GOAM CALLS ON USG TO RECONSIDER FY 2005 FMF

1. (U) Sensitive but Unclassified. Protect
Accordingly.



2. (SBU) Deputy Foreign Minister Ruben Shugarian
demarched DCM February 26 regarding expected
differences in FY 2005 military assistance levels for
Azerbaijan and Armenia. Shugarian delivered an eleven-
point non-paper that called on the USG to reconsider
the previously announced FMF assistance numbers. He
asserted that disparity of military assistance levels
threatened GOAM's ability to maintain the current
ceasefire with Azerbaijan. The demarche pointed to
"increasingly belligerent" statements made by
Azerbaijani leaders as a result of increased USG
military funding to Azerbaijan. (Note: The veiled
reference presumably referred to comments made in the
wake of the recent death of an Armenian soldier during
a PFP training program in Budapest. End Note.)



3. (SBU) DCM responded by pointing out the global
context in which the USG made decisions regarding FMF
funds. She highlighted USG priorities for fighting
terrorism, maritime security and narcotics trafficking
in the region and the relatively greater threats
currently faced by Azerbaijan. She said Azerbaijan's
capacity to absorb higher levels of military funding
also played a role in determining the FY 2005 level of
funding. She outlined the next steps in the budget
request process and emphasized the role of the U.S.
Congress.



4. (SBU) Text of the non-paper follows:

BEGIN TEXT
--The Government of the Republic of Armenia is highly
appreciative of the assistance provided by the United
States of America to the people of Armenia through the
years.
--Through this assistance it has become possible to
foster transition to a market economy, strengthen
democratic institutions, and enforce protection of
human rights.
--Military assistance provided to Armenia in the last
two years has been instrumental in enhancing the
security of the country.
--It was our strong belief that the US, as a co-chair
of the Minsk Group and one of the main players in the
Nagorno Karabagh dispute settlement, would act
especially vigilantly not to jeopardize the fragile
military balance presently existing in the region.
--The military balance is the single most important
guarantor of the existing self-monitored ceasefire.
--The disparity between the levels of military
assistance proposed for Armenia and Azerbaijan for FY
2005 raises doubts about our assumption.
--Increasingly hostile and belligerent statements from
Azerbaijan are fueled by the belief that their military
resources will indeed increase through various means.
--Recent public statements by the Azerbaijani
leadership clearly indicate that they are, at least in
part, relying on a possible military venture in the
future.
--The Armenian government and the Armenian people
relied on US assurances that a waiver of Section 907
would not lead to a disparity in military assistance in
the two countries.
--The Government of Armenia is extremely concerned by
the proposal of the US Administration and calls upon it
to reconsider the decision, as well as to continue to
act as an honest broker, and undertake all the
necessary steps to ensure peace and stability in the
region.
--The Armenian government is prepared to discuss
special projects that might fall within a broader
security program, and useful in the war on terrorism.
--Yerevan; February 27, 2004.
END TEXT

ORDWAY