The World Bank announced on Thursday the release of a $75 million budgetary loan to the Armenian government that commits it to improving the domestic business environment and implementing broader economic reforms.
The Development Policy Operation loan, formally approved by the bank’s governing board in Washington late on Wednesday, will cover around one-third of Armenia’s state budget deficit projected for this year.
“The Operation is designed to support economic growth and sustainability to help Armenia reduce poverty and promote shared prosperity,” Laura Bailey, the head of the World Bank office in Yerevan, said in a statement. “Creating jobs is critical here in Armenia. The program aims to achieve this through strengthening competitiveness and enhancing fiscal, social and environmental sustainability.”
The statement listed five policy objectives that have been agreed with the Armenian authorities and will be supported by the low-interest credit repayable in 25 years. Those include measures to improve the country’s investment climate that has long been affected by government corruption and a lack of competition.
According to the World Bank, the authorities will specifically reduce the frequency of financial inspection of businesses conducted by tax officials. They have also pledge to simplify customs administration procedures for Armenian importers of goods.
The latest allocation raised to just over $2 billion the total amount of various loans disbursed to Armenia by the World Bank since 1993. The figure accounts for roughly half of the country’s overall external debt.