NA RATIFIES MCC COMPACT; AMBASSADOR DELIVERS

C O N F I D E N T I A L YEREVAN 000710

SIPDIS

DEPARTMENT FOR EUR/CARC AND EUR/ACE

E.O. 12958: DECL: 05/24/2016
TAGS: PREL PGOV AM
SUBJECT: NA RATIFIES MCC COMPACT; AMBASSADOR DELIVERS
DANILOVICH LETTER TO KOCHARIAN

REF: YEREVAN 560

Classified By: DCM A.F. Godfrey for reasons 1.4 (b,d).


1. (U) On May 24, the Armenian National Assembly ratified the
GOAM's Compact with the Millennium Challenge Corporation
(MCC) for USD 235.6 million. The vote was 77 to 0 in favor
with 4 abstentions. The Compact was signed in Washington on
March 27 by MCC Chief Executive Officer Ambassador John
Danilovich and Armenian Minister of Finance and Economy
Vartan Khachatrian.


2. (C) Also on May 24, Ambassador Evans formally delivered to
President Kocharian Danilovich's May 15 response to
Kocharian's request for clarification concerning the MCC
criteria. During the April 10-12 visit of Rep. Jim Kolbe,
Kocharian had requested more specific benchmarks which
Armenia must meet to maintain eligibility for MCC funding
(reftel).


3. (C) Danilovich's May 15 letter explained that the MCC
"indicators are drawn directly from the work of independent
international organizations; MCC neither influences or
modifies them." MCC highlighted certain "ruling justly"
indicators and the types of actions that the MCC believed
would signal Armenia's commitment to reform in those areas.


4. (C) Kocharian told the Ambassador that the GOAM was
preparing a response to the MCC letter and expressed his
frustration, as he has in the past, that the MCC evaluation
process relied on old data which did not reflect the current
situation. He particularly criticized the MCC's reliance on
a 2005 Freedom House Report which was based on data from

2004. (Note: We understand that representatives from
Freedom House are scheduled to meet with the Armenian
Ambassador in Washington on May 31 to better explain the
evaluation process. End Note.)
EVANS