US embassy cable - 05YEREVAN500

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000500 
 
SIPDIS 
 
E.O. 12958: DECL: 03/21/2015 
TAGS: PREL, ECON, ENRG, AM, RU 
SUBJECT: PUTIN'S UPCOMING VISIT TO ARMENIA: CEMENTING TIES 
 
REF: A) YEREVAN 287 B) YEREVAN 391 C) YEREVAN 476 
 
Classified By: DCM A.F. Godfrey for reasons 1.4 (b, d). 
 
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SUMMARY 
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1. (C) Russian president Vladimir Putin will visit Yerevan 
March 24 to 25 on what the Russian Embassy describes as a 
"working visit."  He will make only a few stops during his 
roughly 24-hour visit, and Russian diplomats told us to 
expect "no surprises."  While the visit may be routine from 
Moscow's point of view, it looms large for Armenia, 
especially on energy issues.  Korobkov emphasized that this 
visit is taking place because of the GOAM's continued urging, 
and noted that Putin expects to discuss regional security 
(especially N-K) and economic issues.  End Summary. 
 
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ECONOMIC ISSUES HIGH ON THE AGENDA 
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2. (C) During Putin's visit he will be focusing on commercial 
and economic issues between Russia and Armenia.  Oleg 
Korobkov, Political Counselor of the Russian Embassy, told us 
that Putin would pressure the Government of Armenia to 
support Russian interests in Armenia's energy sector, noting 
that he expected Armenia to accept Gazprom's participation in 
the extension of the Iran - Armenia gas pipeline closer to 
Yerevan (ref B).  Part of Putin's delegation includes 
businessmen Ara Abrahamyan, RAO-UES Chairman Anatoliy Chubays 
and banker V. O. Levin.  Putin may well press the GOAM for 
approval of RAO-UES' acquisition of Armenia's power 
distribution network, Electricity Network of Armenia. 
Korobkov added that Russia would offer in return to restart 
work some of the large, idle factories it acquired in the 
2003 debt-for-equity swaps with Armenia.  In a separate 
meeting March 16, Deputy Minister of Energy Iosef Isayan 
confirmed that Putin and members of his delegation would 
discuss the Iran - Armenia pipeline and the RAO-UES' bid to 
acquire the electricity network during the visit.  Isayan 
said that his ministry was proposing that the Armenian side 
discuss a recent proposal by Georgian Prime Minister Zurab 
Noghaideli to extend the Iran - Armenian pipeline to Georgia 
(ref C). 
 
3. (C) In his first meeting in Yerevan, Putin will be 
discussing economic issues with Minister of Defense Serzh 
Sargsian, the Armenian Co-Chair of the Intergovernmental 
Commission.  (Note:  The Armenian-Russian Intergovernmental 
Commission handles mostly economic issues, and functions in a 
similar fashion to the former U.S-Russian Gore-Chernomyrdin 
Commission.  End Note.)  According to Korobkov, among the 
issues they will discuss are transport issues, energy issues, 
the impact of renewed Kavkaz-Poti rail ferry service, and 
economic ties. 
 
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DOING A FAVOR FOR KOCHARIAN 
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4. (C) Korobkov portrayed this (oft-postponed) visit as the 
result of heavy GOAM pressure.  He noted especially that the 
ostensible reason for the visit, the opening of the "Year of 
Russia in Armenia" had been created to make the timing 
plausible.  That having been said, he continued to point out 
that this year was the Year of Azerbaijan in Russia -- next 
year, Korobkov added, will be the Year of Armenia in Russia 
and the Year of Russia in Azerbaijan.  Of course Putin will 
discuss Nagorno-Karabakh (N-K) with Kocharian, Korobkov told 
us, but we should expect nothing new, "since all Russian 
efforts" on N-K are "coordinated through the Minsk Group 
Co-Chairs."  In addition to regional security issues, 
Korobkov noted, we should expect that most of the 
conversation will focus on economic issues. 
 
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COMMENT 
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5. (C) According to Korobkov, Russia views this visit in 
largely economic terms, bringing along high-profile 
businessmen to prove the point.  Korobkov seemed to back off 
Russia's past efforts to make Armenia promise to reduce the 
diameter of the Iran-Armenia pipeline and to focus on 
Gazprom's efforts to control any extension of the pipeline 
past the Southern Armenian town of Kajaran.  We expect that 
Putin may use the opportunity to pressure Armenia into 
further concessions regarding the Iran - Armenia gas 
pipeline, and push for Russian participation in any future 
transit line to Georgia.  What direct pressure Putin will 
exercise about RAO-UES' bid to buy the electricity 
distribution network is not certain, although Chubays' 
presence as part of Putin's official delegation may speak for 
itself. 
 
6. (C) Contrary to GOAM wishes and earlier press information, 
Putin will not be visiting the "Genocide Memorial" during 
this "working visit." 
 
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PRESIDENTIAL DELEGATION 
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7. (C) Putin will be accompanied by a fairly large delegation 
by Russian standards (a 60-member advance team, an additional 
25 support staff and a 40-member delegation), the core group 
is relatively small.  Putin will be joined in most meetings 
by: 
--Sergey Eduardovich Prykhodko, Presidential Administration 
--Aleksandr Sergeyevich Sokolov, Minister of Culture 
--Mikhail Yefimovich Shvydkoy, Federal Rosagenstvo Kultura, 
  Former Minister of Culture 
--Artur Nikolayevich Chilingarov, Gosduma 
--Igor Yevgenyevich Levitin, Minister of Transport 
--Ara Abrahamyan 
--Anatoliy Borisovich Chubays, Chairman of RAO-UES 
--V. O. Levin, banker 
 
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SCHEDULE 
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8. (C) Putin's draft schedule follows: 
 
Thursday, March 24 
 
20:00  Putin (accompanied by his wife) arrives in Yerevan 
 
21:00  Putin meets with Minister of Defense Serzh Sargsian, 
       Armenian Co-Chair, Intergovernmental Commission 
 
RON    Presidential Guest House 
 
Friday, March 25 
 
11:00  Putin meets with President Kocharian 
       Presidential Palace 
 
13:00  Kocharian and Putin proceed to a working lunch 
       Hotel Yerevan (includes spouses) 
 
15:00  Putin calls on the Catholicos 
       Echmiadzin 
 
17:00  Putin, Kocharian open the Year of Russia in Armenia 
       Opera (includes spouses) 
 
20:00  Putin departs Yerevan 
 
(Note:  Bella Kocharian will host Lyudmilla Putina for a 
ladies' cultural program during the majority of the visit. 
End Note.) 
EVANS