AMBASSADOR YOVANOVITCH PAYS COURTESY CALL ON

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 001032 SIPDIS E.O. 12958: DECL: 12/22/2018 TAGS: PREL PGOV ECON PHUM SENV KDEM AM SUBJECT: AMBASSADOR YOVANOVITCH PAYS COURTESY CALL ON YEREVAN MAYOR YEREVAN 00001032 001.2 OF 002 Classified By: AMB Marie L. Yovanovtich, reasons 1.4 (b,d). SUMMARY -------------- ¶1. (SBU) Ambassador Yovanovitch paid a courtesy call December 3 on Yerevan Mayor Yervand Zakharyan at City Hall. The Mayor described his administration's accomplishments and plans for the city of Yerevan, particularly in alleviating traffic congestion and in maintaining the city's economic stability. The Ambassador informed that as a resident of Yerevan, she welcomed the improvements. The Ambassador questioned the mayor about draft legislation which will lead (at Council of Europe behest) to an elected Yerevan mayor, replacing the current system in which the president appoints the capital city's mayor. The plan, however, is to create an indirect election process that will actually be a step backward for democratic governance, and abolishes the current direct elections of district/community heads. End Summary. CITY IMPROVEMENT PROJECTS -------------- ¶2. (SBU) The Mayor described for the Ambassador the accomplishments and priorities of his administration, beginning with a newly opened north-south highway through the city that shoould help alleviate congestion from the dramatically increased number of vehicles on the streets. Plans to relocate some businesses and offices from the city center into other areas should also reduce traffic congestion. At the same time, the city is actively engaged in urban renovation projects that are replacing old, dilapidated buildings with modern new residential and commercial facilities. This was set out in the city development plan prepared in 2005, and will run through 2020. (Note: Many Yerevantsi consider this not an improvement, but a travesty, as Yerevan's distinctive 19th century buildings are being demolished wholesale to make way for more lucrative, mid-rise modern office and residential towers. The city also has faced numerous court challenges -- including to the ECHR -- over the meager compensation paid to displaced property owners as part of the eminent domain proceedings. End Note.) ¶3. (SBU) The mayor also asked for U.S. help with a clean-up of Lake Yerevan, the artificial lake adjacent to the New Embassy Compound. The Mayor asked for the Embassy's help in attracting financial assistance from international organizations for this effort. While the Ambassador applauded the plan, she made no commitment in that regard. (Note: The Municipality has made this request several times in the pastWhen we looked into the issue, we were informed by an environmental engineer that it is a terrible idea. The lakebed is polluted with highly-toxic heavy metals, which our expert advised us are relatively stable and comparatively harmless if left undisturbed. Any attempt to remove them from the lake silt, however, would be 1) very costly, and 2) most likely counter-productive, sending much of the pollutants downstream where they will do additional damage. We sent a copy of this report to the mayor's office when first produced. End Note.) YEREVAN'S ECONOMIC STABILITY -------------- ¶4. (SBU) Mayor Zakharyan attributed the myriad construction projects around Yerevan in recent years to sustainable economic development in Armenia, and opined that development would continue. He suggested Yerevan would be able to avoid the negative impact of the current global financial crisis by maintaining the current level of investment in order to provide job opportunities and thereby increase revenues through taxes and social payment contributions. Questioned, the Mayor later clarified that he hadn't meant that Yerevan had not been affected. Construction projects and investments are down, and the city will have to do more to attract investment. This means establishing conditions favorable for investing and cooperating with potential investors. "Without investment," he said, "all the other activities are doomed to failure." ¶5. (SBU) The Ambassador agreed with him, pointing out that the U.S. has many programs to help Armenia that are important to Armenia's development. She went on to stress the importance of creating a level playing field for all investors, domestic or foreign, irrespective of political connections. Situations such as that of Western Union, which was recently asked to close its operation in Armenia, are noted by other investors and serve as a disincentive to further investment. YEREVAN 00001032 002.2 OF 002 DEFINE "DEMOCRACY" -------------- ¶6. (SBU) The conversation turned to upcoming changes in the process for selecting the mayor of Yerevan, which will take place in 2009. The Mayor said that draft legislation on the Yerevan election is awaiting its second reading in the National Assembly, and likely will be addressed later in December. He went on to explain that under the proposed system, the mayor still would not be directly elected by the residents of Yerevan, but by the 65 members of the City Council (from among their own number) which the new law would establish. Those Council Members would be elected by Yerevan residents under a proportional representation system. If one party fielding candidates for the Council received 40 percent or more of the vote, the candidate topping that party's slate automatically would become mayor. ¶7. (SBU) The Mayor went on to say that under the new system the district/community mayors (or prefects),presently directly elected by residents of those neighborhoods, would be appointed by the Mayor of Yerevan. Popularly elected communitycouncils would cease to exist. Greater Yerevan would be regarded as a single community, governed by a City Council elected to a four-year term of office and presided over by a mayor chosen by themselves from among themselves. District mayors would be appointed, with duties delegated by the mayor and Council. ¶8. (SBU) The Mayor disagreed with the Ambassador's statement that this was a move away from democratic elections, saying that from 1995 to the present, the mayor had not been elected, but the current system had not been effective. He claimed the proposed change had been discussed with the Council of Europe (CoE) and had been developed after studying best practices, implying that the CoE had given its seal of approval to this somewhat misleading experiment in democracy. (Note: We have previously learned that the CoE Venice Commission has indeed commented on the Armenian draft legislation, and judged the indirect election proposal unusual but in principle in keeping with minimum European standards and commitments and not without precedent. End Note.) COMMENT -------------- ¶9. (C) Obligated by European commitments to abolish the appointed mayorship of the capital city -- which is home to over a third of Armenian citizens -- the GOAM has devised the most attenuated model it could come up with for electing the mayor, while at the same time eliminating even the polite fiction that the constituent local administration district governments are chosen by direct election. Local political observers take it as a given that authorities will cheat in the 2009 Yerevan elections to ensure they do not lose control of the capital, since the authorities see Yerevan, with half the country,s population, as a center of gravity they cannot afford to lose. That outcome would not only be seen as a humiliating rebuke to the government, it would also have higher stakes now that the law puts the mayor in charge of permitting (or, much more often in 2008, banning) political rallies. Having one big election to decide the fate of the whole city government will be a more high-profile event, perhaps galvanizing more public and international interest and closer attention than the continual, year-round dribble of elections to small district governments. This may, on one hand, make the Yerevan municipal election harder to steal covertly. However, election cheating could also create another political flashpoint leading to potential instability, as Yerevan is the opposition's strongest base of support. Fear of that possibility, perversely, probably makes it all the more likely that the GOAM will leave nothing to chance, but will deploy a multi-layered program of suppression, fraud, bribery, and other chicanery to prevent any chance of election day surprises. YOVANOVITCH