By Atom Markarian
A senior official from the World Bank promised on Friday more multimillion-dollar loans to Armenia, praising its “very impressive” economic growth and its government’s strategy of reducing widespread poverty.
Donna Dowsett-Coirolo, the World Bank director for the South Caucasus, said the flow of low-interest funds to Yerevan will likely continue unabated and may even increase in the next five years under the bank’s new “country assistance strategy” (CAS) to be unveiled next year.
The four-year CAS is tied to a 12-year poverty reduction program approved by the government on August 8. The document, described as “very good” by Coirolo, envisages that the share of Armenians living in poverty will drop from the current 50 percent to 19 percent by 2015. The government pledged to achieve that through the creation of new jobs, improved tax collection and greater public spending.
According to Coirolo, all of that is in tune with the World Bank’s new Armenia strategy. “It’s quite likely that a major emphasis in the next four years will be to support the government’s
development in the social sector, health education,” she said, adding that helping Armenia sustain its high growth rates will also be a top priority.
The Armenian government has already received $112 million under the current CAS launched in 2001. The figure is expected to rise to $160 million by the program’s completion next summer.
Coirolo, who met with President Robert Kocharian and other Armenian leaders this week, said the government may get more than that from 2004 through 2008 if it carries on with the reforms. “If Armenia continues to make very good progress in implementing its poverty reduction program, I think it is highly likely that it will be one of the countries benefiting from high-case assistance,” she told a news conference in Yerevan.
But she noted that the positive impact of economic growth has largely been confined to the Armenian capital and urged the government to make sure that its benefits are felt in other parts of the country. “I think one of the challenges will be to look very carefully at what can be done to stimulate economic activity outside Yerevan and particularly in rural area,” she said.
The total amount of loans and grants provided to Armenia by the World Bank over the last decade is close to $740 million. The two sides are currently negotiating on the terms of release of a new $20 million loan which is due to cover nearly half of the Armenian budget deficit this year.
The World Bank’s resident representative in Yerevan, Roger Robinson, told RFE/RL last month that the second tranche of the fifth Structural Adjustment Credit is conditional on “a very large package” of government actions that would reduce corruption, improve the investment climate and amend banking and labor legislation.