SCENESETTER FOR FM NALBANDIAN'S MEETING WITH

S E C R E T SECTION 01 OF 03 YEREVAN 000288 NOFORN SIPDIS FOR THE SECRETARY FROM AMBASSADOR E.O. 12958: DECL: 04/29/2019 TAGS: PREL PGOV PHUM EAID KDEM AM SUBJECT: SCENESETTER FOR FM NALBANDIAN'S MEETING WITH SECRETARY CLINTON YEREVAN 00000288 001.2 OF 003 Classified By: AMB. Marie L. Yovanovitch, reasons 1.4 (b,d) ¶1. (S/NF) SUMMARY: Your meeting is an opportunity to offer balanced encouragement and cautions to the Armenian government: encouragement for its moves on Turkey and Nagorno-Karabakh (NK),cautions about continuing failings on democracy and human rights, as well as export control. President Sargsian and FM Nalbandian are taking tough, politically perilous steps in reaching out to Turkey and continuing to make headway on NK talks. Armenians want reassurance that the U.S. Government will stick with the Turkey process, including public support by senior USG officials, and will hold Turkey to its commitments. Nalbandian speaks frequently about -- and will likely push you for -- a "bigger" relationship with the U.S.. What the Minister means by this is only vaguely defined, but his immediate priority is on symbolic gestures such as high-level visits, an area in which the Armenians often feel shortchanged in comparison with neighboring Georgia and Azerbaijan. On democracy, we should rebut the perception that the United States will turn a blind eye to all Armenia's domestic political failings so long as we get what we want from them on regional issues. Our Iran export control discussions are well launched, but could use reinforcement from you. Finally, Armenia needs recognition and encouragement on its defense reform progress, and its contribution in Iraq, Kosovo, and soon in Afghanistan. END SUMMARY TURKEY: IT'S A MATTER OF TRUST -------------- ¶2. (C) CONVINCING THE GOAM: Getting past the first hurdle on Turkey-Armenia reconciliation -- the public joint Armenian-Turkish-Swiss communique -- makes the current process already the most successful Turkish-Armenian rapprochement effort to date. However, there remains much work to be done, and great mistrust and misunderstanding between the two governments. Both sides underestimate and dismiss the real domestic political difficulties the other faces in closing a deal to normalize relations. Armenian leaders have a reservoir of accumulated mistrust of the Turks -- a legacy that has been eased but far from eliminated by President Sargsian's and FM Nalbandian's contacts with President Gul and FM Babacan. Armenians feel -- not entirely without basis -- that a number of times since Armenian independence, Turkey has launched insincere dialogues with Armenia as a tactic to escape American and European pressure or "genocide" recognition. Although the Armenians recognize that more progress has been made this time, they are seeking our help to ensure that the process does not drag out. President Sargsian recently told us that while he will give the Turks time to sort out their domestic issues, the window for normalization will not remain open indefinitely. ¶3. (C) THE POLITICAL PRICE: By agreeing to issue the joint statement with Turkey on the eve of Armenian Remembrance Day, Sargsian and Nalbandian knew they were inviting a political firestorm -- both domestically and in the diaspora -- for having "sold out" the Armenian nation on the genocide issue in exchange for vague promises from Ankara. The nationalist Dashnaks have walked out of Sargsian's ruling coaltion, and the opposition is threatening to base its upcoming local election campaign on Sargsian's alleged "treachery." Nalbandian will make the case -- with justification -- that the Armenians paid this price because we asked them to. They are now looking for signs that we will stand with them as they attempt to weather the storm. ¶4. (C) DELINKING TURKEY AND NK: Turkish leaders have said privately to the Armenians that they have separated Turkish-Armenian normalization from the NK settlement process, and are prepared to open the Turkish-Armenian border in advance of an NK deal. President Sargsian and FM Nalbandian are mostly convinced of this, but remain skittish over the risk they are being duped by the Turks, or that the GOT -- having already reaped the public relations benefits of Armenian reconciliation -- will lose its zeal for the project and perhaps renege altogether. Perhaps more significantly, Sargsian and Nalbandian have a serious task of political salesmanship in convincing a profoundly skeptical Armenian public and political establishment (at home and in the YEREVAN 00000288 002.2 OF 003 diaspora) that Turkey is negotiating in good faith and seriously intends to open the border, even in the absence of an NK settlement. Public statements and leaks in Ankara have not helped. We understand that Turkey desperately wants some kind of NK progress it can hold up as political cover, but the Armenians are equally worried that Turkey will allow Baku a veto over Turkish-Armenian normalization. ¶5. (C) VISIBLE U.S. SUPPORT IS KEY: Against this backdrop of Armenian