ARMENIA AND U.S. FORMALLY INAUGURATE $235 MILLION RURAL DEVELOPMENT PROGRAM

Armenpress
Sept 29 2006

YEREVAN, SEPTEMBER 29, ARMENPRESS: On September 29, 2006, the five year
Millennium Challenge anti-poverty development program agreed to earlier
this year by the United States and Armenia was officially inaugurated
with an exchange of letters. In a ceremony held at the Ministry of
Finance and Economy, Finance Minister Vardan Khachatryan and Alex
Russin of the Millennium Challenge Corporation exchanged letters
which formally inaugurate the $235 million anti-poverty program.

The Armenian Compact is designed to reduce rural poverty through a
sustainable increase in the economic performance of the agricultural
sector. Armenia plans to achieve this goal through a five-year program
of strategic investments in rural roads, irrigation infrastructure
and technical and financial assistance to improve the supply of water
and to support farmers and agribusinesses. The Program will directly
impact approximately 750,000 people, or an estimated 75 percent of
the rural population, and is expected to reduce the rural poverty
rate and boost annual incomes.

The Compact includes a $67 million project to rehabilitate up to 943
kilometers of rural roads, more than a third of Armenia’s proposed
Lifeline road network. When complete, the Lifeline road network will
ensure that every rural community has road access to markets, services,
and the main road network. Under the Compact, the Government of Armenia
will be required to commit additional resources for maintenance of
the road network. The Compact also includes a $146 million project to
increase the productivity of approximately 250,000 farm households (34%
of which are headed by women) through improved water supply, higher
yields, higher-value crops, and a more competitive agricultural sector.

Millennium Challenge Corporation (MCC), a U.S. government corporation
designed to work with some of the poorest countries in the world, is
based on the principle that aid is most effective when it reinforces
good governance, economic freedom, and investments in people that
promote economic growth and elimination of extreme poverty.