TFGG01: ARMENIAN CONCERNS GROW OVER LOOMING

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000660

SIPDIS

E.O. 12958: DECL: 08/19/2018
TAGS: ECON ELTN PREL EWWT ENRG EAGR RU GG TU IR AM
SUBJECT: TFGG01: ARMENIAN CONCERNS GROW OVER LOOMING
SHORTAGES OF FUEL, WHEAT

REF: A) YEREVAN 653 B) YEREVAN 649 C) YEREVAN 646

Classified By: CDA JOSEPH PENNINGTON FOR REASONS 1.4(B)(D)

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SUMMARY
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1. (C) FM Nalbandian complained to the Charge on the evening
of August 19 that there had been "no improvement" in cargo
deliveries from Georgia. Following the destruction of the
rail bridge at Kaspi,the GOAM sent 40 heavy trucks to the
port at Batumi to load fuel for delivery in Armenia.
According to Nalbandian, Georgian officials at the port have
so far refused to authorize Armenian trucks to load the fuel.
He expressed concern that the issue could become public, in
which case Armenia would be "forced" to issue a public
statement critical of Georgia. Meanwhile, the Armenian
Energy Minister is in Tehran, reportedly to negotiate a deal
for Armenian purchase of jet fuel from the Iranians.
Nalbandian asked whether the Turkish government had shown any
sign of willingness to open the border with Armenia as a
"one-time humanitarian gesture," and said he was considering
a call to FM Babacan to make such a request. End Summary.

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ARMENIAN TRUCKS WAITING IN BATUMI
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2. (C) Armenian Foreign Minister Nalbandian, appearing
visibly agitated (once again -- see ref a),called in the
Charge on the evening of August 19 to repeat his complaints
that Georgia is obstructing the delivery of critically needed
commodities to Armenia. The FM recounted that following the
destruction of the rail bridge at Kaspi, which effectively
severed rail cargo delivery from Georgian ports to Armenia,
the GOAM had dispatched 40 heavy trucks across bad roads
through southern Georgia to the port of Batumi to load badly
needed fuel. Nalbandian claimed that the trucks had been
"sitting empty for two days" at the port as Georgian
officials refused to authorize them to load the fuel. He
further claimed that Georgian port authorities had told
Armenian truckers to "go talk to the Russians" about their
concerns. When the Armenians contacted the Russians, they
were told that Russia had no personnel in Batumi and were not
involved in decisions made at the port.


3. (C) Nalbandian repeated his contention that the Georgian
authorities are deliberately squeezing Armenia's economic
lifeline through Georgia, despite what he described as
"positive" conversations in recent days between Georgian
President Saakashvili and President Sargsian. The FM
blustered that Armenia would "soon be making a public
statement" criticizing Georgia on the issue, and vowed to
raise Armenia's concerns in international fora. When CDA
suggested that such an approach would be counterproductive,
Nalbandian clarified that the GOAM is not seeking a public
confrontation with Georgia but would have to respond if such
a sensitive issue were to become public in Armenia. (Note:
The authorities have deliberately kept the Armenian public in
the dark about the possibility of shortages, adopting the
public line that deliveries through Georgia are flowing
normally. End Note.) CDA also urged Nalbandian not to
interpret every logisitical problem encountered in Georgia as
a deliberate slap against Armenia by the Georgian Government.


4. (C) Nalbandian added that although Armenia had strategic
reserves of the key commodities in question -- gasoline, jet
fuel, and wheat -- the GOAM had already dipped into those
reserves, a fact that would be increasingly difficult to
conceal from the public. Media reports and anecdotal evidence
from Mission personnel indicate that some filling stations
have once again instituted a system of informal gas
rationing, limiting purchases to 10 liters per customer.
There are also reports that authorities at Yerevan's
Zvartnots Airport are limiting the amount of jet fuel
available for incoming flights to 3 tons per aircraft, down
from the standard offering of 8 tons. Lufthansa has already
adjusted by refueling abroad to avoid running short in
Yerevan. Post's IMO Section has also learned that at least
one airline (Austrian) has stopped carrying cargo on its
regular passenger flights due to lack of sufficient fuel in
Yerevan.
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WHAT ABOUT TURKEY?
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5. (C) Nalbandian then asked whether the US had been given
any indication that the Turkish Government was considering

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opening the Turkish-Armenian border as a "one-time
humanitarian gesture" that could ease looming shortages of
fuel and wheat. He argued that such a gesture from the GOT
"could increase the positive momentum" on Turkey-Armenia
reconciliation by generating greater public sympathy for
Turkey. CDA said he was not sure whether a border opening
was under active discussion within the GOT, but promised to
pass the FM's suggestion to Embassy Ankara. Nalbandian said
he was even considering calling Foreign Minister Babacan to
make an informal request for Turkey's help, but was concerned
by the possibility that such a call would become public
knowledge. He added that it would be a "political disaster"
for the GOAM to be seen asking for Turkish assistance and
coming away empty-handed.

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HOW ABOUT IRAN?
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6. (C) The FM claimed that problems with Georgia are leaving
no alternative to Armenia other than dealing with Iran.
Nalbandian said the GOAM understood US concerns about
increasing trade with Iran, adding that Armenia would prefer
other options as well, but said Armenia would soon have
discussions with the Iranians about possible fuel deliveries.
We learned on the morning of August 20 that Armenian Energy
Minister Armen Movsesian is currently in Tehran for official
talks with his Iranian counterpart. According to press
reports, Movsesian is seeking a deal to secure deliveries of
jet fuel from Iran. Informal sources tell us that while
Movsesian's Tehran trip was inspired by the current crisis,
the focus of his talks was medium-term diversification of
Armenia's energy supplies rather than quick solutions to the
problems in Georgia.

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COMMENT
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7. (C) This meeting represents the third time in five days
that the Charge has been called in by a senior GOAM official
to hear about Armenia's economic concerns in light of the
Georgia-Russia conflict. Although we still do not believe
that dire shortages are imminent, Nalbandian's contemplated
outreach to Turkey, the Energy Minister's visit to Iran, and
fuel conservation measures in Yerevan all suggest that the
GOAM is really starting to feel the pinch. We will continue
to try to impress on the Armenians that the kinds of problems
they are encountering in Georgia are more likely the result
of the confusion inherent in what is for Georgia an
existential crisis rather than deliberate policy decisions by
the Georgian Government.
PENNINGTON