ANCA URGES KEY HOUSE AND SENATE PANELS TO SUPPORT CONTINUED ARMENIA-AZERBAIJAN MILITARY AID PARITY

ASBAREZ
2/15/2007

WASHINGTON–The Armenian National Committee of America Wednesday,
called on key Congressional foreign aid appropriators to maintain
current levels of US assistance to Armenia, expand the Nagorno
Karabakh humanitarian and developmental aid package, and keep in
place the agreement to ensure parity in US military assistance to
Armenia and Azerbaijan.

The ANCA’s roll-out of the Armenian American community’s foreign aid
priorities comes in the wake of the Administration’s recent release
of its fiscal year (FY) 2008 proposed budget request. The President’s
request would reduce US assistance to Armenia from $75 million to
$35 million, breaks military assistance parity between Armenia and
Azerbaijan, and makes no specific mention of US assistance levels
for Nagorno Karabakh.

In February 13 letters to each of the members of the House and Senate
State-Foreign Operations Subcommittee members, ANCA Executive Director
Aram Hamparian highlighted Armenia’s growing relationship with the
United States: "We are, of course, very proud that Armenia has been a
good friend to America, providing strong and consistent support to the
global war on terror, taking part in the NATO Partnership for Peace,
and contributing forces to Operation Iraqi Freedom, as well as for
peacekeeping operations in Kosovo."

The ANCA argued for maintaining US economic assistance to Armenia
at least at the current level of $75 million, noting that "in great
measure as a result of reforms supported by US economic development
programs, Armenia’s economy has grown by more than 10 percent in each
of the past six years, more than doubling the size of Armenia’s Gross
National Product. Sadly, however, the people of Armenia are still
faced with the devastating impact of Turkey and Azerbaijan’s illegal
dual blockaded–estimated by the World Bank as costing Armenia at
least $720 million on an annual basis."

In urging a shift in US aid to Nagorno Karabakh from humanitarian
to developmental programs, Hamparian stressed that this expansion
"would reflect our success in leveraging local efforts to dramatically
reduce Nagorno Karabakh’s once-daunting humanitarian challenges. The
time has come to support Nagorno Karabakh’s young democracy and its
efforts to expand its free market economy by funding programs aimed
at supporting democratic governance, encouraging sustainable economic
development, and creating conditions conducive to greater stability
and lasting peace in this strategically important region."

Citing the agreement struck between the Congress and the Administration
in 2001 to maintain US military aid parity to Armenia and Azerbaijan,
Hamparian argued that any retreat from this principle would
"destabilize the region and embolden the Azerbaijani leadership to act
on their threats to impose a military solution to the Nagorno Karabakh
conflict." He added that, "more broadly, the ANCA has underscored
that breaching the parity agreement would reward the leadership of
Azerbaijan for obstructing the peace process, while at the same time
undermining the role of the US as an impartial mediator of the Nagorno
Karabakh conflict."

Finally, Hamparian urged support for a $200,000 allocation for the
California-Armenia Trade Office, dedicated to strengthening American
company trade with Armenia and surrounding countries. He noted that,
"this modest commitment of resources will expand US access to foreign
markets and trade and help keep these countries economically viable and
independent. California, which boasts the largest Armenian population
outside of Armenia, almost 1,000,000 strong, is the natural partner
here in the United States to serve as the foundation for this important
relationship."

The complete text of the ANCA letter to the House and Senate
Appropriations Subcommittees on State-Foreign Operations is provided
below.

Text of ANCA letter to the House and Senate Appropriations
Subcommittees on State-Foreign Operations

February 13, 2007

The Honorable Nita Lowey

Chairwoman

State-Foreign Operations Subcommittee

Committee on Appropriations

US House of Representative

Washington, DC 20515

Dear Chairwoman Lowey:

I am writing to you, after having reviewed the President’s recently
released Fiscal Year 2008 budget request, to share the Armenian
American community’s views on several provisions that will likely
be addressed as part of your panel’s consideration of the FY 2008
State-Foreign Operations bill.

Before touching on these specific points, I would like to express
once again our community’s profound appreciation for the role that
you and this Subcommittee have played in strengthening the special
relationship between the United States and Armenia, and reinforcing the
enduring bonds that have long existed between the American and Armenian
peoples. Armenian Americans deeply appreciate America’s helping hand,
both as a reflection and a practical expression of the commitment of
the United States to Armenia’s independence, security, and prosperity.

We are, of course, very proud that Armenia has been a good friend
to America, providing strong and consistent support to the global
war on terror, taking part in the NATO Partnership for Peace,
and contributing forces to Operation Iraqi Freedom, as well as for
peacekeeping operations in Kosovo.

Our specific concerns are outlined below:

1. Parity in military aid to Armenia and Azerbaijan:

We call for the appropriation of equal levels of military assistance
to Armenia and Azerbaijan, in accord with the agreement struck between
the White House and the Congress during deliberations, in late 2001,
over the conditional waiver of Section 907 of the FREEDOM Support Act.

This agreement was struck between the White House and Congress in
2001, during deliberations over granting the President the authority
to waive the Section 907 restrictions on aid to Azerbaijan. The
Armenian American community has vigorously defended this principle,
stressing that a tilt in military spending toward Azerbaijan would
destabilize the region and embolden the Azerbaijani leadership to act
on their threats to impose a military solution to the Nagorno Karabakh
conflict. More broadly, the ANCA has underscored that breaching
the parity agreement would reward the leadership of Azerbaijan for
obstructing the peace process, while at the same time undermining
the role of the US as an impartial mediator of the Nagorno Karabakh
conflict.

