VZCZCXYZ0011
RR RUEHWEB

DE RUEHYE #0753/01 2991234
ZNR UUUUU ZZH
R 261234Z OCT 09
FM AMEMBASSY YEREVAN
TO SECSTATE WASHDC 9661

UNCLAS YEREVAN 000753 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECON ETRD PGOV PHUM KDEM AM
SUBJECT: AMBASSADOR'S VISIT TO ARAGATSOTN MARZ ASSESSES 
USG-SPONSORED ASSISTANCE PROJECTS 
 
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SUMMARY 
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¶1. (SBU) NOT FOR DISTRIBUTION ON THE INTERNET.  HANDLE ACCORDINGLY. 
 
¶2. (SBU) Ambassador Yovanovitch's September 15 trip to Aragatsotn 
Marz, one of the nation's poorer regions, included visits to USG 
assistance project sites as well as meetings with Governor Sargis 
Sahakian, Ashtarak Mayor Gagik Tamazian, and representatives of the 
Yezidi minority (septel). The Ambassador also toured a winery in 
Oshakan village which has received USG business support assistance, 
met with computer class students in an Ashtarak school that 
benefitted from an Internet connectivity program, and visited a 
USAID-funded youth club in Aparan. END SUMMARY 
 
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Voskevaz Winery 
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¶3. (SBU) The trip began with a tour of the Voskevaz winery led by 
Executive Director Garush Samvelian. In 2007, USAID signed a $1.64 
million agreement with the European Bank for Reconstruction and 
Development (EBRD) in support of a three-year Business Advisory 
Services (BAS) Program to increase the number of small and medium 
enterprises in Armenia's rural and poor areas, and improving 
business productivity and profitability.  Mr. Samvelian told the 
Ambassador that the BAS program significantly improved the winery's 
operational effectiveness and efficiency, and enabled it to meet 
international standards to obtain Food Safety Management System 
certification, improving its competitive position. 
 
¶4. (SBU) The owner of the winery, Davit Hovhannisian, told the 
Ambassador of plans to redesign the small plant, which employs 10 
people, and of negotiations with a Russian company to install a 
fully automated production line to increase capacity from the 
current 120,000 bottles to 300,000 by 2010. 
 
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Ashtarak School No. 1 
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¶5. (SBU) At Ashtarak School No. 1, a spacious, modern facility 
renovated with the help of Armenian-American businessman Kirk 
Kirkorian, School Director Susanna Barseghian escorted the 
Ambassador to a computer class and an English-language class. The 
school was among the first participants in a five-year, 
$12-million-dollar Armenia School Connectivity Program (ASCP) funded 
by DOS and implemented by Project Harmony from 2000 to 2007. The 
program ultimately created a network of 330 secondary schools across 
Armenia, setting up an Internet Computer Center in each of the 
beneficiary schools. The program was transferred in 2007 to the 
National Center for Education Technologies (NCET), a branch of the 
Ministry of Education responsible for maintaining and monitoring the 
ICT equipment in the schools. 
 
¶6. (SBU) During the Ambassador's meeting with the 30 students in the 
computer class, which had 10 computers, one young boy said a great 
advantage of internet connectivity was that he could speak with his 
parents working abroad over a VOIP at the school or at one of the 
two Internet Cafes in the city. But a show of hands verified that 
few students had computers or internet at home, and Director 
Barseghian added that the Internet was often very slow. 
Interestingly, students get only one hour of computer lessons a week 
because, according to the Director, longer exposure to the radiation 
from computer screens could pose a health hazard. 
 
¶7. (SBU) The Director also noted that the computers originally 
donated to the school through Project Harmony in 2000-2001 were no 
longer operational. Since the ASCP project was turned over to the 
Ministry of Education in 2007, monitoring apparently has been 
sporadic, and it is possible that equipment is not being maintained. 
Even though the USG is no longer responsible for the project, the 
NCET has received Democracy Commission grants through the Public 
Affairs Section to do periodic checking; as of this writing PAS is 
checking to see when the last required maintenance was to be done. 
 
¶8. (SBU) In her remarks to the students, the Ambassador stressed the 
importance of computer literacy and noted that Armenia's economic 
future would depend significantly on IT and engineering. Because 
Armenia can be competitive in IT, she urged students to study 
technology in addition to their other courses. 
 
