KOCHARIAN PLEDGES CONTINUED REFORM TO MCC'S

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000777

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/14/2017
TAGS: PREL PGOV EAID KDEM AM
SUBJECT: KOCHARIAN PLEDGES CONTINUED REFORM TO MCC'S
DANILOVICH

YEREVAN 00000777 001.2 OF 002


Classified By: CDA A.F.Godfrey for reason 1.4 (b,d)

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


1. (C) In a June 12 meeting with President Kocharian,
Millennium Challenge Corporation (MCC) CEO Ambassador John
Danilovich said that the good progress toward international
standards shown during Armenia's May 12 parliamentary
elections was good news for MCC and would certainly be
welcomed by MCC's Board of Directors. He pressed for further
progress on investigations of allegations of electoral
misconduct and for further legislative reforms when the new
parliament convenes. Kocharian welcomed MCC's acknowledgment
that elections were a step forward and thanked Danilovich for
Armenia's strong MCC program. He declared his commitment to
further reforms across the policy spectrum and pledged that
there would be "absolutely no problems" with implementation
of the MCC Compact. Kocharian said that there had already
been convictions for electoral fraud and that other
investigations were ongoing. End Summary.

Appreciation for MCC's Program
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2. (C) Amb. Danilovich's June 12 meeting with Kocharian was
the last official meeting during a productive four-day visit
to Armenia. With Danilovich was CDA, MCC Country Director
Alex Russin and MCC Senior Advisor Tim Docking. Kocharian
was accompanied by Senior Economic Advisor (and Millennium
Challenge Armenia Governing Council Vice-Chair) Vahram
Nercissiants and other key staff. Kocharian showed he was
well informed about the delegation's earlier meetings with
other officials and thanked Danilovich for his personal
engagement on the Armenia compact and for his passion to
ensure the MCC programs succeeded. Kocharian was at ease,
confident that the MCC compact with Armenia was on track and
genuinely interested in learning how he could better support
the implementation process.

MCC: Good News on Election, But Keep Pushing Reform
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3. (C) As he did in each of his official meetings (septel)
Amb. Danilovich explained prospects for the institutional
development of the MCC. Danilovich assured Kocharian that
the Corporation had strong bilateral support in Congress.
MCC had been watching the May 12 election with very close
interest, Danilovich said, and noted the general consensus of
the international community that it marked an important step
forward in Armenia's democratic development. It was very
important for MCC to be able to give the U.S. Congress and
the MCC Board a good report about Armenia, and "I am pleased
that I can give them good news," said Danilovich. Most
important now, he continued, was to follow through on
investigations and prosecutions of electoral wrongdoing and
to press forward the reform process. "We are able to
continue our commitment in Armenia as long as there is good
progress in the right direction," said Danilovich.


4. (C) Kocharian thanked Danilovich for his attention to the
Armenia program. Armenia's record on meeting benchmarks and
implementing international assistance programs was strong;
Armenia's World Bank programs continued to get top marks.
The MCC program was essential; Armenia's future depended on
development of rural infrastructure; the explosion of growth
in the capital was not sustainable and MCC's programs would
be an important counter to the internal migration trend --
begun by design during Soviet times -- to Yerevan.


5. (C) Kocharian said that Armenia's commitment to reforms
was unshakable; without energy resources, continued economic
growth depended on efficiency. He said that at an earlier
stage in Armenia's development, the incentive of qualifying
for foreign assistance was in some cases the Government's key
motive to reform, but that was no longer the case. "We are
carrying out these reforms not for MCC, but for ourselves,"
Kocharian said. He said that he believed one of the most
important recent achievements in Armenian society was that
there was "complete consensus among all of Armenia's elite"
that reforms, in all policy areas, should continue, yet
acknowledged that there was some healthy disagreement on what
shape these reforms should take.


6. (C) Kocharian was well-briefed on the status of
investigations into electoral misconduct and, when questioned
by CDA, was ready to explain in detail the status of one
district which faces a re-run of the election. He told
Danilovich that Armenia would continue to improve its
electoral performance in advance of Presidential elections
and said that "absolutely no problems" would interrupt the

YEREVAN 00000777 002.2 OF 002


implementation of the MCC Compact.


7. (U) Ambassador Danilovich did not have an opportunity to
clear on this telegram.
GODFREY