US embassy cable - 04YEREVAN1892

UNCLAS SECTION 01 OF 02 YEREVAN 001892 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EUR/CACEN, EUR/ACE, EUR/PGI, DRL, EB 
DEPT PLEASE PASS USAID AND MCC 
 
E.O. 12958: N/A 
TAGS: PREL, KMCA, EAID, AM 
SUBJECT:  ARMENIA MCA BI-WEEKLY UPDATE -- AUGUST 27, 2004 
 
REF:  YEREVAN 1771 
 
Sensitive But Unclassified.  Please protect accordingly. 
 
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SUMMARY 
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1. (SBU) GOAM Poverty Reduction Strategy Paper (PRSP) 
Secretariat Coordinator Hovik Azizyan confirmed to us during 
 
SIPDIS 
an informal meeting August 25 that the GOAM had pushed back 
its planned proposal submission schedule.  Azizyan said the 
change was necessary due to the large number of proposed 
projects and activities stimulated by the local MCA 
consultative process.  The MFE expects that the MCA Board of 
Trustees will be able to consider the MFE submission and 
submit a first draft of the MCA Board's Compact proposal to 
the MCC (with at least priority directions/sectors defined) 
by the end of September 2004.  The GOAM then intends to 
invite the MCC representatives to Armenia to discuss the 
draft proposal.  End Summary. 
 
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ARMENIANS LOOKING FORWARD TO INFO FROM "LESSONS LEARNED" 
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2. (SBU) We met with Ministry of Finance and Economy (MFE) 
PRSP Secretariat Coordinator Hovik Azizyan August 24 to 
discuss the MCA consultative process and prospects for the 
GOAM's compact proposal.  Azizyan's comments indicated that 
the GOAM continued to focus on the MCA process even during 
the August vacation season and despite the absence of the 
MFE Deputy Minister who oversees these issues.  Azizyan was 
aware of the upcoming meeting between MCC representatives 
and Senior Presidential Economic Advisor Vahram Nercissiantz 
scheduled for August 27.  He said that the GOAM looked 
forward to hearing from the MCC about "lessons learned" from 
compact proposals already submitted by eligible countries. 
He acknowledged that any new information stemming from the 
August 27 meeting may affect the expected timing and/or 
substance of the GOAM's MCA Compact proposal. 
 
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PROPOSALS CONTINUE TO STREAM IN FROM THE PUBLIC 
--------------------------------------------- -- 
 
3. (SBU) The MFE continues to sort through numerous activity 
proposals generated by the MCA consultative process. 
Azizyan clarified that, following an initial cataloging and 
vetting by the MFE, the proposals are forwarded to the 
appropriate GOAM ministry for review and comment.  The line 
ministries will then submit a summarized and rank-ordered 
version of all proposals to the MCA Board of Trustees no 
later than September 20, 2004.   To accomplish this, the MFE 
had hoped to receive combined sector-specific proposals from 
the various ministries and other state agencies by August 
20, 2004. 
 
4. (SBU) According to Azizyan, several GOAM ministries and 
other state agencies have not yet submitted their combined 
proposals to the MFE, due mostly to the unexpectedly large 
number of proposals received from the public.  According to 
the GOAM official, over 300 activity proposals have been 
received to date, and the escalating public interest in the 
MCA program probably would generate a significant number of 
new proposals before the GOAM's September 1, 2004 closing 
date for proposal submissions. 
 
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PROPOSALS FROM HI-TECH, ENVIRONMENTAL SECTORS SURPRISE GOAM 
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5. (SBU) The current proposal review process has revealed a 
greater level of interest in activities in the high 
technology and environmental sectors than was predicted 
earlier.  These sectors, in addition to the project areas 
identified early on in the consultative process (education, 
health and other social sectors, roads, irrigation, dam 
construction, etc.) appear to be modifying the GOAM's 
approach to the issue.  Azizyan told us that the MFE is 
contemplating how it might add activities in these sectors 
to its eventual MCA compact proposal.  He also noted that 
the MFE is discussing ways to consider the varying sectoral 
needs of each region when consolidating the proposals. 
(Comment:  The need to be responsive to needs at the 
regional level has been a constant theme throughout the 
consultative process in Armenia's rural areas.  This idea is 
clearly filtering up through the GOAM bureaucracy as well as 
the sense that a compact proposal that does not enjoy the 
support of the regional governments will pose problems for 
the GOAM.  End Comment.) 
 
6. (SBU) Azizyan also mentioned that the GOAM is concerned 
about the problem of potential negative reactions from 
groups whose proposals are ultimately not included in the 
final MCA Compact proposal.  The high number and scope of 
proposals received already exceeds any amount that the GOAM 
believes Armenia can reasonably expect to receive under the 
MCA program.  To address this, Azizyan said the GOAM intends 
to keep the public informed regarding the current status of 
proposals through various channels such as its website.  He 
also said the GOAM would engage individuals or groups whose 
proposals were not included in a future compact with a full 
briefing on the GOAM's decision-making criteria. 
 
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TIMETABLE SHIFTS 
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7. (SBU) Azizyan said the MFE now expects to receive the 
combined sector-level input from various ministries by 
August 31.  Nonetheless, the MFE's own timetable for its 
summarized and combined submission to the MCA the Board of 
Trustees remains the same (September 20).  The MFE also 
expects that the MCA Board of Trustees will be able to 
consider the MFE submission and submit a first draft of the 
MCA Board's Compact proposal to the MCC (with at least 
priority directions/sectors defined) by the end of September 
2004.  The GOAM then intends to invite the MCC 
representatives to Armenia to discuss the draft proposal. 
Pending positive feedback from the MCC, the second phase of 
the consultative process will be initiated and the final 
version incorporating public feedback will be submitted to 
the MCC. 
EVANS