 
 
YEREVAN FOR AMBASSADOR ORDWAY AND USAI DIRECTOR SIMMONS 
STATE FOR AS/PRM DEWEY, PRM/P, EUR/CACEN AND IO/EDA BEHREND 
AND KOTOK 
USAID FOR DAA/DCHA GRIGSBY, DCHA/FFP LANDIS, E&E/NCA/C 
USDA/FAS FOR CHAMBLISS/TILSWORTH/GAINOR 
GENEVA FOR AMBASSADOR MOLEY, RMA LYNCH AND NKYLOH/USAID 
USUN FOR AMBASSADOR NEGROPONTE AND MLUTZ 
BRUSSELS FOR USAID/LERNER 
NSC FOR JDWORKEN 
 
E.O. 12958: N/A 
TAGS: EAID, EAGR, AORC, PREF, KUNR, WFP, UNHCR 
SUBJECT: WFP BOARD APPROVES ARMENIA PROTRACTED RELIEF AND 
RECOVERY OPERATION (PRRO) VALUED AT U.S. DOLLARS (USD) 11.56 
MILLION - 21,660 METRIC TONS 
 
REF: (A) 03 ROME 001069 
 
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SUMMARY 
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1. The WFP Executive Board, at its first regular session 
(February 23-26), approved a Protracted Relief and Recovery 
Operation for Armenia. The project 10053.1, entitled Relief 
and Recovery Assistance for Vulnerable Groups, is for two 
years (July 2004-June 2006), covering 110,000 beneficiaries 
per annum. The total cost to WFP is estimated at USD 11.56 
million. Over the life-of-project, WFP will supply (subject 
to the availability of funds) a total of 21,660 metric tons 
of food aid. End summary. 
 
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Background 
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2. The break-up of the Soviet Union and the conflict with 
Azerbaijan over Nagorno-Karabagh resulted in an energy 
crisis and economic blockade.  These factors, together with 
the 1998 Russian financial collapse, caused a further 
decline in and rearrangement of the economy.  Unemployment, 
which has forced a large percentage of the population to 
rely on subsistence farming, hovers at 25 percent, with an 
estimated half the country's population living on less than 
USD 2 a day. The United States is presently Armenia's 
largest bilateral donor. 
 
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U.S. intervention in support of approval of the Armenia PRRO 
--------------------------------------------- ---------- 
 
3. Herewith the essence of the supportive U.S. intervention: 
 
-Armenia's macroeconomic performance in recent years, with 
rapid growth and low inflation, is commendable. Nonetheless, 
poverty remains pervasive. Children, in particular, will 
remain in need for years to come after a decade of armed 
conflict and deteriorating social services. 
 
-Reportedly GOA annual educational expenditure per child 
decreased from USD 600 in 1992 to USD 36 in 1998. Reversing 
this trend, while assisting reforms linked to better and 
more efficient management of the education portfolio are 
recommended as priority areas for WFP and UN-partner Agency 
focus. 
 
-USDEL is supportive of assistance oriented to helping 
vulnerable populations acquiring the means to lessen their 
dependence on external assistance, through such activities 
as small-scale income generating projects. 
 
-USDEL strongly supports in-country Letters of Understanding 
(LOUs) with non-governmental organizations (NGOs), 
particularly in those instances where partner organizations 
bring additional cash resources. 
 
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U.S. support to WFP Armenia's ongoing PRRO operation 
--------------------------------------------- ------- 
 
4. U.S. support to WFP's present PRRO (10053.0) in Armenia 
covering the period July 1, 2001 - June 30, 2004 is USD 16.6 
 
million (29,770 metric tons). The U.S. is by far the largest 
donor. Total contributions (all donors) through February 16, 
2004 are USD 18.93 million (33,661 metric tons). 
 
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A little diplomatic jousting between Armenia and Turkey 
--------------------------------------------- ---------- 
 
5. In the original PRRO proposal text issued by WFP, a 
sentence was included in the Executive Summary as follows: 
"The 1989-1994 conflict over Nagorno-Karabakh and the 
ensuing econoic blockade imposed by Azerbaijan and Turkey 
further affected the socio-economic situation." Two other 
sentences later on in the text referred to the "blockade." 
 
6. The Turkish Embassy wrote to the WFP Secretariat and 
requested the following corrigendum: 
 
"The 1989-1994 conflict over Nagorno-Karabakh and the 
ensuing economic restrictions imposed by Azerbaijan and 
Turkey further affected the socio-economic situation," with 
which WFP agreed and duly amended the text. 
 
7. The Armenian delegate (as a Board observer) strenuously 
objected to the changed text and insisted that the word 
"blockade" be reinserted. The Turkish delegate (also a Board 
observer) commented that the official Armenian Statistical 
Yearbook had recorded some small volume of trade between the 
two countries, and hence the words "economic restrictions" 
more accurately reflected the matter. After deliberation, 
the WFP Secretariat agreed with the Turkish position. 
 
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Other donors 
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8. Other donor interventions were mostly supportive of WFP's 
efforts. Germany, however, commented that WFP's geographic 
focus was perhaps too narrow and that areas in the country's 
southwest might be reexamined for possible program coverage. 
Germany also felt that the food-for-training component of 
the program was not universally accepted and hinted that 
there were "coordination glitches" at times between GTZ and 
WFP. 
 
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Executive Board approval 
------------------------ 
 
9. The WFP Board approved the Protracted Relief and Recovery 
Operation for Armenia. The project 10053.1, entitled Relief 
and Recovery Assistance for Vulnerable Groups, is for two 
years (July 2004-June 2006), covering 110,000 beneficiaries 
per annum. The total cost to WFP is estimated at USD 11.56 
million. Over the life-of-project, WFP will supply (subject 
to the availability of funds) a total of 21,660 metric tons 
of food aid. Hall 
 
 
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2004ROME00868 - Classification: UNCLASSIFIED