By Emil Danielyan, Robert McMahon in Washington, and Atom Markarian
The United States has approved $235.65 million in additional economic assistance to Armenia but made its release conditional on “corrective steps” that would improve Yerevan’s human rights and democracy records. A U.S. government agency that administers the Millennium Challenge Account (MCA), a multimillion-dollar scheme designed to reward economic and political reforms in the developing world, expressed concern about the Armenian government’s handling of the recent constitutional referendum. In a statement released in Washington on Monday, the Millennium Challenge Corporation (MCC) called into question the government’s commitment to democracy and good governance, citing serious irregularities reported during the November 27 vote.
“MCC is concerned about the government's lack of transparency and commitment to open and fair elections in the recent referendum,” its chief executive, John Danilovich, was quoted as saying.
Danilovich conveyed those concerns to President Robert Kocharian on Friday in a letter that was made public by MCC along with its statement. He told Kocharian that the MCC board, which comprises U.S. Secretary of State Condoleezza Rice, delayed its decision on Armenia’s MCA application last month as a result of “allegations of fraud, electoral mismanagement, mistreatment of individuals from opposition political parties and uneven access to the media.”
“We believe that corrective steps should be taken to demonstrate the Armenian government’s commitment to the fundamental principles underpinning Armenia’s eligibility for MCA assistance,” Danilovich wrote. “The MCC Board is engaged on this issue and we will seek their assessment of any actions taken.”
The MCC chief said the Kocharian administration should respect Armenian citizens’ constitutionally guaranteed freedom of assembly and “access to information from independent media and other sources.” He also called on the authorities to investigate the latest allegations of electoral fraud and “improve the fairness and transparency of the political and electoral process in Armenia in advance of the 2007-2008 parliamentary and presidential elections.”
“A failure to take such concrete actions could result in a suspension or termination of the Compact pursuant to MCC policy,” warned the separate MCC statement.
However, U.S. officials would not say what specifically the authorities should do in the coming weeks to kick-start the implementation of the five-year aid package aimed at reducing rural poverty in Armenia. They indicated only that the MCC board will await Yerevan’s response to Danilovich’s letter before meeting to decide how to proceed.
“Keeping the MCC process on track with Armenia will require the Armenian government to invigorate its commitment to bolstering democratic institutions,” the U.S. charge d’affaires in Yerevan, Anthony Godfrey, told RFE/RL on Tuesday. “We hope and we expect that there will be a positive response and we will be able to move forward and implement these projects.”
According to the MCC director for Eastern Europe and Asia, Stephen Groff, such a response would pave the way for the formal launch of the hefty aid scheme at the beginning of next year. "If all of these things happen expeditiously, we could be signing the [MCA] compact with the government of Armenia early next year,” he told RFE/RL in Washington. “But at this point, it's in the government of Armenia's hands as to how expeditiously that will happen.”
The assistance program, worth nearly one third of Armenia’s 2005 state budget, is based on the Armenian government’s proposals submitted to MCC last spring. The government initially asked for $175 million from the corporation. The sum was considerably increased during subsequent U.S.-Armenian negotiations.
Most of the MCA funds, $146 million, would be spent on rebuilding and expanding the country’s battered irrigation networks. Officials say improved water supply would significantly benefit as many as 250,000 farm households. The government would also like to receive $67 million for refurbishing about 1,000 kilometers of rural roads that have fallen into disrepair since the Soviet collapse. The project is meant to improve farmers’ access to markets and services. The remainder of the sum approved by the U.S. aid agency, $23 million, would be used for program administration and evaluation.
The proposed use of extra American aid has been repeatedly praised by U.S. officials. “They have developed an integrated, results-oriented program that will provide rural residents better access to jobs, social services, and markets and increase the productivity of farmers,” said Danilovich.
One of the authors of that program, Deputy Finance Minister Tigran Khachatrian, held a news conference on Tuesday in connection with the decision announced by the corporation. “It is expected that as a result of the implementation of this program the rural poverty rate will fall from 41 percent to 35 percent [within five years],” he said.
In Godfrey’s words, the assistance projects will also cement growing ties between Armenia and the United States. “The MCC announcement is an important milestone, and it demonstrates a big step forward in our relationship,” he said.
Armenia has already been one of the world’s leading per-capita recipients of U.S. economic assistance which has totaled over $1.5 billion since 1992. It is due to receive at least $75 million in regular U.S. aid allocated by Congress next year.
Armenia is among 16 low-income countries of the world that have been eligible for MCA funding ever since the scheme was unveiled by the administration of President George W. Bush last year. The Bush administration has already allocated more than $900 million to five of those nations, including Georgia.