VZCZCXRO4699
RR RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHYE #1717/01 3480603
ZNR UUUUU ZZH
R 140603Z DEC 06
FM AMEMBASSY YEREVAN
TO RUEHC/SECSTATE WASHDC 4570
INFO RUCNCIS/CIS COLLECTIVE
RUEHLMC/MILLENNIUM CHALLENGE CORP

UNCLAS SECTION 01 OF 02 YEREVAN 001717 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR EUR/PPD, EUR/CARC 
 
E.O. 12958; N/A 
TAGS: PGOV ECON OPRC AM KMDR KPAO
 
SUBJECT:  MCC INITIAL DISBURSEMENT RECEIVES WIDE-SPREAD PUBLICITY 
 
 
YEREVAN 00001717  001.2 OF 002 
 
 
Sensitive but unclassified, please protect accordingly. 
 
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SUMMARY 
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¶1. (U) On December 12, MCC, MCA-Armenia, and the U.S. Embassy held a 
press conference and reception to announce that Armenia had 
completed the requirements necessary to receive an Initial 
Disbursement of approximately USD 1.4 million of the Millennium 
Challenge Compact's USD 236 million.  The press conference received 
broad media coverage, with more than 30 journalists attending and 
every major television station reporting on the event.  Coverage 
focused on the details of the Compact, which aims at reducing rural 
poverty through investments in rural roads and irrigation 
infrastructure.  The lead story on practically all media outlets was 
about statements made by the CDA and MCC Country Director noting 
that Armenia's continued eligibility for the program depends on 
whether the 2007 parliamentary elections and 2008 presidential 
election are free and fair.  END SUMMARY. 
 
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PRESS EVENT AND RECEPTION GENERATE HIGHTENED INTEREST 
--------------------------------------------- -------- 
 
¶2. (U) The December 12 press conference announcing the Initial 
Disbursement took place at MCA-Armenia's new offices.  CDA opened 
the conference by congratulating the Armenian people and the GOAM on 
qualifying for the program, while emphasizing that in order for 
Armenia to continue to receive funding, it must maintain high levels 
in the indicator areas.  The MCA-Armenia director explained the 
details of the project, and the MCC country director noted that he 
looked forward to seeing how the program directly benefited the 
people of Armenia.  A member of the stakeholders committee and the 
director of the bank receiving the transfer of funds also made short 
remarks. 
 
¶3. (U) Later in the day, MCC and MCA-Armenia held a reception at the 
U.S. Embassy.  Approximately 100 government officials and NGO 
representatives attended, including Armenian Deputy Foreign Minister 
Arman Kirakossian. 
 
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MEDIA FOCUS ON POSSIBLE IMPACT OF ELECTIONS ON PROGRAM 
--------------------------------------------- --------- 
 
¶4. (U) Television stations, newspapers, and news agencies widely 
covered the details of the program, including its focus on 
decreasing rural poverty and its estimated direct impact on 75 
percent of the rural population.  Most outlets included quotes from 
CDA and MCC Country Director congratulating the Armenian people and 
government, as well as the MCA-Armenia Director's description of the 
program and its goals. 
 
¶5. (U) The majority of media outlets, including television stations 
(all of which are considered pro-government), reported that 
Armenia's continued eligibility for MCC funding is dependent upon 
Armenia holding free and fair elections in 2007 and 2008. 
Television stations broadly covered CDA's statement that, "Only by 
continuing to institute democratic reforms, including ensuring a 
free and fair process in the run-up to the 2007 and 2008 elections, 
can Armenia make sure that its people can continue to benefit from 
this USD 236 million program."  Armenia Liberty also focused on the 
upcoming elections, publishing an article entitled, "U.S. Aid to 
Armenia Linked with Clean Polls."  The article states, "The 
provision of USD 236 million in additional U.S. economic assistance 
to Armenia is conditioned on proper conduct of its forthcoming 
parliamentary and presidential elections, U.S. officials said on 
Tuesday."  The article also states, "Alex Russin, an MCC executive 
in charge of the compact's implementation, made it clear that next 
year's parliamentary elections will be a crucial test for the 
Armenian authorities' stated commitment to democracy and the rule of 
law." 
 
¶6. (U) Haykakan Zhamanak, a sensationalist opposition daily that 
often criticizes the U.S. Embassy, rebuked the USG for not being 
tough enough on Armenia, and specifically for not doing more to 
counter government control of the press.  The article quotes CDA as 
saying that the U.S. is concerned about freedom of the press, and 
then comments, "And what?  Nothing else?  They are concerned and 
that's it? ...In other words, the statement that the continuation of 
the program is conditional on progress in democracy is, to put it 
mildly, an exaggeration." 
 
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COMMENT 
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¶7. (SBU) The press conference and reception brought important 
 
YEREVAN 00001717  002.2 OF 002 
 
 
publicity to the Millennium Challenge program in Armenia.  The 
events allowed us to tell the Armenian people about the importance 
of the Compact, and helped us explain its expected impact and point 
out the large number of people that will directly benefit.  At the 
same time, we sent a message to GOAM and Armenian people that they 
will benefit from the program only if Armenia maintains high 
performance in the indicator areas, an important part of which is 
holding free and fair elections in 2007 and 2008.  We believe that 
increasing public interest in the project will create an additional 
incentive for the GOAM to uphold its commitment to continuing 
democratic reforms rather than risk losing funding.  To further our 
publicity of the MCC program, we have already made an agreement with 
Armenia TV, a private television station broadcast throughout the 
country, that each week it will air a short clip during its news 
program updating and informing the public about the Millennium 
Challenge Compact.  END COMMENT. 
 
GODFREY