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