distrust, President Sargsian is standing firm, and has told us he is determined to follow through with the GOT. He has made clear, however that visible support from senior USG officials at regular intervals is critical to his ability to withstand the critics. Your statement of support following the joint announcement on April 22 was very well received here, as were the series of phone calls between senior U.S. and Armenian officials. NAGORNO-KARABAKH: AGAIN, ALL ABOUT TRUST -------------- ¶6. (C) The core of the NK issue, for Armenians, is that they are asked to give up what they have -- lands they won in the war and hold militarily -- in exchange for the promise of greater peace and prosperity in the future. The Armenian public is wary of giving up any of these territories, which most Armenians think will only weaken their strategic position vis-a-vis Azerbaijan. Although the tone has improved lately, Armenians have often wondered aloud why Azerbaijan keeps up its drumbeat of bellicose rhetoric while the two sides negotiate peace, and what that rhetoric says about Azerbaijani intentions. Armenians are sensitive to the perceived risk that in the crunch, the U.S. will bring most pressure to bear on Armenia to give ground, because the U.S. and the West have more obvious equities in Azerbaijan and Turkey, and fewer geopolitical interests at stake in Armenia. Here again, a bit of cultivation and reassurance can go a long way in bringing Armenia along. DEMOCRACY, HUMAN RIGHTS, AND MCC -------------- ¶7. (C) USING THE MCC TOOL PROPERLY: We believe that progress on democracy and human rights need not and should not be held hostage to our peace-making agenda on regional security issues (Turkey and NK). We need to be consistent in our message. The worst case would be for the MCC Board to terminate the Armenian Compact outright in the near term, after a year of signaling tolerance. The second worst would be to impose no penalty at all, after repeatedly expressing our concerns about Armenia's failure to meet MCC's Ruling Justly criteria. The current MCC "operational hold" on the USD 60 million roads package has been just enough to preserve our credibility on the democracy and human rights agenda. Your meeting will be an opportunity to reinforce those concerns, which you recently expressed in your letter on this subject to President Sargsian. ¶8. (C) MAY 31 ELECTON: All indications are that the upcoming May 31 municipal elections in the capital city -- home to nearly half of all Armenian citizens -- will be deeply flawed. We base this on the fact that the ruling party has named a notoriously unpopular political fixer as its mayoral candidate, and then appointed him ("Black Gago" by sobriquet) to the mayorship on an interim basis, apparently so that he will have the full tools of city "administrative resources" at his disposal. We have already seen an uptick in violence against opposition organizers and journalists, and the government has rejected 11 applications for permits to hold outdoor campaign rallies. Reform-minded political contacts within the ruling coalition go awkwardly silent when we raise the May 31 election; they expect it to be problematic, and are embarassed to talk about it. We are using every chance to press both government and opposition that the process must be free and fair, and especially to avoid another outbreak of violence. It would be helpful if you could also mention these concerns in your meeting with the Foreign Minister. EXPORT CONTROL AND MILITARY COOPERATION -------------- YEREVAN 00000288 003.2 OF 003 ¶9. (S/NF) A GOOD START: Our inter-agency team had a productive round of talks April 29-30 to launch the implementation phase of the recently-signed Joint Action Plan (JAP) on export controls, an effort to remediate the 2003 illegal arms transfer to Iran. The JAP offers an opportunity for the Armenians to manage the fallout from that incident by forging a strong working partnership on export controls. It remains important to let the Armenians know that signing the JAP is only the beginning of the process, not the end, and that we have to see serious progress over the next six months in order to avoid possible U.S. sanctions. ¶10. (C) WESTERNIZING MILITARY AN OPPORTUNITY NOT TO MISS: Of all the work we do here to build and promote democratic institutions for the long term, we are perhaps most encouraged by reform according to the Euro-Atlantic model in the Ministry of Defense. The half-constructed Peacekeeping Brigade is the nucleus of Euro-Atlantic cooperation, and soldiers from the unit have proven to be good troops in Iraq and Kosovo. Now that their Iraq deployment is over, they have some excess manpower that they could contribute to Afghanistan or Kosovo. (In fact, we understand that the Armenian MOD is close to agreement on a joint deployment with the Germans in Afghanistan.) To continue this progress through our cooperation with MOD, we will need senior Armenian officials -- including Nalbandian -- to make clear to lower levels that cooperation on export control is a top priority. YOVANOVITCH