BRYZA AND PRIME MINISTER DISCUSES DEMOCRACY,

C O N F I D E N T I A L YEREVAN 001476 SIPDIS SIPDIS E.O. 12958: DECL: 10/20/2016 TAGS: PGOV PREL EPET ENRG IR TU AM SUBJECT: BRYZA AND PRIME MINISTER DISCUSES DEMOCRACY, ENERGY AND GEORGIA REF: A) YEREVAN 1396 B) YEREVAN 1424 C) BAKU 702 Classified By: EconOff E. Pelletreau for reasons 1.4 (b,d). -------------- SUMMARY -------------- ¶1. (C) EUR DAS Bryza met with Armenian Prime Minister Andranik Markarian on October 4 to encourage Armenia to work towards free and fair elections in 2007 and 2008 and to discuss energy security and other regional issues. Markarian was open and engaged. He welcomed U.S. assistance on elections and explained Armenia's plans for improving energy security which include increasing gas imports from Iran. He also voiced concern over deteriorating Russian-Georgian relations and a proposed regional railroad which would bypass Armenia. END SUMMARY. -------------- --- PM SUPPORTS USG ASSISTANCE FOR DEMOCRATIC REFORM -------------- --- ¶2. (C) Armenia Prime Minister Andranik Markarian welcomed and pledged support for USG democracy-related assistance in a meeting on October 4 with EUR Deputy Assistant Secretary Matthew Bryza. Pushing a pro-democracy message, Bryza underscored that improving the electoral process is in Armenia's self interest. He said that particular attention must be paid to improving the voters' list and encouraged the GOAM to work to reach consensus with the Venice Commission on proposed changes to the electoral code. Markarian said that Armenia welcomed the USG's efforts and did not view them as "interference" in domestic affairs. He said that "there are some impediments" to democracy in Armenia, but that the GOAM understood that democracy was important and could not be achieved without a fair electoral process. Markarian said that he was "very glad that there is a lot of attention being paid to the 2007 and 2008 elections," and added "both as Prime Minister and as head of a political party, we will try and make it work." ¶3. (C) Bryza cited the award of the MCC Compact as evidence of our strong partnership with Armenia and our confidence that Armenia is headed in the right direction. The PM agreed, saying that the GOAM enjoys a good relationship with MCC and that the GOAM would "make a big effort" to ensure that the indicators remain positive. He said that the proposed amendments to the electoral code would likely have a positive impact on the indicators as well. -------------- -------------- ENERGY SECURITY: LOOKING TO IRAN AND READY TO HELP GEORGIA -------------- -------------- ¶4. (C) Turning to regional issues, Bryza emphasized that a balanced energy security policy for Europe and Eurasia is a Washington priority, not because we are anti-Russian, but because, as with any business, the market needs competition. He explained that the U.S. understood that Armenia is in a difficult situation as far as energy is concerned and acknowledged that Armenia is pursuing closer energy ties with Iran. Bryza raised the on-going US efforts to bring Iran into compliance with various U.N. Security Council resolutions and our oft-voiced concern about strengthening ties between the Armenian and Iranian energy sectors. He suggested Armenia might further develop its energy ties with Georgia. The PM described a new, second high-voltage transmission line being constructed between Armenia and Georgia, but said that Armenia needed alternate sources of energy. He said that in the current conflict between Georgia and Russia "the reality is that Armenia may suffer most. Unfortunately, today, we are highly dependent on Georgia. We are very interested in stability in Georgia and its maintaining good relations with its neighbor," he added. He also said that Armenia would be prepared to assist Georgia if Russian gas was cut off (ref A). ¶5. (C) In regards to Iran, Markarian said that Armenia was "compelled to maintain good relations" because of the closed borders with Azerbaijan and Turkey. He added that "in the nuclear sphere, we are ready to provide any assistance (to U.S. efforts),but nothing depends on us." He mentioned the Armenia-Iran gas pipeline schedule to be completed later this year, and said "we are ready to import from Iran as much gas as we get from Russia." (NOTE: Currently about 30% of Armenia's electric power comes from units powered by Russian gas. END NOTE.) He even speculated that Armenia might one day serve as a transit country for Iranian gas heading to Europe. He recognized, however, that certain regional issues would have to be resolved first so that Armenian and American interests "do not collide." Bryza reminded Markarian that as a matter of both law (e.g., the Iran Libya Sanctions Act) and policy, the United States Government opposes major investments in Iran. -------------- - CONCERN ABOUT EXCLUSION FROM REGIONAL PROJECTS -------------- - ¶6. (C) The Prime Minister was concerned that Armenia was excluded from certain regional projects; he mentioned both the BTC pipeline and the proposed railroad connecting Azerbaijan, Georgia and Turkey (ref. C) which he said would "blockade" Armenia. He said that Georgia was being cautious about the proposal, but was under pressure from Turkey and Azerbaijan. Markarian called for more international involvement on this issue suggesting that the EU could pressure Turkey to give up the proposal as part of accession negotiations. Bryza said that the U.S. did not support the Kars-Akhalkalaki railroad. He said we saw a difference between the pipeline and the railroad and, while we supported the BTC because of the need to have multiple sources of energy for Europe, we favored a railroad that would link the entire region, including Armenia. Bryza added that while it might be possible to engage on the issue in the EU, it appeared that Azerbaijan was willing to finance the project on its own and was working hard to move it forward. -------------- COMMENT -------------- ¶7. (C) The Prime Minister was open and engaged during the hour-long meeting, a change from past practice. He was well versed on the issues and receptive to our suggestions. His candor was heartening and suggests that he may be more willing to work on advancing democratic reform and on other key issues than he has been in the past. ¶8. (U) DAS Bryza has cleared on this message. GODFREY