US Aid to Armenia $58.5M: Assembly, ANCA urge restoration of Section 907 in wake of Azeri war talk

In late December US President George W. Bush signed the fiscal year 2008 overall appropriations package which allocates $58.5 million to Armenia.

The aid figures $16.5 million less than last year, but is more than the Administration’s request of $35 million. Congress had also approved $3 million in foreign military financing assistance to Armenia and Azerbaijan, reversing the Administration’s bid to retreat from its 2001 pledge to maintain parity in military aid to Armenia and Azerbaijan. Despite Azerbaijan’s continued war rhetoric throughout the year and increase of its military budget, the Administration had proposed to provide Baku with $2 million more in military assistance, but eventually approved only the initial amount.

The bid had raised strong concerns of American Armenian organizations including the two largest – the American Assembly of Armenia (AAA, and the Armenian National Committee of America (ANCA,

In 1992 the US Congress adopted the Freedom Support Act aimed to facilitate economic and humanitarian aid to the former republics of the Soviet Union with a belief that such assistance would help stabilize democratic forms of government and foster economic growth. Section 907 of the Act banned direct military aid to Azerbaijan as a measure against the latter’s blockade of Armenia. However, in the aftermath of terrorist attacks on September 11th 2001 the US Congress granted a conditional waiver to Section 907 in January 2002 in response to then US Secretary of State Collin Powell’s request.

Armenian-American lobbyists are concerned that the waiver may serve Azerbaijan’s military buildup, rather than its intended purpose to help deter terrorism.

“Given the ongoing war rhetoric emanating from Azerbaijan, the Assembly urges the vigorous monitoring of the conditional waiver of Section 907 of the Freedom Support Act to ensure the safety of Armenia and Nagorno-Karabakh, and expects the Administration to provide substantive reporting in this regard,” AAA Executive Director Bryan Ardouny stated as early as last March in testimony before the Subcommittee on State, Foreign Operations and Related Programs. “The Assembly remains deeply troubled by the continued war rhetoric emanating from senior Azerbaijani officials. Should Azerbaijan not cease its increasingly anti-Armenian rhetoric, the Armenian Assembly urges this Subcommittee to suspend the waiver authority it granted and reinstate Section 907.”

In her appeal to the committee, ANCA Government Affairs Director Kate Nahapetian touched upon a number of key issues including restoration of parity in all military aid to Armenia and Azerbaijan, and expanding U.S. assistance to Nagorno-Karabakh to at least $10 million in both humanitarian and development aid, as well preserving Section 907 of the Freedom Support Act.

On June 12th 2007 the House Appropriations Committee adopted its version of the FY08 foreign aid bill, allocating $68 million for Armenia, $6 million in direct assistance to Nagorno-Karabakh, and maintaining parity in the levels of U.S. military aid to Armenia and Azeraijan. The Senate version, adopted by the Appropriations Committee on June 28th, called for only $39 million in aid to Armenia, $4 million above the president’s request, but considerably less than the previous year’s appropriation.

In 2007 the Congress enacted a Continuing Resolution to continue the same funds from the previous fiscal year equaling to $75 million, since Congress was unable to pass the appropriations bills.

“We are troubled by the reductions in aid to Armenia and Nagorno Karabagh, particularly in light on the ongoing economic costs of the Turkish and Azerbaijani blockades, as well as Baku’s increasingly violent rhetoric about restarting its war against the Armenians,” said ANCA Executive Director Aram Hamparian. “We thank all of our friends in the Congressional appropriations process who, working against significant competing budgetary pressures – were able to deliver figures higher than the President’s request, and also to maintain military aid parity.”

The 2008 allotment represents about a third as much as Armenia was awarded some 10 years ago when US support reached nearly $100 million. (The amount includes operational and personnel expenses and it is widely understood that at least a third of the money “never leaves the beltway”, meaning it goes to cover administrative costs in Washington D.C.)

“The final number for Armenia represents a compromise between the House and Senate funding levels approved earlier this year - $68 million and $39 million respectively,” AAA’s Ardouny said, citing his organization’s appreciation for support from subcommittee chairwoman Nita Lowey (D-NY). “We must ensure that despite a reduction in assistance that Armenia and Nagorno-Karabakh have the necessary resources to continue their progress in strengthening their democratic institutions.”

The House Appropriations Committee version of the FY08 foreign aid bill provided $6 million in direct assistance to Nagorno-Karabakh. However, the Senate version only called for direct assistance to Nagorno Karabagh, without setting a specific dollar amount. Neither did the final resolution for FY 2007 provide any language for NKR. In addition, the Senate did not address the issue of military aid parity.

The final measure also provides continued funding for the Millennium Challenge Account program (MCA), although reduced from $1.8 billion to $1.5 billion. Armenia, based on its record of performance in key indicators, is a recipient of MCA with a five-year $235.65 million compact to reduce rural poverty and increase agricultural productivity.