AAA: Senate Affirms Policy Of Regional Cooperation In South Caucasus

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PRESS RELEASE

FOR IMMEDIATE RELEASE

September 21, 2006

CONTACT: Christine Kojoian

E-mail: [email protected]

SENATE AFFIRMS POLICY OF REGIONAL COOPERATION IN SOUTH CAUCASUS

Adopts Amendment to Prevent Armenia’s Isolation

Washington, DC – The Armenian Assembly today praised a key Senate
committee for affirming U.S policy in the South Caucasus by prohibiting
funding for a bypass rail link sponsored by the Turkish and Azerbaijani
governments and aimed at excluding Armenia from economic and regional
transportation opportunities.

Lawmakers approved the Export-Import Bank Reauthorization Act of 2006,
which included an amendment ensuring that no Export-Import funding
is used for a costly and unnecessary rail line connecting Turkey,
Georgia and Azerbaijan while bypassing Armenia. Committee Chair
Richard C. Shelby (R-AL) and Ranking Member Paul Sarbanes (D-MD)
included an amendment offered by Senator Robert Menendez (D-NJ) in the
manager’s amendment. The provision was modeled after the South Caucasus
Integration and Open Railroads Act (S. 2461), which was introduced by
Senator Rick Santorum (R-PA), together with Menedez, earlier this year.

"Armenia is a valued friend of the United States and our government
ought not to be supporting programs or initiatives in the South
Caucasus that exclude that country from participation," said
Santorum. "The manager’s amendment adopted today by the Committee on
Banking will make sure such a scenario does not happen."

"We cannot continue to stoke the embers of regional conflict by
supporting projects that deliberately exclude one of the region’s most
important members," said Menendez. "Fundamentally, this amendment
is about fairness and about inclusion, rather than exclusion. With
this amendment, we are sending a simple message — that we believe
that the United States should support an integrated and inclusive
approach to economic and regional development in the Caucasus region."

The amendment, adopted by the Senate Banking, Housing and Urban
Affairs Committee, states that "The [Export-Import] Bank shall
not guarantee, insure, or extend (or participate in the extension
of) credit in connection with the export of any good or service
relating to the development or promotion of any railway connection
or railway-related connection that does not traverse or connect with
Armenia and does not traverse or connect Baku, Azerbaijan, Tbilisi,
Georgia, and Kars, Turkey."

"Attempts to isolate Armenia are counterproductive to stated U.S.

policy goals of regional cooperation and economic integration in the
South Caucasus," said Assembly Executive Director Bryan Ardouny.
"We commend the leadership of Senators Santorum and Menendez for
introducing legislation that would prevent Armenia’s neighbors from
isolating her, as well as the efforts of Senators Shelby and Sarbanes
in supporting the passage of today’s legislation."

Ardouny also noted that today’s action reinforces a vote by the
House of Representatives and sends a strong message to Baku and
Ankara that such attempts only serve as a destabilizing factor in the
region. On July 25, the House approved a similar amendment sponsored
by Representatives Joseph Crowley (D-NY), together with Congressmen
Edward Royce (R-CA) and Brad Sherman (D-CA).

U.S. Assistant Secretary of State Daniel Fried and Ambassador to
Azerbaijan Anne Derse have both noted that the rail plan does not
foster regional cooperation.

"Removing trade barriers would improve regional integration and
enhance economic cooperation and development," said Fried. "The
proposed railway would bypass Armenia and thus not be beneficial to
regional integration."

The proposed railway is estimated to cost upwards of $800 million
and is expected to take years to construct. An existing line, which
crosses Armenia, is in working condition and could be operational in
a matter of weeks at very little cost. Armenian government officials
have repeatedly said that a new costly railway is unnecessary given
that a railroad linking Armenia, Georgia and Turkey already exists.

The Senate bill (S. 2461), which also has a counterpart in the House
of Representatives, would prohibit assistance for the promotion or
development of a railroad that would connect the three countries
and exclude Armenia. The House bill, introduced by Armenian Caucus
Co-Chair Joe Knollenberg (R-MI), along with Co-Chair Frank Pallone,
Jr. (D-NJ) and Caucus Member George Radanovich (R-CA), is supported
by nearly 100 lawmakers to date.

The Export-Import Bank is a federal government agency which provides
loans, loan guarantees and insurance to support exports of U.S. goods
and services to international markets.

The Armenian Assembly of America is the largest Washington-based
nationwide organization promoting public understanding and awareness
of Armenian issues. It is a 501 (c) (3) tax-exempt membership
organization.

