C O N F I D E N T I A L SECTION 01 OF 03 YEREVAN 001241

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E.O. 12958: DECL: 10/12/2017
TAGS: PREL PGOV OVIP SERZH SARGSIAN KDEM AM
SUBJECT: SCENESETTER FOR PM SERZH SARGSIAN'S WASHINGTON
VISIT

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Classified By: CDA R.V. Perina, reasons 1.4 (b,d)

SUMMARY


1. (C) Prime Minister Serzh Sargsian's visit to Washington
October 17-23 is his chance to see and be seen with
Washington leaders in the run-up to his February 2008
presidential election bid. With his extensive defense and
security background, Sargsian now needs to show himself as a
world leader. He is still feeling his way on economic and
social policy issues, but is eager to embrace his expanded
role. Many observers are tempted into the easy cynicism that
presumes Sargsian will be a "more of the same" president:
shadowing Russian precedents on democratic (non)reforms, and
offering little room for real change to take root. We
believe such assumptions are premature. Sargsian's words to
date have offered hope that he may be more flexible,
reform-minded, and even visionary than President Kocharian,
especially on key issues such as Turkish relations and
getting to an NK settlement. He is also smart enough to
handle the current AGR debate in Washington with discretion
and not embarass any of his interlocutors with this issue.
END SUMMARY

SARGSIAN'S DEBUTANTE BALL


2. (C) Prime Minister Sargsian's visit to Washington (and
his stop in Paris immediately thereafter) represent his
"coming-out party" on the world stage. The transition time
between the May 2007 parliamentary and February 2008
presidential elections represent both an apprenticeship and
audition period for Sargsian, as he uses the prime
ministership both to learn the ropes of the civilian side of
government and to campaign for the presidency. Before
acceding to the prime ministership in April 2007 (some weeks
earlier than expected, after PM Markarian died March 25),
Sargsian's experience was almost entirely in the security

ministries. We are pleased with Sargsian's attentive
engagement with the Millennium Challenge program since he
took over as prime minister and ex officio chair of the
MCA-Armenia governing council. He has also worked hard to
get around to Armenia's various regions. As defense
minister, after deciding to intensify Armenia's NATO
relationship, Sargsian accelerated the IPAP reforms,
satisfying NATO officials with Armenia's rapid progress over
the last three years.


3. (C) Sargsian is not a deeply popular figure in Armenia,
nor is he a natural politician. He comes across to many
voters as colorless. His election to the presidency is
widely seen as inevitable, but like many "inevitable"
candidates in elections, his chief asset is the perception
that he is unstoppable. The lack of competitve opposition
alternatives bolsters this point. His support is based more
on the self-interest of Armenia's political and economic
elites than on much of anyone's abiding loyalty to him
personally. Sargsian's behavior seems aimed at shoring up as
much potential support for his presidential bid as possible.
His control of the powerful Republican Party political
machine, with its extenstive party cadres, infrastructure and
deep pockets, seems firm. Sargsian can best sell the
electorate on his candidacy with his defense credentials (in
a country where many feel surrounded by hostile neighbors),
and on his ability to continue the positive economic trends
of the past seven years.

MAKING THE PITCH ON ELECTIONS AND GOOD GOVERNANCE


4. (C) Sargsian says all the right things to us about his
desire to improve Armenia's performance on meeting
international election standards, tackling corruption, and
making sure Armenia makes the grade on MCC indicators. U.S.
interlocutors should reinforce our strong interest that the
presidential election be even better than the May 2007
parliamentary election. The latter was a step forward from
Armenia's past appalling election performance, but still
troublingly opaque. The process of vote tabulation and
reporting was not nearly as transparent as it should have
been. We should also make a strong pitch to Sargsian that
his own legitimacy will be at stake in February. Sargsian and

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the ruling party are convinced (accurately) that no matter
how well the elections are conducted, the opposition will
loudly proclaim fraud and seek to rally voters into the
streets in protest.


5. (C) MAKE THE OBSERVATION MISSION YOUR FRIEND: Our
argument is that the best source of legitimacy is a robust
OSCE/ODIHR election observation mission able to corroborate
Sargsian's victory. However, during this past May's
election, the government tightly restricted the number of
accredited U.S. Embassy election observers, and put pressure
on the OSCE/ODIHR mission, apparently trying to prevent any
negative news from being reported. We believe President
Kocharian was behind the rather paranoid tone the GOAM set
with the ODIHR observers, but we hope Sargsian will
understand that his self-interest lies in winning the OSCE's
good opinion, and that he can help set a different tone with
the observers for the February election.


