US embassy cable - 04YEREVAN641

UNCLAS SECTION 01 OF 02 YEREVAN 000641 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EUR/CACEN 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, AM, GG 
SUBJECT:  SAAKASHVILI MAKES FIRST STATE VISIT TO 
ARMENIA 
 
 
1. (U) Sensitive but unclassified.  Please protect 
accordingly. 
 
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SUMMARY 
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2. (SBU) Georgian President Mikhail Saakashvili paid 
his first state visit to Armenia March 11-12, praising 
the country and its president as an "ideal partner." 
Saakashvili and Armenian President Robert Kocharian 
focused their discussion on strengthening economic ties 
between the two countries and improving the situation 
in the Armenian-populated Georgian region of Javahketi. 
Armenian opposition leaders, who view Saakashvili's 
ascent to power as a model for their own anti- 
government campaign, saw their position undercut by the 
Georgian leader's warm public statements regarding his 
Armenian counterpart.  END SUMMARY. 
 
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ECONOMIC TIES TO BE STRENGTHENED? 
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3. (SBU) GOAM officials endorsed Saakashvili's proposal 
for increased bilateral economic integration and the re- 
establishment of the Armenian-Georgian Commission on 
Economic Cooperation to be co-chaired by Armenian Prime 
Minister Andranik Margarian and Georgian State Minister 
Zurab Zhvania.  Before Saakashvili's visit, Armenian 
authorities stressed the importance of reaching an 
accord to lower Georgia's freight charges on state- 
owned rail lines used by Armenia, which are 
substantially higher than those Georgia imposes on 
Azerbaijan. (Note:  Approximately 80 percent of 
Armenia's trade transits through Georgia.  Armenia has 
long contended that Georgia imposes discriminatory 
tariffs on freight from Armenia in violation of its WTO 
commitments.  End Note.)  Though Saakashvili and 
Kocharian reached no formal agreement on the freight 
tariffs, Saakashvili reiterated his support for 
economically integrating the countries through the 
removal of trade and immigration barriers.  Deputy 
Minister of Industry and Trade Tigran Davtyan told us 
that Saakashvili promised to "solve" the freight charge 
issue.  Armenian Foreign Minister Vartan Oskanian also 
endorsed in principle Saakashvili's proposal to re- 
start economic ties with Azerbaijan as a first step to 
reconciliation.  He noted, however, that the 
Azerbaijani government has rejected such proposals in 
the past.  Oskanian told us that discussions with 
Saakashvili had been "productive." 
 
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PRESIDENTS DISCUSS OPENING TWO RAILWAYS 
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4. (SBU) Kocharian and Oskanian pushed Saakashvili to 
support the re-opening of rail lines in the region.  Of 
prime importance to Armenia is the long-closed railway 
running from Armenia to Russia through the breakaway 
Georgian province of Abkhazia.  Kocharian hopes that 
Saakashvili will take a more conciliatory stand towards 
Abkhazia than his predecessor, Eduard Shevardnadze. 
Oskanian told journalists that the GOAM sought 
Saakashvili's help, as part of a larger Georgian effort 
to become engaged in regional dispute resolution, in 
pressuring Turkey to re-open an East-West rail line 
that connects the three countries.  The Turkish 
blockade of Armenia has closed the Kars-Gyumri-Tbilisi 
rail line, and its opening would help end Armenia's 
economic isolation. 
 
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KOCHARIAN PLEDGES NO INTERFERENCE IN JAHVAHKETI 
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5. (SBU) Saakashvili sought and received a pledge from 
Kocharian not to interfere with Georgia's 
administration of its ethnically Armenian province of 
Javahketi.  Saakashvili told a press conference that he 
appreciated Kocharian's "principled stand" on the 
Javahketi issue, and that he was "thankful to the 
Armenian president for his strict position on 
territorial integrity and stability in Georgia."  Both 
presidents agreed to collaborate to find ways to 
improve the economic situation in the region, which is 
one of Georgia's poorest.  In a joint declaration, 
Saakashvili and Kocharian noted the need to develop 
Javahketi, and as a first step build a road from 
Tbilisi to the region. (Note:  This is a reaction to 
calls by the ARF, a partner in the governing coalition, 
for autonomy in Javahketi.  Our recent contacts with 
the ARF leadership suggest they may have a slightly 
more nuanced view, and are clearly aware of the need 
for stability and keeping Javahketi as part of Georgia. 
They warmly welcomed the appointment of Nikoloz 
Nikolozishvili, the Georgian Ambassador to Armenia, as 
Governor of Javahketi.  End Note.) 
 
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COMMENT: POSITIVE FIRST IMPRESSION 
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6. (SBU) Though no formal agreements were announced 
during Saakashvili's visit, the GOAM appears to be 
pleased at the reaffirmation of strong bilateral ties 
following the change of power in Tbilisi.  The 
political turmoil in Georgia during the past four 
months had caused substantial consternation in Armenia, 
whose leadership feared that destabilization in Georgia 
could further isolate Armenia and potentially cause a 
severe economic crisis.  Saakashvili seemed intent on 
not only maintaining the status quo, but also enhancing 
Georgia's relationship with Armenia.  Saakashvili 
appeared more willing than his predecessor to lower 
Georgian freight tariffs and pursue an opening of the 
railway through Abkhazia, two long-standing desires of 
the GOAM. 
 
7. (SBU) Saakashvili's visit potentially alters the 
domestic political situation in Armenia.  The Georgian 
President's seemingly amiable relationship with 
Kocharian could possibly weaken the opposition's drive 
to unseat Kocharian.  Saakashvili has been a model for 
the opposition leaders (Stepan Demirchian, Armen 
Sargsian, and Artashes Geghamian), who have 
consistently cited Georgia's "rose revolution" and 
Saakashvili as models for their announced "Hot Spring" 
campaign to bring down the Armenian government.  While 
in Armenia, Saakashvili praised Kocharian past the 
point of diplomatic courtesy, telling journalists that 
"Armenia is fortunate to have such a president," and 
that Kocharian is an "ideal partner."  Such statements 
by a man widely respected in Armenia could help deflate 
whatever slight momentum the opposition has gained in 
their continuing bid to oust Kocharian. 
 
ORDWAY