By Atom Markarian
International financial institutions differ on whether they should provide the planned credits for structural reforms in Armenia. The International Monetary Fund has given a negative rating to the Armenian economy and refrains from giving further credits. IMF advises World Bank to follow its recommendations on Armenia. But the World Bank thinks that the cabinet of Prime Minister Andranik Markarian has met all its obligations and thus the WB is ready to provide another portion of SAC-4 credit, which amounts to $15million. Nevertheless, the World Bank has made it clear it will provide the credit only after Armenia settles its differences with the IMF.
After a meeting today with Prime Minister Markarian, the Director of the regional projects of World Bank, Judy O'Connor told journalists that the Armenian government implemented all agreements except for the one with IMF on the government's revenue performance. "Once that agreement has been achieved between the government and IMF we will be very quick ... to disburse the second tranche of the SAC-4 credit "Structural Adjustment Credit"."
The International Monetary Fund has criticized the Armenian government for not achieving its planned targets on tax revenue collection. According to experts, IMF might withhold the disbursement of $10 million credit. But there is another possibility of getting credit from the World Bank. The Bank could simply go ahead and provide its credit for the structural reform ignoring IMF's opinion. However, according to Armenian economists, the World Bank would try to avoid this scenario.
The World Bank had some reservations also for disbursement of the last tranche of SAC-4, $20 million, which the Bank will provide after Armenia completes privatization of its electrical grids. The World Bank representative admitted that the government is doing everything to privatize the electrical grids but the global economic slowdown which accelerated after terrorist attacks in the US decreased investors interests and it is not clear whether qualified investors will participate in a tender for privatizing the grids in Armenia, O'Connor said.