6. (C) KEEPING THE PEACE: We are troubled by how many
opposition politicians seem focused more on post-election
rallies with which they hope to force the government to
resign than they are on the election itself. Ruling party
figures have also mentioned this worry. We should make the
point that law-abiding, peaceful demonstrations are a normal
part of a democracy, and the government must be careful to
manage these situations with restraint. Any use of
disproportionate force to disperse protesters would be a
serious black eye for Armenia.


7. (C) WHITHER THE MCC INDICATORS: MCC officials should offer
Sargsian and his team frank briefings on the implications of
the fact that Armenia has just graduated to a higher national
income bracket (GDP per capita), where the competition and
standards are stiffer. This will put many of its MCC FY08
indicators into the red. Armenia had all too little room for
error even in the previous category, as "Ruling Justly"
indicators already skated on thin ice. Senior State
officials can usefully renew the point that the presidential
election in February will be another key benchmark for MCC
eligibility.

MOVING TOWARD RECONCILIATION WITH TURKEY


8. (C) Encouraging Yerevan and Ankara toward reconciliation
is often fraught with frustration, as both sides often seem
all too anxious to back away. Armenian leaders remain
profoundly unconvinced of Turkish good faith, though Sargsian
has in recent months given us encouraging words about his
sincere desire to achieve normal relations with Turkey. If we
believe that the current mood in Ankara offers real
possibility of advancing Armenian-Turkish relations, we
should make this point strongly to Sargsian. His support
will be necessary (though perhaps not sufficient) to any
Armenian willingness to meet the Turks halfway in even first
steps.

THE VEXING "GENOCIDE" ISSUE -- NO ARMENIAN CAN STAND AGAINST
IT


9. (C) Sargsian has a pragmatic view and no wish to anger
either Washington or Ankara on the sensitive AGR issue. If
asked about the issue, however, as he is likely to be, he has
no option, politically, but to voice support for an AGR.
When the HFAC passed the resolution, Sargsian was quoted in
local papers saying "For every Armenian the issue of the
Armenian genocide is special, and we must be grateful to
those people working to promote it and those members of
Congress who voted for it." Sargsian is smart enough,
however, to handle this issue with discretion and
sensitivity, and not seek to embarass any interlocutor with
the issue.


ENHANCING THE IRAQ DEPLOYMENT


10. (C) DASD Cagan's recent visit (septel) sought to convince
the GOAM to double to about 100 soldiers its troop contingent
in Iraq. Sargsian understands that his full agreement to
this enhancement of forces will be sought and expected in

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Washington. Cagan made clear that the additional Armenian
troops would be trained and equipped by the United States out
of special coalition support funds, not deducted against
Armenia's FMF/IMET funding. Sargsian sees the value of
having Armenian troops train and operate alongside U.S. and
Allied forces, but remains wary of overstretch of Armenia's
small peacekeeping battalion, as well as of the political
risks in an election year that would accompany additional
Armenian casualties in Iraq.

IRAN


11. (C) Armenia's relationship with Iran has been a frequent
irritant in the U.S.-Armenia relationship. Armenia believes
fervently it has no choice but to have friendly relations and
economic ties with its southern neighbor, including the
recent construction of the (so far idle) Iran-Armenia natural
gas pipeline. The GOAM sees the latter as a strategic
necessity, to give Armenia an alternate source of energy in
the event that a Georgian-Russian crisis cuts off natural gas
shipments from the north. We have pointed out to the GOAM at
every opportunity that if Armenia helps Iran export its gas
onward to a third country this energy barter arrangement
would be transformed into a deal that could trigger U.S.
sanctions under the Iran Sanctions Act. We also repeatedly
make the point that in the current Iranian stand-off with the
UN and IAEA over its illicit nuclear program, this is no time
for "business as usual" between Armenia and Iran. We have
repeatedly cautioned the GOAM not to allow Armenia to become
a vehicle for Iranian propaganda efforts. Sargsian, who has
spoken positively of the Iranian relationship on a number of
occasions, will expect this issue to be raised in Washington,
and he will seek to defend Armenia's position.

SARGSIAN'S STYLE


12. (C) Sargsian keeps his own counsel and tends to be a man
of relatively few words -- a sharp contrast to the voluble
and emotive Kocharian. He is soft-spoken and seeks to avoid
confrontation. Sargsian's Washington visit may be a learning
experience for us all, as we see how he handles himself in
different contexts. We believe him to be a cool-headed,
rational, and methodical decision-maker, who can be persuaded
by clear-eyed appeals to Armenia's (or his own) best
interests.
PERINA