WORLD BANK TO SIGN NEW FOUR-YEAR PROGRAMME WITH ARMENIA
by Venla Sipila

Global Insight
February 27, 2008

The Armenian Development Agency (ADA) and the World Bank are planning
to sign a cooperation agreement worth $2US million by late 2008, ARKA
News reports. The World Bank will allocate $0US.5 million annually
over the next four years for technical and financial support for
Armenia. The ADA was founded in 1998 by the Armenian government,
and given the task of attracting direct investments and supporting
Armenian exports.

Significance:The agreement now reported on likely refers to a programme
with the International Bank for Reconstruction and Development
(IBRD), rather than the other member of the World Bank Group, the
International Development Association (IDA), with which Armenia has
worked since the start of its transition path in 1991 when the Soviet
Union collapsed. Also the IDA recently announced that new credits
will be allocated to Armenia this year for financing budget spending
and social programmes (see Armenia: 8 February 2008: ). The IDA has
provided a total of $840US million in assistance to Armenia since
1991, or some $50US-60 million annually, and informs that Armenia is
the highest performing country in its owe portfolio.

As IDA provides support for the world’s poorest countries, while the
IBRD aims to reduce poverty in middle-income countries and creditworthy
poorer countries, the IBRD extending its assistance to Armenia can
be seen as a milestone on the country’s reform path.

However, although progress has been made, Armenia’s reform challenges
still remain sizeable, so it is important that relationships with
international financial institutions remain good and reforms continue
to progress convincingly. In particular, as noted by the International
Monetary Fund (IMF), one of the most pressing areas calling for further
reform effort is the continued strengthening of tax administration;
additionally, improving financial intermediation and increasing
domestic competition are key tasks (see Armenia: 6 December 2007:
and 5 October 2007).

From: Emil Lazarian | Ararat NewsPress