Thank you, Mrs. Chairman, ladies and gentlemen, Your Excellency Ambassador Michael Lemmon, Governor Dukmejian. It is an honor to speak at this distinguished forum today and I am delighted to do it together with my colleague and friend, Ambassador Mike Lemmon. I know that he's done a terrific job as U.S. Ambassador to Armenia, and I want to once again thank him for that. From my own experience, I know how challenging it is to represent one's country abroad and have to serve both as a conduit for political, economic and cultural dialogue and a lightning rod for strong sentiments and misconceptions. 

In the words of a 16th century English diplomat, Sir Henry Watson, "An ambassador is an honest man sent to lie abroad for the good of his country." The good thing about U.S.-Armenian relations is that our nations share common values and interests which constitute the basis for our partnership. The U.S.-Armenian friendship makes life easier for us ambassadors, because we can afford to be truthful in our host countries. 

I am proud to state that Armenia's relations with the United States are built on solid foundations and are not confined to any single sphere of human endeavor and international activity. This relationship spans bi-lateral, interstate cooperation, the advancement of Caucasus and Caspian-wide regional initiatives, the strengthening of Euro-Atlantic partnership and integration, and engagement in broader multi-lateral arenas. The range of this cooperation displays itself prominently in various areas from the political to the economic, from the security to the scientific and from the cultural to the humanitarian. 

Today, let me reiterate how strong our commitment is to further enhancing our partnership with this great nation in our common interests and to the mutual benefit of our peoples. We cooperate closely with the United States on a whole gamut of issues such as tackling the global scourge of terrorism, stemming the proliferation of weapons of mass destruction and fighting illegal drug trafficking. In line with our national interests and collective responsibilities, we have cultivated successful cooperation with the United States within a host of international fora and frameworks. They include, but are not limited to, the United Nations, the Organization for Security and Cooperation in Europe, NATO's partnership for peace and Euro-Atlantic Partnership Council, and European arms control treaties. Finally, we are committed to establishing and enhancing our relations with neighboring countries. To meet these ends, we look forward to continued cooperation and support from the United States.

We acknowledge the leading role of the United States in supporting Armenia and its neighbors in achieving a durable peace coupled with stability and security in the southern Caucasus region. We have a strong interest in seeing the United States maintain its leadership position and facilitating role as a co-chair of the process, under the auspices of the OSCE, on a settlement of the Nagorno Karabakh conflict. We believe that peace can only be achieved if parties to the conflict themselves demonstrate the political will in readiness to compromise. It is, however, competent mediation that brings them together, and helps them establish mutual confidence, engage in a constructive search for common solutions, and shape a shared vision for peace and prosperity. Not to be outdone, day-to-day human linkages between our nations stand out as the chief conduit for the development of a uniquely beneficial transatlantic relationship that binds our nations together. Indeed, it is heartening and gratifying to know that hundreds of thousands of Americans of Armenian descent have lived in and fought and given their lives for the United States while making significant contributions to their country and humankind. This state alone, California, is home to the largest compact settlement of Armenians outside of Armenia. 

As a historian, let me say that we, in Armenia, view the democratic traditions of the United States with admiration and reverence. According to the Greek philosopher, Aristotle, "The basis of the democratic state is liberty." As the first modern-day democracy, the United States has served as a beacon of hope for countries throughout the world in their quest to attain and uphold civil liberties. Conversely, as one of the oldest nations in the world and one of the youngest of democracies, Armenia looks upon the United States as a bedrock of political experience and maturity in consolidating a democratic and civil society based on shared values and the rule of law. Further, we remain steadfast in pursuing our aim of building a free market economy, which will tap into the productive resources and entrepreneurial skills of our nation and guarantee prosperity for future generations and ourselves. 

Armenia has experienced more than its share of human hardship, economic crises and regional instability since our nation regained its sovereignty. Armenia will continue its efforts to build a stable, open, economically prosperous and socially progressive society, and implementing the necessary yet challenging democratic, economic, and legal reforms. In the words of President Thomas Jefferson, a founding father of this great country, "The boisterous sea of liberty is never without a wave." During the last few months, our nation has been engulfed with torrents of grief stemming from the callous acts of terror inflicted upon the leadership of Armenia. Yet, like the Biblical Jonah we Armenians have found in ourselves the will and determination to emerge from the abyss and to move forward toward a happier destiny. We appreciate the personal and heartfelt support and sympathy extended by our American friends and you personally, Ambassador Lemmon, to our nation in this trying hour. 

