NEW ‘MILLENNIUM CHALLENGE’ OFFICE OPENS IN ARMENIA
By Karine Kalantarian

Radio Liberty, Czech Rep.
June 11 2007

The Millennium Challenge Account – Armenia (MCA-Armenia), a state
non-commercial organization established by the Armenian government
to oversee the implementation of a multimillion U.S. aid package,
opened its new office in Yerevan on Monday.

Ambassador John Danilovich, the Chief Executive Officer of the
U.S. Government’s Millennium Challenge Corporation (MCC) with which the
Government of Armenia signed a $236 million Compact in March 2006, and
Armenia’s Minister of Finance and Economy Vartan Khachatrian performed
a ribbon-cutting ceremony that was also attended by MCA-Armenia CEO Ara
Hovsepian and Resident Country Director for MCC Armenia Alex Rassin.

Danilovich said $6 million out of the funds earmarked for Armenia
as part of the five-year economic assistance package have already
been disbursed.

"The Compact is progressing. We have begun training farmers to
improve their profitability with the Water to Market Activity and
design of the first phase of the Rural Roads Rehabilitation Project
is nearing completion," Danilovich said at the event. "Additionally,
the early design phase of the Irrigated Agriculture Project is out
for competitive bids, with first construction expected to begin
this autumn."

The Compact, which was signed on March 27, 2006 and entered into
force later in September, aims at reducing rural poverty through a
sustainable increase in the economic performance of the agricultural
sector. Armenia plans to achieve this goal through a five-year program
of strategic investments in rural roads, irrigation infrastructure
and technical and financial assistance to improve the supply of water
and to support farmers and agribusinesses.

The provision of the multimillion funding had been largely linked
with a proper conduct of parliamentary elections in Armenia.

Danilovich said in this regard: "We welcomed the Armenian parliamentary
elections and congratulate the Armenian people on a more successful
poll than previous elections. It appears that this election was an
improvement toward international standards, but we continue to closely
watch the process of investigating allegations of irregularities."

He also said that as with all MCA countries, the MCC Board will make
a decision on Armenia’s continued eligibility at its annual selection
meeting in December.

Answering RFE/RL’s question, Minister Khachatrian clarified that
the sum Armenia has actually received so far is $5.5 million. "But
programs are in progress," he added.

He called it possible that some of the projects will remain unrealized
because of the fluctuations in the dram exchange rate to the dollar.

"The Corporation will not be adding anything," Khachatrian said,
but added that the government will take over and carry on where the
Corporation projects stop, including with "assistance from foreign
partners."

"Our ‘Lifeline Road Network’ is some 2,500 kilometers, of which only
some 900 are due to be rehabilitated under the Compact. It is clear
that we will do the rest," he emphasized.

According to the minister, the conditions for Armenia’s continued
eligibility for the assistance program remain the same.

"We have four categories, 16 indices, which are under constant
monitoring," Khachatrian said. "We’ve always had "green" evaluations
of three of the four categories, which deal with economy and social
issues. The only ‘red’ was with one index of the first category, called
"Fair Governance", where at least three out of six must be evaluated
‘red’ for the program to be put at risk."

In November 2006, the New York-based Freedom House urged the George
Bush administration to withhold promised economic assistance to
Armenia which it believed had failed to meet "reasonable standards"
for democracy and civil liberties. It charged the Armenian government
had been "backsliding on promised reforms" since signing the MCA
compact and accused it of ignoring U.S. calls to investigate serious
fraud reported during the nationwide referendum on constitutional
amendments held the previous year.

However, the Armenian minister believes that the latest legislative
elections in Armenia leave no room for "problems with the country’s
democracy and electoral processes".

"Our elections have been evaluated as good, free and fair from all
aspects," Khachatrian concluded.