U.S. Cuts Aid To Armenia Over ‘Democratic Governance’

Armenia Materials 12 June 2009 00:24 (UTC +04:00)

The U.S. Millennium Challenge Corporation (MCC) indicated late on Wednesday that the $67 million project to reconstruct and repair about 1,000 kilometers of Armenian rural roads will not be implemented anytime soon, Armenialiberty.org reported.

The agency, which administers the U.S. Millennium Challenge Account (MCA) program, froze the project following a harsh government crackdown on the Armenian opposition sparked by the disputed presidential election of February 2008. The MCC board of directors has extended the freeze during quarterly meetings held over the past year.

In a statement issued after its latest meeting in Washington chaired by Secretary of State Hillary Clinton, the board said MCC " will not resume funding for any further road construction and rehabilitation." "The responsibility for this outcome remains with the government of Armenia, whose actions have been inconsistent with the eligibility criteria that are at the heart of the MCC program," Rodney Bent, the corporation's acting executive director, was quoted as saying.

"I do not anticipate that the Board will revisit this issue in the future," added Bent.

The move came one day after the U.S. State Department reiterated its discontent with Yerevan's human rights record in an annual report on U.S. efforts to promote freedom and democracy around the world. It again described the February 2008 ballot as "significantly flawed" and criticized the ensuing government crackdown on the opposition.

"Authorities used harassment and intrusive application of bureaucratic measures to intimidate and retaliate against government opponents," said the report. "Police beat pretrial detainees and failed to provide due process in some cases ... Courts remained subject to political pressure from the executive branch, with the selective prosecution of political opponents and absence of due process reflecting the judiciary's lack of independence."

"U.S. officials repeatedly have warned the government that MCC funding is contingent upon its progress in democratic practices and in meeting the MCC indicators," added the report.

U.S. assessment of the May 31 municipal elections in Yerevan promises to be just as negative. U.S. Ambassador to Armenia Marie Yovanovitch said on Tuesday that U.S. Embassy officials who observed the vote witnessed irregularities "throughout the city." Yovanovitch said a report based on their findings will be released shortly.

The U.S. aid suspension led the Armenian government in July 2008 to allocate about $17 million of its own funds to rural road construction envisaged by Armenia's MCA compact. The current economic recession and a resulting major shortfall in tax revenues preclude more such funding this year. Instead, the government secured in February a $25 million loan from the World Bank for rural infrastructure rehabilitation.

The MCC decision will not affect the main $160 million segment of the aid package approved by Washington in 2006. It is due to be spent on rebuilding and expanding Armenia's irrigation networks.