The World Bank announced on Wednesday the release of a fresh $24 million loan to Armenia designed to foster enterprise innovation and the spread of information technology (IT) in the country.
The bank said the loan, repayable in 25 years, will be used for improving Armenians’ access to affordable computers and high-speed Internet connection and helping local businesses to authenticate electronic transactions. The Armenian government will provide $6 million for the same purpose from its own resources, it said.
“This innovative project seeks to unleash Information and Communication Technology as a new driver for growth and job creation in Armenia,” Asad Alam, the World Bank regional director for the South Caucasus, said in a statement. “Improved access to computers and high speed internet connectivity will help boost economic productivity, spur innovation, raise incomes of families and small businesses, and help create jobs.”
The statement added that the project will make local IT firms more competitive while at the same time encouraging traditional sectors of the Armenian economy to embrace new technologies.
Successive Armenian governments have declared the development of IT a top economic priority. The local IT sector is currently dominated by several California-based companies that have branches in the country. The largest of them, Synopsis-Armenia, was recently shortlisted for an annual U.S. government award given to American-owned firms around the world.
The sector’s development had for years been hampered by a legal monopoly on telecommunication services enjoyed by the ArmenTel national phone operator. The Armenian telecom market was liberalized five years ago. The use of the Internet in the country has dramatically expanded since then.
“Despite the promising developments in the last few years, major challenges remain for the sector,” cautioned Juan Navas-Sabater, head of a World Bank team that designed the loan project. “The level of internet penetration, or access to broadband, is currently insufficient to achieve the government’s aspirations of a modern Information Society.”