Sunday, January 11, 2009

MCC-Armenia; U.S.-Georgia charter; Russians in the Americas; OPEC-FSU oil production cut

First published in December 20 2008

Washington Briefing
by Emil Sanamyan

U.S. agency wants democratic reforms stepped up in Armenia

John Danilovich on December 12. Armenian Reporter photo.

The U.S. Millennium Challenge Corporation (MCC) "reiterated its concerns about the status of democratic governance" in Armenia, according to MCC's statement following its board meeting on December 11. Although Armenia has remained eligible for U.S. aid under the program's guidelines, the volume of assistance has been restricted throughout 2008 after the State Department blamed the government for post-election violence.

In all, MCC allocated $28 million to Armenia in the first two years of the five-year $235 million compact aimed at reducing rural poverty through the construction of roads and irrigation systems. According to MCC's Armenia office, cited by Regnum news agency, its first quarter 2009 expenses will be $7 million.

By contrast, in 2006-2008 the United States allocated $213 million of $295 million of the Georgia compact, which is now on track for completion by next September. Earlier this year, MCC allocated an additional $100 million to Georgia as part of a $1 billion U.S. aid package to Georgia promised by the Bush administration following the August war with Russia.

With a political transition underway in Washington, a new MCC board with members of the Obama administration will meet in March to pick a new chief executive officer and "again review Armenia's performance and examine continued collaboration with the country during its March meeting."

The MCC board is chaired by the Secretary of State and includes other cabinet members and nongovernmental representatives.

In his farewell briefing on December 12, MCC's outgoing CEO, Ambassador John Danilovich, hinted at unresolved issues with Armenia.

"We have a good working relationship with Armenia," he said in response to a question posed by the Armenian Reporter. But "the government of the newly elected president [Serge] Sargsian needs to reassess their commitments to democratic principles in light of some election matters which occurred at the time of the election now about nine months ago."

While Ambassador Danilovich sounded positive that funding for MCC's suspended road project "should resume in March" and he noted that "the [Armenian] government has embarked on a number of reform efforts," the MCC board members "very much want the government of Armenia to continue with and increase the speed with the substance of those reforms," both for continuation of the current program and "also for the eventual possibility of future engagement with MCC" with a second compact.

U.S. developing security pact with Georgia

U.S. and Georgian officials are discussing a security agreement along the lines of the 1998 U.S.-Baltic charter, according to a RFE/RL report on December 18. The charter became a precursor to the Baltic states' membership in the North Atlantic Treaty Organization (NATO) in 2004.

Georgian officials said that talks over the agreement are "intensive," suggesting an agreement may be reached even before the Bush administration leaves office.

The incoming chair of the Senate Foreign Relations Committee John Kerry (D.-Mass.) and Deputy Assistant Secretary of State Matt Bryza were both in Georgia in recent weeks.

Also on December 18, the New York Times published portions of leaked classified U.S. military assessment of the Georgian army ordered following the August war with Russia and conducted in October and November.

According to the report, in spite of 10 years of U.S. aid and several years of budget allocations of nearly $1 billion a year, the Georgian military remains "substandard" and "mismanaged."

"Their command and control is a mess [and] they have no ability to process and analyze strategic information and provide it to decision makers in a systematic way," the newspaper quoted an anonymous U.S. officer as saying.

In tit-for-tat with U.S., Russia seeks sphere of influence in the Americas

Russian Navy destroyer Admiral Chabanenko. This vessel this week delivered humanitarian aid to Nicaragua. Royal Navy photo.

Russian naval vessels delivered humanitarian aid to Nicaragua last week, shortly after Russia's President Dmitry Medvedev arrived to observe joint Russian-Venezuelan military exercises and contemplated reviving a Cold War-era Russian radar during a visit to Cuba.

Aid to Nicaragua arrived just as the United States suspended its Millennium Challenge Corporation program there, citing President Daniel Ortega's democratic shortfalls. (In the 1980s the United States funded a guerilla war against Mr. Ortega, who was then voted out in 1990, only to stage a successful political comeback in 2006.) Earlier, U.S. naval vessels were used to bring humanitarian aid to Georgia.

Mr. Ortega is planning to visit Abkhazia and South Ossetia next week.

Russian moves into Latin America are seen as paralleling those of the United States in the former Soviet republics. Mr. Medvedev declared the former Soviet space an area of Russia's "privileged interests," which itself recalls the two centuries-old Monroe Doctrine that called for exclusion of European influences and sustaining effective U.S. dominance in the Western Hemisphere.

Meanwhile, U.S. and Russian officials held "strategic security discussions" in Moscow on December 15 within the framework of a declaration signed by the two countries' presidents last April, but made little headway on key sticking points such as a European missile defense system planned by the United States.

Azerbaijan, Russia cut oil output as prices fall

Azerbaijan and Russia joined with the Organization of Petroleum Exporting Countries (OPEC) in announcing a big cut in oil production this week, news agencies reported.

OPEC producers agreed to cut production from current levels of 27.3 million barrels a day by 2 million, while Russia and Azerbaijan said they would cut production by 300,000 barrels a day each.

The cut would represent a more than 35 percent reduction for Azerbaijan from the current production level of 840,000 barrels a day. Azerbaijani production - most by the BP-led consortium - peaked at over one million barrels earlier this year.

Oil prices have fallen from the high of $147 per barrel in July to under $40 this week.

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