Armenia’s Strong Public Expenditure Management Qualifies For British Debt Relief Offer

ArmenPress
Feb 15 2005

Yerevan, February 15, Armenpress: The British Embassy in Armenia
has confirmed today that the Government of the United Kingdom has
offered to pay 10% of Armenia’s World Bank debt repayments until
2015. The British Department for International Development (DFID)
will pay the money into a World Bank trust fund. The International
Development Association (the World Bank agency which provides funding
on concessional terms to the poorest developing countries) will in
turn reduce the repayments which Armenia makes over the next ten years.

The British Government have offered this financial help in recognition
of the difficulties which low income countries face in trying to
reduce poverty while at the same time service their international
debt. The objective is to free additional resources to enable Armenia
to achieve its development goals. Armenia is one of five countries to
benefit in this way, all chosen in recognition that they have sound
public expenditure policies in place which will ensure that the money
saved will be targeted towards poverty reduction. The other countries
are Mongolia, Vietnam, Nepal and Sri Lanka.

Following a meeting with Economy and Finance Minister Vartan
Khachatrian the British Ambassador, Thorda Abbott-Watt, said “I am
pleased that my Government has felt able to make this gesture, which
recognizes and rewards strong economic management. The money which
will be released will help Armenia increase investment in spheres such
as health, education and social support and raise living standards
more quickly.”

Armenia is due to repay the World Bank US$ 8 million, US$ 11 million
and US$ 12 million in 2005, 2006 and 2007 respectively. The United
Kingdom contribution will be 10% of this – US$800,000, US$1.1million
and US$1.2million. Over the ten years of the initiative (until 2015),
the total United Kingdom contribution will be just under US$20 million.