Dear Ambassador Danilovich,

It was with gratitude and pleasure that we received your letter to President Kocharian informing us that the Millennium Challenge Compact with Armenia has been approved. We understand that we have the honor and the obligation to build on the confidence that has been placed in our government and our people. We are indeed committed to improving on the level of good governance, investment in people and economic freedoms that this program aims to promote and secure.

We do of course acknowledge the deficiencies that you cite in reference to the Constitutional Referendum specifically, and to MCA's "Ruling Justly" category in general.

We truly regret that an opportunity such as the referendum, the outcome of which were to be constitutional changes that will obviously benefit our people, has instead cast shadows on the election process. The irony is that this government, with the strong support of the US and the EU, has been committed to these constitutional revisions precisely because they make possible the kinds of checks and balances that our society needs in order to more consistently move toward deep, internalized democratization and difficult second-generation reforms. We have done so in the belief that these changes, which enhance the role of the National Assembly, in turn resulting in stronger political parties and an independent judiciary, would make the people feel and actually become empowered in order to defend their rights and liberties. We did not wish for and deeply regret that the referendum that made this possible had itself become the occasion for doubt and irregularities.

Those irregularities, observed by international monitors and local media and publicly announced, were not followed up by formal complaints. Our electoral monitoring process depends on the supervision not of the government, but of local and central election commissions. This is a process that had been designed in accordance with the suggestions of European experts. Here, the opposition explicitly has a formal role it opted not to fulfill. By withdrawing its members from all local election bodies, thus removing the checks and balances built into the election monitoring process, the opposition removed the very people who are legally empowered to bring charges against violators. By boycotting the referendum, they forced the collapse of an electoral monitoring system that is, by law, based on checks and balances by the political parties.

This is offered not as justification, but to explain the accountability vacuum that was created. The Prosecutor General formally called on each individual and organization which had raised public alarms, to present their complaints. To date, three cases of fraudulent voting activity and one of violence against a journalist have been filed and are being pursued. We will continue to raise these issues publicly, even as we look forward to the next elections in order for the referendum experience not to be repeated.

Towards that end, on Tuesday, January 10, the President convened a meeting with the Prime Minister and relevant ministers in order to make certain that such efforts continue. Also, he reiterated our understanding that the signing of this Compact is not the end, but the beginning of a process during which we will have to demonstrate consistent, continuous progress at democratization and liberalization. He presented the concepts and motivations which have informed the creation of the MCA and which have great significance for Armenia's stable development. We also spoke of the clear intent of the US Government to use these funds for economic development, only when a society and its leadership comprehend their political responsibility to nurture and sustain democratic practices. The convening and substance of this high level meeting were publicized in order to for all officials - local and national - to recognize that the MCA Compact can be suspended, to highlight our responsibility, and to promote the public's role in their own governance.

In addition, in order to improve the conduct of the elections to be held in 2007 and 2008, we welcome American and European efforts to assist in training for election preparation, administration and monitoring of the entire process as outlined in the proposed USAID election-related assistance program for 2005-2008. Although elections are not the only measure of democratization, they are certainly an obvious instrument with which to gauge the depth and seriousness of a society's engagement and commitment to that process. We will use every legislative, administrative and educational tool available to us to assure the fairness of those elections as evidence of that commitment. And of course, as with previous parliamentary and presidential elections, OSCE monitors will be invited to monitor the election process throughout the country.

We are ready to work with the US government, the EU and the OSCE and are ready to develop an accurate voter registry with independent verification, to conduct voter education campaigns, to increase public interest and involvement in the period leading up to and during the elections themselves and to provide for effective electoral adjudication training and mechanisms. We will work with all segments of civil society - our public organizations and universities - to promote the involvement of women and young people in the political and electoral process, and to enhance the role of the media.

We will make every effort to work with the Embassy in order to be able to provide the US Government with up-to-date information on steps taken towards irrevocable and verifiable progress in democratic development. and economic freedoms to be judged accurately.

We know that we have succeeded in formalizing and codifying our economic gains, as the most recent Wall Street Journal - Heritage Foundation Index of Economic Freedoms indicates, with Armenia placing higher than many Western European countries even. Our legislation and our government policies are in fact in sync with the fundamental principles at the base of the Millennium Challenge concept. There is no doubt, however, that we have much to do in order to thoroughly implement them, advance these political and economic policies and transform them into beliefs and motivators. It is those gaps that the recent Freedom House report cited, and those are the problem areas we are determined to resolve.

Ambassador,

It is both my pleasure and my duty to respond to you on the President's behalf on this occasion. As I have said publicly on various occasions, this is an opportunity we cannot afford to squander. I wish to reiterate my government's appreciation for and understanding of the privilege and responsibility that goes with this Compact. I look forward to working with you and your office in demonstrating that there is much to be gained through opportunities to practice and instill good governance, to secure economic freedoms and to believe in and empower one's population.

Sincerely,

Vartan Oskanian