¶9. (SBU) The students in the English class offered well-rehearsed 
English-language presentations, though some seemed unable to answer 
simple spontaneous questions, suggesting that memorization and rote 
learning, a legacy of the Soviet era, may yet persist in even the 
most modern model schools. But it was encouraging to hear that while 
civics classes (originally introduced to Armenia through Junior 
Achievement, a USA grantee) now fall under a broader political 
science curriculum with more emphasis on history, students still get 
 
a basic grounding in human rights and civic responsibility. 
 
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Youth Action Committee in Aparan 
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¶10. (SBU) The Ambassador also visited a Youth Action Center (YAC) in 
Aparan funded through USAID's Youth and Community Action Program 
(YCAP), an inexpensive, cost-effective program that mobilizes youth 
at the grass-roots level to address key issues and problems in their 
communities. The 20 young activists of high school and university 
age delineated an impressive list of actions by the club, including 
environmental clean-ups, organizing computer classes, preparing a 
volunteer data base, and helping the elderly.  YCAP was inspired to 
provide information about assistance available to fight corruption 
after meeting with the local Advocacy and Assistance Center (AAC) 
run by USAID's Mobilizing Action Against Corruption program (MAAC), 
which provides legal assistance and refers cases to proper channels, 
a clear example of the synergies between USAID assistance programs. 
 
¶11. (SBU) The Ambassador was most impressed by the fact that 
community activists attending universities in Yerevan were using 
their training to organize an informal network to confront 
corruption at the university, challenging professors who take bribes 
for passing grades. In some cases professors would appoint a student 
to collect money from the others. One student said he refused to pay 
a bribe, but wasn't penalized by the professor because he was a top 
student. He noted that weaker students and parents routinely pay 
bribes to assure graduation, and that the aim of the informal 
anti-corruption network was to educate parents and shame professors, 
as well to gain fair and equitable wages for professors to 
discourage the need for bribery. 
 
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Meeting with Governor and Ashtarak Mayor 
---------------------------------------- 
 
¶12. (SBU) Governor Sargis Sahakian, who is the appointed regional 
head (by the central government), told the Ambassador that the 
intercommunity roads are in poor shape, partly because of the 
suspension of the MCC road project. (NOTE: The project was suspended 
after a government crackdown following the March 2008 presidential 
elections, and because of Armenia's failure to meet other governance 
targets.)  The Ambassador noted that other infrastructure projects 
benefitting from MCC financing continued, such as the refurbishment 
of water infrastructure projects and farmer training. 
 
¶13. (SBU) The Ambassador also asked what impact a possible opening 
of the border with Turkey would have on the region.  Mr. Sahakian 
affirmed that it would generally be a positive development that 
would encourage commerce and that the Marz is working on a four-year 
social and economic development plan that will factor in the 
possible opening of the border. He did add that some residents and 
officials worry about the flood of Turkish goods undermining 
Armenian products, to which the Ambassador countered that the same 
worries exist on the Turkish side. Mr. Sahakian said that the Marz 
needs to attract small companies to process wool and leather goods, 
that sheep-breeding was decreasing, at the Marz was looking at the 
potential for expanding tourism. 
 
¶14. (SBU) During a courtesy call on Ashtarak Mayor Gagik Tamazian, 
the Ambassador was informed that official unemployment in the region 
is 28 percent and that some 10,000 residents are living abroad, 
leaving the population of Ashtarak at about 24,000. He noted that 50 
percent of households rely on remittances from relatives abroad. 
Tamazian took the opportunity to praise USAID's Local Government 
Program III for providing a sanitation truck and waste disposal 
training which made the city much cleaner and earned positive 
feedback from citizens willing to pay a little more for effective 
service.  The mayor also said that he and most residents in the city 
see the opening of the border as inevitable and support the 
development. 
 
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Comment 
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¶15. (SBU) The Ambassador's trip highlighted the variety and benefits 
of USG-supported assistance programs. It also accentuated that much 
needs to be done in terms of business development, infrastructure 
rehabilitation, broader internet connectivity, and job creation in 
Armenia's third-poorest Marz. Moreover, the persistent problems of 
gasification, the dearth of drinking water and irrigation, and the 
outmigration of young and educated people pose profound challenges 
to attracting private investment and business to the region. End 
Comment. 
 
YOVANOVITCH