ARMENIA'S SCORECARD DELIVERED WITH A WARNING ON

UNCLAS SECTION 01 OF 02 YEREVAN 001440

SIPDIS

SENSITIVE
SIPDIS

MCC FOR AMB. DANILOVICH, DEPARTMENT FOR EUR (DAS BRYZA)

E.O. 12958: N/A
TAGS: EAID PGOV PHUM KMCA AM
SUBJECT: ARMENIA'S SCORECARD DELIVERED WITH A WARNING ON
POLITICAL RIGHTS


YEREVAN 00001440 001.2 OF 002


Sensitive but Unclassified. Please Treat Accordingly.

Summary
--------------


1. (SBU) On October 6, 2006, Charge d'Affaires (CDA) and
MCC Resident Country Director Alex Russin presented the MCC
Indicator Scorecard on Armenia to Armenia's full MCA
Governing Council, chaired by the Prime Minister. While we
told the Council that Armenia had technically passed the
criteria, the Board was seriously concerned about Armenia's
poor policy performance on democratization issues, especially
on the indicators in the "Ruling Justly" category. We pushed
hard for better performance in these weak areas, and called
on the PM and his colleagues to fulfill completely the
commitments made by Armenia in FM Oskanian's letter to MCC,
including to support fully the work of international and
local organizations to bring about free and fair elections in
2007 and 2008. The MCC Board of Directors would consider
these factors in its November 8 deliberations regarding
Armenia's continued eligibility for MCC support. After a
period of discussion, the Prime Minister closed the meeting
by acknowledging that Armenia's eligibility depends on good
performance in these elections and pledging to take all steps
within his power -- both as Prime Minister and as head of his
party to achieve this goal. End Summary.


2. (SBU) On October 6, 2006, CDA and MCC Resident Country
Director presented the 2006 MCC Indicator Scorecard on
Armenia to the Government of Armenia at the MCA-Armenia
Governing Council meeting, specifically convened to address
Armenia's policy performance on the MCC eligibility criteria.
The Governing Council is the highest authority in the
MCA-Armenia program governance structure. It is chaired by
the Prime Minister and is comprised of six members of the
government and five representatives of civil society. (Note:
Points delivered were drawn from those received from the
State Department's European Bureau and MCC with additional
points generated within the Mission; points received directly
from MCC, without interagency consensus, were not suitable
for this event. End Note.)


3. (SBU) CDA reminded the Governing Council that the
Millennium Challenge Account is built on the principle that
USG assistance will be used more effectively in countries
that have already adopted good policies. And that in
selecting eligible countries, MCC uses sixteen indicators to
evaluate a country's performance in the broad categories of
ruling justly, investing in people and encouraging economic
freedom as well as two recently added indicators to measure
natural resources management.


4. (SBU) We reviewed the scorecard with the MCA Governing
Council noting that while Armenia had technically passed the
MCC indicator requirements, the MCC Board was seriously
concerned over Armenia's policy performance, specifically in
the category of "Ruling Justly." CDA was blunt about our
concern about Armenia's decline in key indicators, Political
Rights, Civil Liberties, and Voice and Accountability. In
particular, Armenia's Political Rights score continued to
decline this year from a 20 two years ago to a 13 for FY07
mostly as a result of the flawed November referendum on
constitutional amendments. Armenia's Civil Liberties score
declined from a 32 to a 28 reflecting, inter alia, government
constraints on press freedom.


5. (SBU) CDA highlighted that the MCC Board takes these
declines very seriously and stressed that, in addition to the
Scorecard, the MCC Board also reviews the progress made by
the GOAM on the implementation of democratic reforms and
would pay particular attention to Armenia's engagement with
the international and local organizations helping to
implement reforms necessary for Armenia to carry out proper
elections in 2007 and 2008. We called attention to MCC CEO
Amb. Danilovich's letter to President Kocharian regarding USG
expectations of steps that the GOAM would take and also
Foreign Minister Oskanian's response to MCC which included
specific commitments to engaging with and supporting
activities related to democracy promotion. CDA noted that
the MCC board meeting would take place on November 8 and that
the Board would look for improved performance.


6. (SBU) In the ensuing discussion there were some questions
related to how the GOAM could improve its scoring and why
some of the parameters used to measure the MCC indicators had
changed. We underscored that it was pointless to complain
about whether the GOAM thought the scores reflected an

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objective assessment, but encouraged the GOAM to speak
directly with Freedom House (who calculates the Political
Rights, Civil Liberties indicators). In reference to the
second question, we explained that the measurement changes
where technical and did not affect Armenia's ranking.


7. (SBU) The Prime Minister closed the meeting by stating
that what needed to happen was that the GOAM continue to work
towards implementing free and fair elections in 2007. He
pledged that he would do all he could, both in his position
as Prime Minister and as head of his party, to support this
goal.
GODFREY