Millennium Challenges Corporation Signs Five Year $235 Million Compact with Armenia

(ARMENPRESS/RFE/RL)–The United States formally released on Monday $235 million in economic assistance to Armenia–to be provided over the next five years under the Bush administration’s Millennium Challenge Account (MCA) program.

Chief Executive Officer of the Millennium Challenge Corporation (MCC)–Ambassador John Danilovich and Armenia’s Minister of Finance and Economy–Vartan Khachatrian signed the compact–which is designed to reduce widespread rural poverty by upgrading the country’s battered irrigation networks and rural roads.

MCC Chair Secretary of State Condoleezza Rice officiated and witnessed the signing. She was joined by Armenia’s Foreign Minister Vartan Oskanian.

Rice said the assistance is a "testament to the hard work and dedication of the Armenian people and their elected government."

"I congratulate the people of Armenia for developing a results-focused and transformational program that will improve the lives of the poor," said Danilovich. "MCC assistance will be used to rehabilitate roads needed for Armenia’s living in rural areas to access social services such as healthcare and markets to sell their products. The Compact also includes funding for projects that will increase the productivity of farm households through improved water supply–higher yields–higher-value crops–and a more competitive agricultural sector."

Ambassador Danilovich added–"Continued eligibility for Millennium Challenge Account funds depends on adherence to our indicators measuring performance in ruling justly–investing in people–and encouraging economic freedom. MCC will continue to monitor Armenia’s policy performance in these three categories throughout the life of the Compact."

"Our partnership will help Armenia to fight poverty through sustainable economic growth," Rice said during the signing ceremony held at the State Department. "To ensure that progress toward this end remains constant–Armenia must continue to advance its democratic reforms."

Foreign Minister Vartan Oskanian–who also spoke at the ceremony–assured Washington that his government is "aware that we have the obligation to build on the confidence that has been placed in our government and people."

"We know that corruption must not be tolerated and that law must rule–that the principles of democracy must be transformed to traditions of democracy in our country," he said.

The launch of the aid program came nearly two years after Armenia was included on the list of 16 developing nations eligible for MCA funding. The Millennium Challenge Corporation (MCC)–a US government agency administering the scheme–approved the Armenian government’s detailed aid application late last year.

Most of the MCA funds–$146 million–will be spent on rebuilding and expanding the country’s battered irrigation networks. Another $67 million would go to pay for capital repairs of about 1,000 kilometers of rural roads that have fallen into disrepair since the Soviet collapse. Officials say these projects will directly benefit 75 percent of approximately one million Armenia’s living in rural areas.

The MCA aid will be disbursed parallel to regular US assistance to Armenia which has totaled $1.6 billion since 1992. Oskanian described it as "invaluable."

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