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NR#2006-085

Editor ‘s Note: Photograph available on the Assembly Web site at the
following links:

5/2006-085-1.JPG

Caption: Senator Rick Santorum (R-PA), left, and Executive Director
Bryan Ardouny discussed the Senate rail bill (S.2461) on Capitol Hill
last week.

Senator Menedez issued the following statement:

Export-Import Bank Reauthorization

Armenia Railroad Amendment

September 21, 2006

First, I would like to thank both the Ranking Member and the
Chairman for your leadership today in marking up the Export-Import
Reauthorization Bill. This important piece of legislation makes sure
that the United States continues as an economic leader in the world
and supports U.S. companies as they work to export their goods and
services.

I would also like to thank both Ranking Member Sarbanes and Chairman
Shelby for accepting my amendment today, with minor changes, as part
of the Export-Import Bank Reauthorization. I would also like to thank
the many Members of this Committee on both sides of the aisle who
supported this amendment. As many of you know, this amendment is based
on free-standing legislation which Senator Santorum and I introduced
and which was cosponsored by both Senator Allard and Senator Sarbanes.

Fundamentally, this amendment is about fairness and about inclusion,
rather than exclusion. With this amendment, we are sending a simple
message — that we believe that the United States should support an
integrated and inclusive approach to economic and regional development
in the Caucuses region.

The amendment today would prohibit the Export-Import Bank from
supporting a railroad in the Caucuses region which deliberately
excludes Armenia. Instead, we would like to support a railroad which
includes all of the relevant countries in the Caucuses.

This amendment is consistent with current Administration policy and
supports regional stability and integration in the Caucuses region.

As many of you know, Armenia is a landlocked country between Turkey,
Georgia, Azerbaijan and Iran and can only get goods in and out of
the country by going through one of these countries.

So, Armenia is economically dependent on links such as railroads
through these countries. Unfortunately, Turkey and Azerbaijan won’t
allow Armenia to use these links and have carried out an economic
blockade against Armenia.

The latest example is the proposed Kars-Akhalkalaki-Tbilisi-Baku
railroad, a project that not only ignores an existing rail link which
traverses Armenia, but creates a new one that deliberately bypasses it.

Similar to the proposed Baku-Ceyhan pipeline, this rail link would
specifically go around Armenia, despite the fact that a straight link
that passes through Armenia would be far more cost-efficient.

Now, geographically, we all know that a pipeline or rail line that
seeks to connect Turkey, Georgia and Azerbaijan would logically,
geographically have to pass through Armenia. One would have to
make a special effort to bypass Armenia, making any such project
unnecessarily more expensive.

Azeri President Aliyev has stated publicly that the aim of the rail
project is to isolate Armenia by enhancing the ongoing Turkish and
Azerbaijani blockades and to keep an existing Kars-Gymri rail link that
connects Turkey, Armenia, and Georgia shut down. This ill-conceived
project runs counter to U.S. policy, is politically and economically
flawed, and serves to destabilize the region.

Let me quote our Ambassador to Azerbaijan, Anne Derse, during her
confirmation hearing this May. In response to questions submitted
to the Senate Foreign Relations Committee by Senator Sarbanes,
Ambassador Derse said, "because the proposed railway would bypass
Armenia, and thus not be beneficial to regional integration, we have
no plans to support such a railway financially."[1] As I’m sure you
are all aware, Ambassador Derse was confirmed by the Senate thereafter
and is now our representative in Baku.

It would seem to me that, as the U.S. representative to Azerbaijan,
it is incumbent upon her to remain consistent with existing U.S.

policy. Not supporting the rail link that would exclude Armenia would
be in line with that policy, a policy that seeks to foster regional
cooperation and economic integration and supports open borders and
transport and communication corridors.

We cannot continue to stoke the embers of regional conflict by
supporting projects that deliberately exclude one of the region’s
most important members.

As I stated previously, there is already a railway which connects
these countries and passes through Armenia which could be used to
build a trans-Caucuses railroad. Why would we spend additional funds
to build a new railroad link that goes around Armenia?

The amendment prevents the U.S. from supporting a costlier and
longer route.

I would also like to note that an almost identical amendment was
passed on a bipartisan and non-controversial basis as part of the
House Ex-Im Bank Reauthorization bill (H.R. 5068) and I look forward
to working with both the Ranking Member and Chairman to make sure
these sections are included in conference.

In conclusion, I would again like to thank the Ranking Member,
the Chairman, and their staffs, for all of their hard work on
this amendment. As I said in the beginning, with this amendment we
are supporting fairness in the Caucuses region, we are supporting
economic integration and regional stability, and we are affirming
current Administration policy.

I urge all of the Members of the Committee to join me in supporting
the adoption of this amendment.

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