By Emil Danielyan
Armenia is seeking to obtain a sizable loan from Russia in an effort to alleviate the negative impact of the global financial crisis on its economy, senior officials in Yerevan and Moscow confirmed on Friday.
“We have approached Russia to attract financial resources,” Artur Javadian, chairman of the Central Bank of Armenia (CBA), told journalists. “That issue is currently in the discussion stage.”
“These will be additional resources for country’s economy,” he said without elaborating.
Russian Finance Minister Alexey Kudrin likewise announced that Yerevan is seeking a “stabilization credit” from Moscow. “We are now holding negotiations with Armenia,” he said, according to the RIA-Novosti news agency.
Both Kudrin and Javadian declined to give any figures, saying that the Russian-Armenian talks are not yet over.
The Yerevan daily “Haykakan Zhamanak” claimed on Friday that the Armenian government has sharply lowered its aid expectations from Russia and would now settle for $170 million. The paper reported earlier that Prime Minister Tigran Sarkisian discussed the issue with his Russian counterpart Vladimir Putin during a December visit to Moscow.
The Armenian government is also seeking hundreds of millions of dollars in aid and low-interest loans from Western lending institutions and the World Bank in particular. It hopes to secure a $250 million loan package from the World Bank that would be channeled into Armenia’s small and medium-sized businesses through local commercial banks. The Washington-based bank appears ready to disburse at least some of the requested sum.
Foreign assistance will be vital for the success of the government efforts to minimize the fallout from the global economic recession. Armenia’s economic growth slowed significantly in the fourth quarter of 2008 amid falling cash inflows from abroad and an increasingly obvious downturn in its construction sector. The sector had helped to keep the growth rate in double digits in the previous months and years.
The authorities are particularly worried about an anticipated drop in large-scale remittances from Armenians working abroad, another driving force behind the country’s economic recovery. Russia is the principle source of those remittances.
(Photolur photo: Artur Javadian.)