PM SEES HIS U.S. TRIP AS FIRST STEP TO BETTER

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000907

SIPDIS

E.O. 12958: DECL: 11/11/2018
TAGS: PREL PGOV PHUM PINS KDEM AJ TU RU GG AM
SUBJECT: PM SEES HIS U.S. TRIP AS FIRST STEP TO BETTER
BILATERAL RELATIONSHIP

REF: A. YEREVAN 844

B. STATE 111916

YEREVAN 00000907 001.2 OF 002


Classified By: Amabassador Marie Yovanovitch. Reason 1.4 (B/D)

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


1. (C) Prime Minister Tigran Sargsian invited Ambassador to
lunch on October 31 to share his satisfaction with his trip
to the U.S. and his view that the trip served as a first step
to building a better bilateral relationship. He particularly
looks forward to improving Armenia's trade with the U.S. and
other partners, through GSP and other mechanisms. Sargsian
emphasized the importance of resuming funding for the MCC
roads projects and that Armenia was committed to moving
forward on negotiations with both Azerbaijan and Turkey. END
COMMENT.

-------------- --------------
PLEASED WITH U.S. TRIP: FIRST STEP TO BETTER RELATIONSHIP
-------------- --------------


2. (C) Prime Minister Tigran Sargsian invited Ambassador to
lunch on October 31 to review his recent trip to the U.S. He
pronounced himself completely happy with the trip to the
U.S., repeating many of the observations he had earlier made
to visiting Assistant Secretary Dan Fried (Ref A). Sargsian
said he believed the trip, and particularly his meeting with
Secretary Rice, would set the stage for a new and better
relationship, which he felt had been "frozen." He said that
he looked forward to follow-up on his meetings at the
Department of Commerce and USTR. He was grateful to hear
their offers to brief Armenian officials on better GSP
utilization and on the operation of U.S. "foreign trade
zones," and would soon send a technical team to the U.S to
follow-up. Armenia still had much to learn about how to
fully benefit from its WTO status and he hoped to learn about
other instruments that could stimulate free trade with
Armenia's trading partners.


3. (C) Sargsian said that the Department of Commerce had
raised the Western Union issue and he would soon send the
Embassy and Commerce an explanation of what happened. He
noted, that Moneygram, another American company was pleased
with the situation. The Ambassador said that it would be
useful to receive an explanation, because it appeared to the
USG that Armenia was violating the Bilateral Investment
Treaty. Even if this was not the case, barring American
firms from doing business in Armenia would not attract
further investment to the country. (NOTE: The Armenian
Central Bank revoked Western Union's license to operate in
Armenia in October. CBA officials have conceded privately
that this was done because Western Union had acceded to the
Azerbaijani Central Bank's demand that Western Union cease
business operations in the disputed territory of
Nagorno-Karabakh. Emboffs have raised this issue with the
CBA Chairman, and the Ambassador will do so again November 14
during her initial courtesy call with the CBA chairman. END
NOTE)

--------------
STEADY ON N-K AND TURKEY
--------------


4. (C) The Prime Minister said that he had raised both
negotiations on Nagorno-Karabakh and Turkey while in
Washington. He noted that public statements by the President
of Turkey in referring to the "occupied territories" of
Nagorno-Karabakh and by the Azeri Foreign Minister that
negotiations would be based on the UNGA resolution were not
helpful. "They're doing this to activate the diaspora," said
Sargsian, but Armenia would maintain its steady approach to
the two sets of negotiations. "We have to look forward, not
back, with regard to Turkey and Nagorno-Karabakh," he stated.
Sargsian added that only referring to territorial integrity
as the basis for a settlement in Nagorno-Karabkh is
"dangerous."

--------------
MCC: CRITICAL FOR THE COUNTRY
--------------


5. (C) Sargsian said that resuming Millenium Challenge
Account funding for the roads project was critical for
Armenia. He said he had discussed this issue with both
Secretary Rice and MCC CEO Danilovich and received generally
positive answers. The Ambassador responded that she, too,
was hopeful the funding would flow. She noted that MCC was a
performance-based program and hoped that the GOAM would take

YEREVAN 00000907 002.2 OF 002


action regarding those who have been detained and/or tried in
relation to the March 1 events. She noted that a political
solution, such as an amnesty, could not only heal the nation
and allow politics to move forward, but improve Armenia's
international reputation, as well. Sargsian said that the
President is interested in addressing the situation. He
noted, however, that allowing the detainees to go free would
set a bad precedent for the next election and encourage
others to behave badly.


6. (C) The Ambassador shared with Sargsian the latest
Millenium Challenge Account indicators (ref B) - to which he
responded jokingly that the Ambassador was trying to "spoil
his appetite." He poured over the indicators and said that
he was working on a letter to send to Ambassador Danilovich
regarding what Armenia has done recently to improve its
indicator performance. Sargsian said he is ready to have an
open dialogue with the U.S. on internal political issues,
including corruption, because Armenia must deal with these
issues to move forward. But more importantly, he said,
Armenia could not move forward without U.S. help.

--------------
IT'S TOUGH BEING THE PRIME MINISTER
--------------


7. (C) In response to the Ambassador's query regarding how
he liked his job and whether he could see any results yet,
the Prime Minister waxed on for over an hour. He admitted to
much frustration, noting that he gives orders and they are
not fulfilled. Over time, Sargsian has come to realize that
it's not that people won't do it, it's that they don't know
how. For example, very few know how to write a plan that
indicates what results are necessary. All the plans call for
"deepening, strengthening, and developing," but there are no
specific or quantifiable results, because the staff does not
really know what they want to accomplish. The most important
thing that he can do, he said, is to train people, and he
lamented that the best and the brightest of Armenia are
leaving the country.


8. (C) Sargsian said his job is to think, because he cannot
make something happen if he hasn't thought about it first.
That is why he spends a great deal of time reading - not just
economics, but sociology, history, psychology. He and
President Sargsian exchange books and he said that he had
recently shared with the President books by Tom Friedman and
Francis Fukoyama. The Prime Minister also recommended to
Ambassador a number of his own articles.

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


9. (C) As plate after plate of food was served, the Prime
Minister was clearly buoyed by his trip to the U.S., which he
views as a serious step forward in the bilateral
relationship. Sargsian did not press any particular point
(with the one exception of resuming the funding for MCC
roads),but rather sought to build on the momentum of his
trip.
YOVANOVITCH