US embassy cable - 04YEREVAN2348

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 002348 
 
SIPDIS 
 
STATE FOR T AND EUR/CACEN 
DEFENSE FOR OSD/ISP 
 
E.O. 12958: DECL: 10/20/2014 
TAGS: PREL, PARM, MARR, AM 
SUBJECT: EUR DAS KENNEDY'S OCTOBER 14 - 17 VISIT TO ARMENIA 
 
REF: A. YEREVAN 2281 
 
     B. YEREVAN 1815 
 
Classified By: Ambassador John M. Evans for reasons 1.4 (b) and (d) 
 
Summary 
------- 
 
1.  (C) Armenia plans to follow through with its commitment 
to deploy non-combat troops to Iraq.  The issue is a 
political hot potato, however, and the GOAM hopes the USG 
will help keep the issue out of public view while it works to 
obtain the parliamentary approval required for deployment. 
This was a key part of President Kocharian's message to EUR 
DAS Laura Kennedy during her October 14-17 visit to Armenia. 
In addition to covering a broad range of issues with top 
government, business, and civil society leaders, DAS Kennedy 
signed a new bilateral Article 98 agreement with FM Oskanian. 
 End Summary. 
 
2.  (C) DAS Laura Kennedy visited Yerevan from October 14-17 
and met with President Robert Kocharian, Foreign Minister 
Vartan Oskanian, Minister of Defense Serzh Sargsian, and 
National Assembly Speaker Artur Baghdasaryan.  She covered 
the full range of issues including GOAM support to the 
coalition in Iraq, efforts to open the border with Turkey, 
resolution of the Nagorno-Karabakh impasse and the nature of 
USG assistance for Armenia.  President Kocharian and FM 
Oskanian complained bitterly about a move in the UN General 
Assembly by Azerbaijan to raise Nagorno-Karabakh outside the 
context of the Minsk Group negotiations.  (Details of the 
discussion on the UNGA discussion are covered in REF A.)  DAS 
Kennedy also attended the launch of a USAID-sponsored program 
supporting the development of new small and medium sized 
businesses.  Press coverage of DAS Kennedy's visit was 
widespread, factual and generally very positive. 
 
TROOPS TO IRAQ: TOUGH POLITICAL SLEDDING AHEAD 
--------------------------------------------- - 
 
3.  (C) DAS Kennedy congratulated the GOAM for its decision 
to deploy non-combat troops in Iraq, noted reports of 
domestic criticism, and asked if we could help in this 
regard.  Officials voiced their support for the move, but 
each expressed concern that it may be difficult to pass this 
decision through the National Assembly, Armenia's parliament. 
 They noted popular concern that this deployment could affect 
the security of ethnic Armenians residing in Iraq and 
elsewhere in the Middle East.  Defense Minister Sargsian told 
DAS Kennedy that he continued to support deploying Armenian 
troops in Iraq.  He was confident that the support of the 
MFA, MOD and the President should be enough to push the 
legislation through the National Assembly.  Speaker 
Baghdasaryan also expressed confidence in the passage.  He 
did not indicate specifically when the proposal would be 
dealt with, but indicated a general November timeframe. 
Sargsian requested the help of U.S. troops to protect 
Armenians in Iraq if they suffered from a backlash in 
response to this deployment. 
 
4.  (C) President Kocharian echoed Baghdasaryan in indicating 
that the government wanted to handle the planned deployment 
in as low-key a fashion as possible in order to get it 
through the National Assembly quickly and successfully.  He 
specifically requested that the USG assist the GOAM in 
keeping this issue out of the public eye. 
 
ARTICLE 98 AGREEMENT: SIGNED BUT PENDING RATIFICATION 
--------------------------------------------- -------- 
 
5.  (C) DAS Kennedy signed a new Article 98 agreement with FM 
Oskanian in a quiet ceremony on Saturday, October 16.  (Note: 
The GOAM Constitutional Court declared the previous Article 
98 agreement -- the text of which referred to the Rome 
Statute -- unconstitutional until Armenia ratifies the 
Statute itself.  In a clear gesture of good will, the GOAM 
pushed a new text without reference to the Statute through 
its interagency process in short order (REF B). End Note.) 
Oskanian told DAS Kennedy that he expected the National 
Assembly to ratify the Article 98 agreement by the end of 
November.  The agreement must still, however, be certified by 
the Constitutional Court before it moves to the NA for 
ratification. 
 
Business and Civil Society: Some Progress, Much To Do 
--------------------------------------------- -------- 
 
6.  (C) At a luncheon with leaders of non-governmental 
organizations, DAS Kennedy pressed for closer engagement with 
the government; remaining outside the process simply means 
that dissenting voices will not be heard.  She pledged 
continued USG support for the development of Armenia's civil 
society.  Mikhael Daniliyan, chair of Armenia's Helsinki 
Association told DAS Kennedy that while there have been some 
improvements -- like the recent registration of Armenia's 
Jehovah's Witnesses -- much progress needs to be made to 
secure citizen's basic human rights.  Kennedy commended NGOs 
for pursuing regional ties and urged them to develop them 
further with Azerbaijan and Georgia. 
7.  (C) At a dinner with U.S. business leaders, DAS Kennedy 
heard a litany of complaints about the difficult business 
environment in Armenia, with corruption stressed by all. 
Byzantine, often contradictory legislation makes it tough to 
run a successful business in Armenia.  Sporadically enforced 
laws and predatory tax inspectors were challenges, but 
business leaders were nevertheless optimistic about prospects 
in this steadily-growing economy. 
 
ASSISTANCE: APPRECIATION ACROSS THE BOARD 
----------------------------------------- 
8.  (C) On October 15, DAS Kennedy attended a USAID-sponsored 
event where Ambassador Evans launched a "road map" for 
startup businesses in Armenia.  This project, in partnership 
with the Armenia's Ministry for Trade and Finance, is 
intended to help new businesses navigate the difficult waters 
of local legislation.  In each of DAS Kennedy's meetings, 
GOAM officials expressed gratitude for effective, carefully 
targeted, USG assistance.  President Kocharian, FM Oskanian 
and Defense Minister Sargsian all expressed embarrassment 
over their first attempt at a proposal for the Millennium 
Challenge Corporation (MCC) and acknowledged that their 
proposal was poorly focused.  Kocharian said he had ordered 
that it be redrafted immediately.  DAS Kennedy underscored 
the fact that there was still time to improve the proposal 
and that the MCC remained eager to engage Armenia on this 
issue. 
 
9.  (C) During her meeting with Defense Minister Sargsian, 
DAS Kennedy raised the issue of the Foreign Military 
Financing (FMF) projects.  Sargsian noted that he wished to 
spend FMF "more effectively."  He brought up a recurring MOD 
request to use FMF funds exclusively for the purchase of 
military communications equipment.  Sargsian stated that this 
purchase would address one of the "basic needs" of the 
Armenian Military.  DAS Kennedy replied that the nature of 
FMF spending is up for discussion between Embassy Yerevan's 
Office of Defense Coordination (ODC) and the MOD and 
expressed concern over the focus of the pattern thus far. 
She welcomed the pending defense assessment as a major way to 
allow the USG and Armenia to more effectively address  MOD 
needs. 
 
10.  (U) DAS Kennedy has reviewed this telegram. 
EVANS