If you ask an average Armenian in Yerevan about U.S.-Armenian relations, the first image that will spring to his or her mind is the generous and noble American effort to help Armenia. The United States has extended to Armenia invaluable humanitarian and development assistance since the days of the devastating earthquake in 1988 and after reestablishing independence in 1991. It is impossible to know the number of lives that this country's assistance has saved, especially during the difficult transition period at the dawn of independence. I can assure you that the people of Armenia will always remember and treasure the sincere and humane spirit in which this assistance was rendered. I'm looking forward to the day when Armenia, too, will assist other members of the family of nations deserving of support and encouragement when in need. 

It is encouraging to see that the focus of the U.S. assistance to Armenia is shifting from short-term humanitarian aid to long-term developmental assistance. Last November, the Congress approved an increase in the Freedom Support Act assistance package, making it over 120 million dollars allocated for programs in Armenia. The newly-created U.S.-Armenia EconomicTask Force will help to ensure that the U.S. assistance is better tailored to our current needs and realities, and will serve as an institutional framework for intensive bi-lateral dialogue on trade investment and strategy. To steal a phrase from you, Ambassador, we should strive to have less "beltway piranhas" and more programs that will promote investment in Armenia, both foreign and domestic, and enhance Armenia's export potential. We should work to create a better climate for investors, foreign and domestic, to invest in Armenia, and the comprehensive market reform package currently underway is a good example of it. Hence, facilitating U.S.-Armenia trade relations stands high on my agenda as Ambassador to the United States. Armenia's exports to the United States nearly doubled over the last two years, although the trade balance is still not in Armenia's favor. Last week, I saw a news report which said that an apparel company in Vanadzar produced 30,000 jacket uniforms for the New York Police Department. I think that their colleagues from the LAPD should follow this suit. My guess is that having California and New York on its side, this Armenian company can then go into other Super Tuesday states. 

Ladies and gentlemen, Armenia has cast its die ten years ago choosing freedom and independence. We enter our future to the concepts and values that, over 200 years ago, helped the people of the United States to build the society you have today. We acknowledge that the main responsibilities for bringing this about lies with us. At the same time, we do anticipate friendly advice and help from our partners, most importantly the United States, to help us materialize this vision.

Thank you very much.

Ambassador Michael Lemmon:

One of the things I found in my career is that in my deep naivete, which I've been developing for 26 years, you aren't effective for your country if you have to lie for it. I've found, even though this runs against the realpolitik school of American diplomacy, that if you vigorously argue your country's point of view--the administration of the day's point of view--and you provide to your interlocutor a context in which to understand why Washington is being so fool-headed about coming in and saying whatever they're saying, but giving them a sense of what's behind it, you're vastly more effective in persuading your interlocutor at least to say: "Well, those Americans aren't totally crazy after all. They may be wrong, but they're not crazy." 

So I try to do that and that leads me into what I attempted to do when I first was preparing to go out to Armenia in the spring of 1998. This was shortly after the first president of Armenia, Mr. Ter-Petrossian, left office, more or less voluntarily. After the new presidential election, Robert Kocharian succeeded him and there was not a terribly receptive or positive reaction in Washington. This was in part caused by their disappointment over the collapse, as they saw it at the time, of the Nagorno-Karabakh peace process and the supposedly intransigent views of President Kocharian. There was this whole attitude as I went around the executive branch and on parts of the Hill [Washington D.C.] where there was this perception or misperception, of Armenia as isolated and self-insulating. Of [Armenia] being in danger of being left out of all of these evolving regional and international processes and institutions that we usually put under the rubric of the Great Silk Road or Euro-Atlantic processes; an Armenia that was defiant of the international community over Nagorno-Karabakh and developing its own version of a masada complex of strategic defiance. 

When I presented my credentials to President Kocharian after the formal ceremony--you generally go into a small private conversation that tends to be pro forma--I decided to use this [time] as an opportunity to share with him the perceptions, or misperceptions, that I had encountered as I was preparing to come out so that he would know how he personally, as well as Armenia generally, were being seen. I was careful and always respectful--that's the key thing, respect, respect, respect, but also frank in sharing what you see with others--and he was somewhat taken a back because it obviously wasn't his self-perception of himself or of Armenia. But I think that that launched us into a very good dialogue, both between the two of us as well as more generally with the Armenian people and government.

