US embassy cable - 05YEREVAN2023

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 002023 
 
SIPDIS 
 
DEPT FOR EUR/CACEN, EUR/ACE, EB 
 
E.O. 12958: DECL: 11/18/2015 
TAGS: EAID, PREL, PGOV, AM 
SUBJECT: FM BRAINSTORMS WITH DONORS, DIASPORA ON HIS NEW 
RURAL DEVELOPMENT INITIATIVE 
 
REF: YEREVAN 1797 
 
Classified By: CDA A.F.Godfrey for reasons 1.4 (b,d). 
 
------- 
SUMMARY 
------- 
 
1. (C) Foreign Minister Vartan Oskanian has hosted 
discussions with international donors over the past two weeks 
to brainstorm on a new Ministry of Foreign Affairs initiative 
aimed at galvinizing diaspora resources to alleviate poverty 
in rural Armenia.  Oskanian's initial plans suggest the plan 
will involve a nationwide "adopt-a-village" campaign that 
would combine infrastructure, community development and 
technical assistance projects.  The concept is linked to the 
theme of the next International Diaspora Conference that the 
MFA is planning for Fall 2006.  Oskanian has asked the 
Ambassador for USG technical support in brainstorming and 
coordinating with local branches of international donor 
organizations as the MFA moves forward with its plan.  End 
Summary. 
 
--------------------- 
LOOPING-IN THE DONORS 
--------------------- 
 
2. (C) Foreign Minister Vartan Oskanian has hosted a series 
of meetings recently with international donor organizations 
to discuss his ideas for a nationwide rural development and 
poverty reduction plan.  Oskanian, who has reportedly floated 
this idea with a number of influential diasporans over the 
last few months, has unveiled his plan with the World Bank, 
International Monetary Fund, United Nations Development 
Program and a handful of bilateral donors over the last few 
weeks.  At each of these meetings, Oskanian reminded donors 
that President Robert Kocharian blessed the initiative and 
instructed the Prime Minister to give the MFA the technical 
resources necessary to move it forward. 
 
-------------------------------------------- 
BIG BUDGET HOPES FOR AN ADOPT-A-VILLAGE PLAN 
-------------------------------------------- 
 
3. (C) The program will involve a nationwide 
"adopt-a-village" campaign aimed at galvanizing diaspora 
resources in an effort to alleviate rural poverty.  While 
Oskanian's team has not specified any implementation plans 
for the project, his initial comments suggest that the 
program would combine infrastructure, community development 
and local government technical assistance projects.  Post has 
learned that Oskanian has engaged a local (Canadian citizen) 
consultant to draw up a concept paper based on his initial 
conversations with donors for further discussion over the 
next 2-3 months.  Oskanian reportedly has "informal" 
commitments for upwards of USD 230 million for the project 
and will ramp up his fundraising efforts at meetings with 
American-Armenians during his November 23-25 trip to Los 
Angeles and San Francisco.  Oskanian has told us that he had 
already discussed the plan with American businessman Kirk 
Kerkorian and had a commitment from Kerkorian to contribute a 
substantial amount to the final budget. 
 
--------------------------------------------- ------- 
"RURAL" IS DU JOUR:  DIASPORA CONFERENCE, LINCY, MCA 
--------------------------------------------- ------- 
 
4. (C) The timing of Oskanian's new plan is linked to the 
theme of the GOAM's next International Diaspora Conference 
(tentatively planned for Fall 2006 in Yerevan).  The Ministry 
of Foreign Affairs has hosted the previous two conferences 
which have attracted more than 500 diasporans to Yerevan for 
a series of meetings and seminars on issues ranging from 
Armenian foreign policy to culture.  For the 2006 conference 
the MFA has chosen a central theme of "The Diaspora's Role in 
Rural Development and Poverty Alleviation."  According to 
Oskanian's advisor Vahe Aghabekiants, the MFA perceives that 
the international community -- including the USG through the 
Millennium Challenge Account -- is devoting increased 
attention and resources to rural development, especially in 
light of the widening disparity between rural and urban 
poverty rates.  Aghabekiants cited the recent Lincy 
Foundation decision to devote its next tranche of USD 60 
million to projects principally outside of Yerevan (ref) as 
the most notable example of this increased focus on rural 
Armenia. 
 
-------------------------- 
LOOKING FOR USG LEADERSHIP 
-------------------------- 
 
5. (C) Oskanian discussed his plan with the Ambassador and 
USAID-Armenia Director Robin Phillips on November 7.  During 
the meeting, Oskanian requested the USG's leadership and 
technical expertise when the MFA convokes donors to discuss 
the project once it begins to take shape.  The Ambassador 
encouraged Oskanian to take advantage of the expertise of 
Yerevan's Donor Coordination Group (of which the USG is a 
co-chair) to ensure that the project avoids duplicating 
ongoing programs, has mechanisms in place to fight against 
corruption and utilizes the valuable research of the GOAM's 
Poverty Reduction Strategy Paper and Millennium Challenge 
Account compact proposal process. 
 
--------------------------------------------- 
COMMENT:  WHAT'S DRIVING OSKANIAN'S NEW PUSH? 
--------------------------------------------- 
 
6. (C) Oskanian's plan is defintely not the first 
adopt-a-village concept in Armenia.  The US-based Children of 
Armenia Fund (funded in part by USAID) recently completed its 
widely-publicized first tranche of an integrated rural 
development project in the Armenian village of Karakert. 
While there are certain sustainability concerns about this 
model, it has attracted a great deal of attention from local 
and disporan Armenians who have shared their enthusiasm with 
the MFA.  Oskanian no doubt wants to capitalize on diasporan 
support for such approaches to help Armenia's poor, but there 
are equally important political gains for him if his 
nationwide project is successful.  Keeping the diaspora 
engaged in Armenian issues falls squarely within Oskanian's 
mandate.  This project would help focus the MFA's efforts 
with the diaspora, would combat donor fatigue, and would 
deepen the MFA's formal links with the wealthiest and most 
influential Armenian interests abroad.  With the 2007 and 
2008 elections looming, and early political alliances 
beginning to form, the program is also a chance for Oskanian 
to operate in domestic politics more broadly than his Foreign 
Minister portfolio normally permits.  At a minimum, 
Oskanian's campaign will keep MFA involved with large-scale 
development projects since the two biggest international 
projects (the latest Lincy Foundation donation and possible 
MCA funding) are being handled by other GOAM ministries. 
GODFREY