By Emil Danielyan
The managing director of the International Monetary Fund, Horst Koehler, will arrive in Armenia on Sunday on the first leg of a tour of five former Soviet states aimed at reviewing their ongoing economic reforms, IMF officials in Yerevan announced Friday.
All of those countries, including Russia, have relied on IMF loans for restoring macroeconomic stability after the Soviet collapse. Armenia will be the only country of the South Caucasus which Koehler will visit this time. He will proceed to Tajikistan on Tuesday and then on to Kyrgyzstan, Kazakhstan and Russia.
“His visit, which reflects the Fund's continuing close policy dialogue with the region, will focus on how to carry forward the strong cooperation between these countries and the Fund,” the top IMF spokesman, Thomas Dawson, told a news briefing in Washington. “Mr. Kohler's trip is designed to enable an exchange of perspectives on critical issues facing countries in the region and to discuss the economic performances and challenges, as well as issues regarding the global economy.”
Koehler’s talks with President Robert Kocharian and Prime Minister Andranik Markarian, scheduled for Monday, will come ahead of a widely anticipated decision by IMF’s governing board to disburse a further $13 million loan to Armenia. The board is due to meet on November 24.
The money in question is the fifth tranche of the fund’s $95 million Poverty Reduction and Growth Facility (PRGF), a three-year loan program launched in May 2001. It was designed to reinforce the Armenian national currency, the dram.
The key terms for the release of the tranche were agreed last month by senior Armenian government officials and a high-level IMF mission. The head of the mission, Enrique Gelbard, told reporters in Yerevan that the authorities pledged to further improve tax collection and overhaul the loss-making energy sector and public utilities.
“Higher tax revenues will be needed to finance extra social expenditures envisioned by the government’s poverty-reduction program,” Gelbard said.
The 12-year program was officially made public last month and drew praise from James McHugh, the IMF’s resident representative in Armenia. McHugh also commended the overall macroeconomic situation in the country whose Gross Domestic Product, according to official figures, shot up by 15 percent in the first nine months of the year.
Gelbard also endorsed “the main parameters” of the Armenian government’s draft budget for next year that was sent to parliament last week. He indicated that all of this puts Yerevan in a strong position to secure more IMF loans after the PRGF’s completion in May 2004. “There is a possibility of another [loan] arrangement if the authorities so request,” he said.