US embassy cable - 05YEREVAN1531

C O N F I D E N T I A L YEREVAN 001531 
 
SIPDIS 
 
DEPARTMENT FOR EUR (DAS BRYZA) AND EUR/SNEC (AMB. MANN) 
 
E.O. 12958: DECL: 08/23/2015 
TAGS: PREL, ECON, ETRD, TU, GA, AM, AJ 
SUBJECT: RAILROAD ISOLATION AN URGENT GOAM CONCERN 
 
REF: A. BAKU 1226 
 
     B. YEREVAN 1494 
     C. 04 YEREVAN 2656 
 
Classified By: Amb. John M. Evans for reasons 1.4 (b, d). 
 
Summary 
------- 
 
1.  (C) Top Armenian government officials continue to voice 
their deep concern about plans to build a railroad which 
would further isolate Armenia and exclude it from the process 
of regional economic integration.  This concern has been 
echoed by the Armenian-American community and has found 
resonance with several Members of Congress.  We understand 
that Washington is considering how best to respond to 
Azerbaijan's request that the U.S. support this project (ref 
A).  While the GOAM's expressed concerns are -- for them -- 
important arguments against the rail by-pass, we believe that 
this project would work against USG interests for a more 
strategic reason:  building this new line would remove an 
important economic incentive for the states of the region to 
resolve the N-K conflict.  End Summary. 
 
2.  (C) FM Oskanian continues to raise Armenia's concern 
about the proposed rail link from Turkey directly to Georgia. 
 Oskanian met with U.S. Democratic National Committee 
Chairman Howard Dean on August 26 and focused on the proposed 
rail line linking Azerbaijan to Turkey through Georgia as his 
top concern. According to Dean and visiting Los Angeles City 
Councilman Eric Garcetti (who met with Oskanian separately), 
Oskanian said the re-activation of its Gyumri-Kars railroad 
was key to the on-going talks between Armenia and Turkey. 
Oskanian reportedly said that international financing of the 
proposed rail link going around Armenia (ref B) would send 
the wrong message regarding regional integration and would 
remove a key incentive for establishing commercial links 
between Armenia and Turkey and Azerbaijan. 
 
3. (C) Oskanian's concern about the proposed rail link does 
not come as a surprise.  GOAM officials are raising the topic 
with increased frequency with us and say it would only 
exacerbate the economic pressure and displacement of the 
blockade.  During his August 16 meeting with Ambassador 
Evans, Deputy Foreign Minister Kirakossian also raised the 
issue, noting that the GOAM viewed it as another example of 
Armenia's isolation in the region (ref C). 
 
4.  (C) In a January 13, 2005 INR report, analysts stated 
that "Baku's evident willingness to provide cash to support 
this project revives prospects for the new railroad and 
threatens to nullify a big bargaining chip that Armenia has 
used to try to lure Turkey away from its alliance with 
Azerbaijan.  Even more ominously for Yerevan, opening up this 
new route would cause lasting economic damage to Armenia, 
because it not only would bypass Armenia but also would open 
an alternative rail route between Turkey and Russia."  As we 
reported in December (ref C), the Armenian authorities seem 
to be bending over backward to make the re-opening of the 
existing rail route attractive, including indicating a 
readiness to forego transit fees on rail cargoes. 
 
5.  (C) Our primary concerns are focused more on the economic 
incentive for the states of the region to remove this 
disruption to normal transport routes.  We believe that even 
a partial lifting of the rail blockade would produce results 
which could demonstrate the economic value of resolving this 
long-standing conflict. 
EVANS