From this, in my opinion, somewhat inaccurate perception of where Armenia was over the ensuing eighteen months, evolved a much more positive and constructive direction--at least as my bosses in Washington came to see it, and this was already underway. I don't want Washington to take credit for it. This is something that Armenians themselves were deciding was in their best interest but President Kocharian and the Prime Minister started an active outreach campaign and policy....

On the Nagorno-Karabakh peace process, we suggested not only to Armenia but to Azerbajian and Karabahk interlocutors as well, that one might draw some useful lessons from what we attempted in the Middle East peace process. There you've got a credible negotiating process underway--and it must be credible. To make this work you try and supplement it, complement it with a parallel track that is aimed at encouraging economic trade investment cooperations. You build out the universe of potential stake holders in a settlement, and as you get that dynamic going that provides a more politically enabling environment to take the tough decisions on the political track regarding sovereignty and territory and the rest of it. As that peace process moves forward that gives you greater running room on the economic side so you get a positive dynamic going to counter the always negative dynamics that are out here, such as assassinations. It wasn't well enough underway, unfortunately, when the Prime Minister was assassinated to continue it forward, but I hope in the Armenian context that it's provided enough forward impetus to allow the government to proceed in the aftermath of the October assassinations. 

This has been paralleled in the domestic arena with a very good credible package of democratic and economic reforms. Now everyone is always, particularly in the Armenian community, they hold Armenia to very high standards and they tend to be very very tough. Yes, there are still problems, but Armenia has probably done better than almost any other state of the former Soviet Union in undertaking and enacting real economic and democratic reform. Yes, it's got a lot further to go, and we all know there are problems with getting rule of law instituted in combating corruption, but there has been a great deal of solid progress that I don't think has been fully recognized. 

Armenia articulated a foreign policy of complementarity, where it sought to reach out to all countries. It attempted, for example, to deepen and expand its relationship with Israel while retaining a very good and close relationship with traditional Arab partners as well as with Iran--trying to show that you could chew gum and walk at the same time, perhaps. But they expanded relations with the Far East, with China, Japan, and South Korea, while retaining traditional good relations with Russia and the other states of the former Soviet Union, expanding the relationship with Europe and trying to develop their European vocation and deepening their relationship with the United States. All of this in an inclusive win-win-win approach as opposed to inclusion-exclusion-zero-sum: if you can only have a good relationship with Russia, you can't have it with the United States. I think that's a very profoundly wise policy that Armenia has undertaken. 

As I noted, there has been a quiet but a concrete undertaking that we have tried to support and facilitate in terms of trying to get underway a normalization of relations with Turkey within the context of ongoing negotiations over Nagorno-Karabakh in the context of the historical tragedies that have existed. [We have tried to] look at practical ways of how one might move forward and, again, provide that more enabling environment where the events of the past can be addressed by the countries, by the nations on both sides. In May of last year, there were parliamentary elections that, while not perfect, not totally free and fair in every aspect, were a substantial step forward in the democratic process. It produced, I think, in our eyes, a legitimate parliament representing the broad will of the people. That, equally importantly, led to the creation of a strong stable unified government in Armenia under the auspices of the unity coalition headed on the one part by the head of the Republican Party and on the other by the head of the People's Party and--some of you know--the former Communist Party First Secretary of Armenia in the Soviet period. Together with Robert Kocharian they formed a very, very strong unified government wherein each of them appealed to a different part of the political spectrum and where, in essence, the whole was greater than the sum of its parts. 

We were all very excited in terms of the chance to move forward on a number of fronts. The Prime Minister was committed to economic development, job creation and anti-corruption. He was ably assisted in the parliament by the speaker who pulled together the necessary legislative package and was moving that forward. I accompanied the Prime Minister on a highly successful visit to Washington for the annual World Bank IMF meetings, and we had some very good, very frank--believe me--discussions within the Administration on economic reform, investment climate and the need for serious efforts on the corruption front. The Prime Minister proposed to the Vice President the establishment of the joint task force that Ambassador Kirakossian noted between the U.S. and Armenia. We worked on that hard, and earlier this month we signed that agreement in Yerevan. 

