Armenia: World Bank Supports Reforms to Mitigate the Economic Crisis and Promote Medium-Term Growth
Press Release No:2010/008/ECA
Contacts:
In Yerevan: Tatevik Mnatsakanyan, (+374 10) 520-992
In Washington: Michael Jones, (202) 473-2588
WASHINGTON, July 2, 2009 - The World Bank’s Board of Executive Directors today approved the First Development Policy Operation (DPO-1) for Armenia in the amount of US$60 million.
In the context of the global economic crisis, the proposed series of three annual Operations supports Armenia’s strategic objectives of addressing vulnerability to the current shocks by protecting the poor and supporting greater human capital development and improving competitiveness by encouraging better governance and fostering a more favorable investment climate. The latter is a key requirement for post-crisis recovery and growth over the medium term.
“This Operation supports the implementation of the Government's program to help mitigate the social impact of the externally-driven crisis and attract private investment for strong post-crisis growth,” saidAsad Alam, World Bank Regional Director for the South Caucasus. “It provides for maintaining essential social services, particularly for the poor and the vulnerable, who are hurting from the loss in jobs and incomes.”
“The proposed program supports a prioritized and coherent package of reforms needed to diversify the economy, make Armenia more competitive, continue modernization of the public sector, and promote growth and poverty reduction over the medium term,” added Robert Taliercio, Task Team Leader for the program. “This is particularly important since the restoration of high growth rates has to be the engine for increases in jobs and incomes for the people of Armenia.”
The DPO aims to help Armenia mitigate vulnerability by supporting measures such as increased funding for social safety net programs, including Family Benefits (FB), pensions, and unemployment insurance, and by making sure that the programs are reaching those who need them the most. The DPO will also help by restoring funding for selected priority health programs for the poor and vulnerable in with service delivery reforms. Finally it will mitigate vulnerability by supporting improvements to tertiary and preschool education, as well as by strengthening sustainable use of energy and natural resources with more robust environmental impact assessment.
For strengthening competitiveness for recovery and growth, the Operation supports intensified banking sector surveillance and liquidity provision; reduced costs of business registration; priority reforms of the State Revenue Committee and preparation and publishing of a Public Expenditure and Financial Accountability (PEFA) assessment to serve as a baseline for future reforms.
The IDA Credit will be made to Armenia on terms including a 20 year maturity and 10 year grace period.
Since joining the World Bank in 1992 and IDA in 1993, commitments to Armenia total approximately US$1,247 million.
For more information on World Bank-sponsored projects in Armenia,
please visit: www.worldbank.org.am
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