By Atom Markarian and Emil DanielyanThe Armenian government is set to secure a $25 budgetary credit from the World Bank and expects the Washington-based institution to lend an additional $225 million in the next three years, Finance and Economy Minister Vartan Khachatrian said on Tuesday.
Speaking to journalists, Khachatrian said the bank’s governing board will likely provide the loan to support the implementation of the government’s poverty reduction program. He added that the funds, if they are disbursed, will be made available in October or November and included in the 2004 Armenian budget. They will mainly be spent on the repair of rural schools and roads as well as the improvement of water supplies and irrigation, according to Khachatrian.
It would be the first that time an Armenian government increases its budget mid-way through its implementation.
The World Bank board is also expected to discuss and approved this July a new three-year “country assistance strategy” (CAS) for Armenia. The $225 million in additional concessional loans mentioned by Khachatrian would come under that program.
The World Bank remains Armenia’s single largest creditor, having extended about $790 million worth of credit since its independence. As recently as on May 4 the bank disbursed $35 million in an effort to improve the country’s public utilities and civil service and to shore up its struggling agriculture.
Its planned contribution to Armenia’s modest budget is another sign of Western donors’ satisfaction with the government’s macroeconomic policies and performance. The International Monetary Fund (IMF) similarly allocated yet another $15 million loan tranche to Yerevan last month, while the European Bank for Reconstruction and Development intends to nearly double its assistance to the Armenian private sector. The administration of President Robert Kocharian is also in line secure to additional multimillion-dollar aid from the United States this year under Washington’s Millennium Challenge Account program.
“On the economic side things are going well for Kocharian,” one IMF official told RFE/RL. “He’s got a lot of friends out there at the moment.”