There was an articulated vision, if you will, that seemed to be guiding the government and, I believe, continues to this day. That is a vision of the Caucasus, including Armenia, becoming once again a cross-roads for international trade and commerce, linking central Asia, Russia, the Ukraine, down through the Caucasus, through Armenia and onward through Turkey to the Arabian Peninsula, Persian Gulf, Levant and to Egypt, as well as on to Europe. Having this cross-roads composed of more than simply oil and gas pipelines, although they're an important component of it, but also using the extant infrastructure of road and rail to get a dynamic going. One in which all the countries of the region become beneficiary participants, in which all the peoples of the region can profit once again from this expansion of trade where we move the entire Caspian basin and Caucasus region beyond the old 19th century Great Game of winners and losers included and excluded. This is vital if there is to be, the necessary security and stability within the region that is necessary in our view to attract the billions of dollars of investment that is required to develop the region's resources and build economies. This inclusive vision, in which everyone including Armenia participates and benefits, is a principal impetus behind what I hope to see in this year--a successful, negotiated, durable, and mutually-acceptable compromise settlement in Nagorno-Karabakh. 

October 27th grievously wounded not only the government but the people, the society, of Armenia. It produced fear, anger, mistrust, suspicion, pain, which led to a political stalemate and even a crisis that shocked the entire system--but the system survived. Democratic processes, the constitutional processes, worked. There was not an extra constitutional action despite all of this, and one of the things we lose sight of is of what Armenia went through and coped with and what other countries in the region, in the former Soviet Union, might have done as well. We may be frustrated by the stalemate that seemed to go on month after month, but recent reports indicate that a national unity cabinet is in the process of being formed, bringing together all of the parties represented in parliament in an effort to concentrate on unity, on stability and on getting an authoritative and focused government, of moving Armenia [forward] again. I, for one, think that's probably a good idea. 

I don't think people are ready, are interested, in having another election for president, parliamentarian, parliament or anything else. There has been an incredible hemorrhaging of emigration out of Armenia, there has been after October 27th, a great deal of hopelessness and despair, and I think what the government and the people and its friends on the outside need to do is say "Let's not let the assassins win. Let us be tougher than them. Let us be more committed than them. Let us not let them destroy that dream. Let us start moving on building that new Armenia." Secure, democratic, prosperous, at peace, integrated; I think that is what we are seeing begin to proceed right now.

Now let me just end very quickly by talking about the Nagorno-Karabakh peace process. I, in my naivete and chronic optimism, I actually believe that there is a real possibility for a peace settlement in the year 2000. It's not going to be easy. This is tough. This is really tough stuff. It's going to be hard, it's going to be tough, but I believe it is possible. A couple of reasons why I'm optimistic on this. First, despite whatever the press coverage and the popular reaction to purported elements of a notional peace package might be, I think that there is a very healthy and constructive dialogue, discussion, debate, about what is the proper mixture of the variable options and tradeoffs that might be included in any peace settlement. I think that is good, I think that is healthy, and I think it is needed. Secondly, there appears to be a recognition within the political class that President Kocharian, who came under a great deal of criticism after the assassinations, some attempting to blame him or make him responsible for that fact, that he is by far the best leader to negotiate and to find that mutually acceptable solution....

Third, I'm optimistic there will be a settlement because I believe both President Kocharian and Aleyev as well want one, and that in Armenia and Nagorno-Karabakh at least the political leadership more broadly and the majority of the people are prepared for a good fair settlement and are aware that it's going to require significant compromise. Actually, I hear similar acknowledgment from the Azeri side, that significant compromise by all parties is necessary to finding that mutually acceptable settlement.

Fourth, at least three out of the four neighbors of Armenia and Azerbajian appear to support a settlement. Iran is still a question mark and I can't quite judge where they are on that, but it's really Russia and Turkey who are key in terms of being supportive, and they both said very positive things and we shall continue to watch that closely.

Fifth, the international community, the United States, the European Union and the World Bank, the IMF, OSCE, etc., are prepared to actively and substantially support a peaceful negotiated mutually-acceptable settlement with significant resource support and, in fact, right now we're looking at how one might organize a needs assessment that would visit the region to see what needs to be done to rebuild, repair, what have you for a potential donors conference. [The people of Armenia] know best, they will have to live with the outcome, they know the details and the situation vastly better than any foreigner can and that we, the co-chairs, our role is to support, to assist, to encourage, to cajole, to throw up ideas, to be however useful that we can be in that process, but at the end of the day the responsibility is on their shoulders, not on our shoulders. We will support whatever they, themselves, determine is mutually acceptable. 

With that, I guess we'll end and take some questions.