The U.S. Millennium Challenge Corporation (MCC) has again refused to unblock some of its promised economic assistance to Armenia, indicating that the authorities in Yerevan have still not addressed its concerns about “the status of democratic governance” in the country.

Armenia was due to receive US$236.5 million in additional U.S. government assistance under the Bush administration’s Millennium Challenge Account (MCA) program designed to promote political and economic reforms around the world. Most of the sum was to be spent on rebuilding and expanding the country’s irrigation networks. Another $67 million was set aside for reconstruction of about 1,000 kilometers of rural roads.

Last May the MCC, which runs the aid scheme, blocked the release of the first $7.5 million installment of the five-year aid package earmarked for road construction, expressing serious concern about the Armenian government’s harsh post-election crackdown on the opposition. MCC executives and other U.S. officials have since repeatedly reiterated those concerns.

The move led the Armenian government in July to allocate $17 million worth of its own funds to the planned road construction that got underway later in the summer. A government statement on Wednesday quoted Ara Hovsepian, head of the MCC office in Yerevan, as saying that most of the sum has already been spent on roadworks in rural regions of the country. Hovsepian said he and Armenian government officials expect the MCC’s governing board to disburse about $7 million in the first quarter of next year.

But meeting in Washington on Thursday, the MCC board again decided to keep the $7.5 million payment on hold. “The Board reiterated its concerns about the status of democratic governance in the country and underlined its expectations that the government of Armenia fulfill commitments to implement substantive reforms,” it said in a statement. “The Board noted that it would again review Armenia’s performance and examine continued collaboration with the country during its March meeting.”

According to U.S. Deputy Assistant Secretary of State Matthew Bryza, Washington remains “seriously worried” about the continuing imprisonment of dozens of opposition members arrested following the disputed presidential election of February 19. “It should be clear to everyone, for Armenia’s sake, that there are no political prisoners,” Bryza told RFE/RL on Thursday. “The accusation that Armenia holds political prisoners shouldn’t even surface.”

“All these cases should be resolved quickly and everyone ought to be released,” he said.

Meanwhile, a deputy chairman of President Serzh Sarkisian’s Republican Party of Armenia (HHK) expressed dismay at Washington’s refusal to resume MCA funding to Yerevan. “This decision was really unexpected,” Razmik Zohrabian told RFE/RL on Friday. “I hoped for a different decision. But what can we do? Democratic developments are continuing and maybe they will allocate the sum in March.”

Zohrabian acknowledged “some shortcomings in the development of democracy in Armenia” but said the Sarkisian administration has made considerable progress in eliminating them.

But Vahagn Khachatrian, an Armenian opposition leader, strongly disagreed. “There are still political prisoners, serious problems with democracy and human rights, and the MCC’s stance is not accidental,” he said.