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World Bank Releases Delayed Armenia Loan


By Atom Markarian

The World Bank has released the second $15 million installment of an important budgetary loan to Armenia delayed last October due to the government’s worse-than-expected tax collection, sources in the bank told RFE/RL on Saturday.

The funds will allow the government to meet the bulk of its outstanding expenditures envisaged by the 2001 budget. The decision to unblock their release was made by the World Bank’s board of directors in Washington on Friday, sources said. It will be officially announced early next week.

The move followed the arrival in Yerevan of a high-level mission from the International Monetary Fund which was instrumental in the delay of the second tranche. IMF officials have said that despite a relatively strong macroeconomic performance the Armenian authorities have failed to increase their tax revenues considerably.

No details of their talks with senior officials from the Armenian finance ministry were available as of late Saturday.

The disbursed tranche is part of the World Bank’s fourth annual Structural Adjustment Credit (SAC IV) to Armenia worth $50 million. The loan was due to cover about half of its budget deficit.

Its third $20 million installment, pegged to the privatization of Armenia’s energy distribution companies, has also been delayed. World Bank officials have said that the two government attempts to privatize them failed last year because of “unexpected world market conditions” and the money might therefore be made available in the first quarter of this year.
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