CHARM OFFENSIVE OR EARLY SIGNS OF MUCH-NEEDED REFORM?

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000347

SIPDIS

SIPDIS

DEPT FOR EUR/CARC

E.O. 12958: DECL: 04/21/2018
TAGS: PGOV PREL PHUM KDEM AM
SUBJECT: CHARM OFFENSIVE OR EARLY SIGNS OF MUCH-NEEDED REFORM?

Classified By: Charge d'Affaires Joseph Pennington, reasons 1.4 (b/d)

--------------
SUMMARY
--------------


1. (C) Several positive notes give reason for hope that the
new administration is preparing a reform agenda. President
Serzh Sargsian held a nationally televised meeting with top
Customs officials, in which he ferociously interrogated top
agency leaders -- having already fired the Customs chief --
over corruption, inefficiency, and hindering Armenia's
economic development. Government insiders have strongly
foreshadowed to us that Customs will be an early target for
overhaul. Prime Minister Tigran Sargsian also went on the
offensive in one of his first cabinet sessions, directing
ministers to make their work more transparent and accessible
to the public. The authorities also allowed an opposition
group to hold the first rally since Sargsian's swearing-in on
April 19 (interestingly, two months to the day since the
flawed and contested election). The gathering attracted
4,000-5,000. END SUMMARY.

--------------
PRESIDENT SARGSIAN BERATES CUSTOMS OFFICIALS
--------------


2. (SBU) During his televised April 17 meeting with the
leadership of Armenia's State Customs Committee, Armenia's
newly inaugurated president Serzh Sargsian, perhaps taking a
page out of Russian president Vladimir Putin's playbook,
scathingly accused customs officials of corruption and
threatened to fire those who fail "to work honestly."
Sargsian said the solving of Armenia's social problems
depended on the collection of taxes and customs revenues, and
said the government must "follow the path of self-cleansing."
He accused officials present at the meeting of being
complicit in corruption, both allowing it to happen and
benefiting from it. He struck an anguished tone that
corruption was hampering the country's economic development
by taking the hardest toll on Armenia's small and
medium-sized enterprises. The president's remarks followed
the April 15 firing of SCC Director Armen Avetisian, widely
considered a Sargsian Confidant.. President Kocharian has
been known in the past to have similar televised meetings in
which he pointedly criticized the Customs agency, but
Sargsian's performance was conspicuously sharper than what
Kocharian had previously done.

--------------
MEDIA QUESTIONS SARGSIAN'S SINCERITY
--------------


3. (SBU) While state-controlled television aired the
president's Customs meeting repeatedly without editorial
comment, Armenia's opposition media reacted by questioning
the gesture's sincerity. The pro-opposition Haykakan
Zhamanak (Armenian Times) said April 18 that viewers had the
impression the President were acting as if he didn't know
about corruption before he became president. The independent
on-line news site lragir.am wrote in its editorial "The King
and the Customs Officers" that abuses of the customs system
would not exist "if the highest levels of government had
displayed political will" to prevent them. The
pro-opposition 168 Zham (168 Hours) daily acerbically noted
there are more effective ways to police customs officials,
such as questioning them about their purchases of expensive
Hummer SUVs, noting that such cars should be well beyond any
Customs officer's salary. Predicting that the authorities
would take no serious steps to combat corruption at the SCC,
168 Zham declared instead that all it expected was similar
"illusions" from authorities in the future.

--------------
REACHING OUT TO CIVIL SOCIETY
--------------


4. (C) During his April 16-17 visit to Gyumri, Armenia's
second largest city, the CDA spoke with a prominent
entrepreneur and self-declared oppositionist who says
Sargsian is reaching out to improve his public image. Artush
Mkrtchian, a dairy distributor, said he along with prominent
Armenian intellectuals had participated in two meetings with
Sargsian since the beginning of April, and they are scheduled
to meet again with Sargsian at the end of the month.
Mkrtchian said that President Sargsian appeared genuinely
interested in people's opinions of the elections and the
popular mood on the street, and sought their honest feedback.
An actor present at the meetings who voted for Sargsian told
the new president that his vote had resulted in people
publicly jeering him. Mkrtchian also told the Charge that
Sargsian has created an informal group of prominent citizens
to elaborate a national ideology with which ordinary citizens
can identify.

--------------
PM TO MINISTERS: OPEN UP!
--------------


5. (SBU) The new Prime Minister Tigran Sargsian (no relation
to the president) directed ministers at one of his first
cabinet sessions with them to make their work more
transparent and accessible to the Armenian public. Arguing
that government decisions should become a subject of public
discussion, PM Sargsian ordered that government programs be
posted on websites. He said "the public should have an
opportunity to participate in the development of draft
proposals" as well as discussions of the drafts as they make
their way through the approval process. Flouting his
man-of-the-times technocrat credentials, PM Sargsian also
promised live on-line broadcasting of cabinet meetings, and
that journalists would soon have computer access at
parliament for reporting on government affairs. He also
lamented that government staff do not know how to use
computers, but said people should not be ashamed to learn.
He drove the point home by declaring "reforms are impossible
without learning."

-------------- --------------
OPPOSITION GROUP HOLDS FIRST POST-INAUGURATION PROTEST
-------------- --------------


6. (SBU) On Saturday, April 19, 4,000-5,000 opposition
supporters assembled at a downtown park in the first
opposition rally allowed by the authorities since President
Sargsian's April 9 inauguration. The two-hour-long rally at
Yerevan's family-oriented "Children's Park" -- located
directly across the street from Yerevan's city hall that was
the scene of violent clashes on March 1-2 -- proceeded
peacefully, in spite of organizers' unsuccessful pleas for an
extra half hour of electricity at the end. LTP did not
participate in the rally, but his wife Lyudmila did.
Supporters chanted "Levon for President," and "Struggle to
the End!" Several wives of opposition leaders detained after
the clashes also spoke. The AmCit spouse of jailed LTP
campaign manager Alexander Arzumanian quoted for the crowd
comments made at the U.S. Helsinki Commission hearing on
Armenia April 17. The wife of the fugitive LTP ally and
Haykakan Zhamanak newspaper editor Nikol Pashinian also
addressed the crowd. Member of parliament Suren Sureniants
made his first public appearance after being released from
jail April 17 (pending trial). Police presence was heavy.
When protesters at the end of the rally staged a spontaneous
march and tried to enter Freedom Square, police blocked
them.

--------------
COMMENT
--------------


7. (C) We welcome the fact that the two Sargsians are using
their initial forays to signal commitments to combating
corruption and making government transparent. These are two
areas where drastic action is long overdue. The president's
quiet outreach to opposition civil society leaders is, if as
reported to us, an interesting and encouraging sign that
Sargsian may be trying to reach outside of his normal
information bubble. As the media response indicates, however,
it will take more than words to convince Armenia's jaded
public that things will be different this time around. The
fact that the new president uncharacteristically stuck his
neck out at least puts him on the line to deliver. We are
eager to see if these baby steps presage more sweeping
reforms or are merely window dressing. END COMMENT.

PENNINGTON