In a clear breach of this agreement, the Administration, in its FY
2008 budget proposal, has called for breaking parity, in Azerbaijan’s
favor, in both Foreign Military Financing (FMF) and International
Military Education and Training (IMET). We ask the panel to reject
this ill-advised proposal by restoring military aid parity.

In addition, we encourage the panel to carefully monitor all military
aid provided to Armenia and Azerbaijan, including the Caspian Guard
Program, Nonproliferation, Antiterrorism, De-mining and Related
Assistance, and other military-related programs, to ensure that both
the principle and practice of military aid parity is maintained
in all spheres. Each dollar in US military assistance–either
specifically appropriated or provided at the discretion of the
Administration–should be matched with a dollar of military aid
to Armenia.

2. Economic Assistance to Armenia:

We urge you to include language requiring no less than $75 million
in direct US economic assistance to Armenia in FY 2008.

Since Armenia’s independence in 1991, US assistance has played a vital
role in meeting humanitarian needs, fostering democratic reforms,
and building self-sustaining economic growth.

Today, with the help of the United States, Armenia is a member
of the World Trade Organization, International Monetary Fund, and
World Bank, has signed bilateral agreements with the United States
on trade relations, investments, and the protection of investments,
holds regular Economic Task Force meetings on US-Armenia economic
cooperation, and – in 2005 – was granted Permanent Normal Trade
Relations status.

The Wall Street Journal-Heritage Foundation 2007 Index of Economic
Freedom ranked Armenia as the 32nd freest economy in the world,
based on a study that covered 10 broad factors of economic freedom,
including property rights protection, regulatory environment,
tax rates, fiscal policy, government intervention in the economy,
monetary policy, black markets, and trade policy.

In great measure as a result of reforms supported by US economic
development programs, Armenia’s economy has grown by more than 10
percent in each of the past six years, more than doubling the size
of Armenia’s Gross National Product. Sadly, however, the people of
Armenia are still faced with the devastating impact of Turkey and
Azerbaijan’s illegal dual blockades – estimated by the World Bank as
costing Armenia at least $720 million on an annual basis.

The Armenian American community is, of course, tremendously encouraged
by Armenia’s participation in the Millennium Challenge Account,
the new and innovative merit-based foreign aid program. We wish to
be clear, however, that this program does not serve as a substitute
for assistance provided by the Congress under the FREEDOM Support
Act. In fact, the Administration made clear to Congress when the
MCA program was initiated that it would very explicitly not be a
substitute for normal foreign aid but would rather serve to augment
it. In this case, the MCA is specifically designed to help alleviate
poverty through the strengthening of Armenia’s rural infrastructure,
primarily in the areas of roads and irrigation. The FSA, by contrast,
provides concrete and vitally needed assistance for key reforms in
democratic governance, health care, social protection, and education.

3. US Assistance to Nagorno Karabakh:

We encourage the panel to allocate no less than $10 million in its FY
2008 bill for programs in Nagorno Karabakh, and to gradually retarget
this aid package from humanitarian to development assistance.

For the past decade, the US Congress has played a unique and vital
role in providing direct aid to meet pressing humanitarian needs in
Nagorno Karabakh, helping its people to rebuild their lives after
years of devastating Azerbaijani aggression. The expansion of our
efforts to include development aid would reflect our success in
leveraging local efforts to dramatically reduce Nagorno Karabakh’s
once-daunting humanitarian challenges. The time has come to support
Nagorno Karabakh’s young democracy and its efforts to expand its free
market economy by funding programs aimed at supporting democratic
governance, encouraging sustainable economic development, and creating
conditions conducive to greater stability and lasting peace in this
strategically important region.

For this crucial transition to begin, Congress needs to clearly specify
in its FY 2008 State-Foreign Operations bill that US assistance for
programs in Nagorno Karabakh must include development programs.

4. Section 907 of the FREEDOM Support Act:

We ask the panel to keep Section 907 of the FREEDOM Support Act
in place and to ensure strict compliance by the Administration of
the conditional authority it has been granted by Congress to waive
this law.

5. California-Armenia Trade Office:

We urge the panel to appropriate $200,000 to allow the
California-Armenia Trade Office to expand its operations to assist
business communities in California as well as other US states.

Currently, this office, the only official American trade representation
in the Republic of Armenia, is operated by the Foundation for Economic
Development, a California not-for-profit corporation that has been
contracted by the State of California to

handle its operations. CATO began operations in October of 2005 under
the auspices of the California Business, Transportation and Housing
Agency, but is funded entirely through privately raised donations.

Though located in Armenia, it serves a much larger region, covering
the Newly Independent States and the countries of Eastern Europe and
Western Asia. The mission of the Trade Office is to assist California
companies increase their exports to Armenia and the surrounding region,
as well as to help companies from the region to build commercial and
investment relationships with businesses in California.

This modest commitment of resources will expand US access to foreign
markets and trade and help keep these countries economically viable and
independent. California, which boasts the largest Armenian population
outside of Armenia, almost 1,000,000 strong, is the natural partner
here in the United States to serve as the foundation for this important
relationship.

In closing, please know that the ANCA respects and values your
friendship and the Subcommittee’s long-standing leadership on issues
of concern to the Armenian American community. Your attention to
the important matters outlined in this correspondence is greatly
appreciated.

We would, of course, welcome the opportunity to meet with you to
discuss these matters in greater detail.

Sincerely,

[signed]

Aram S. Hamparian

Executive Direct