WHAT IS THE STATUS OF THE MCC PROGRAM IN ARMENIA?

Lragir.am
16:54:19 – 16/12/2008

Background information on the status of the MCA-Armenia program.

What is the status of the MCC program in Armenia?

On Dec 11. 2008, the MCC Board met in Washington and reviewed progress
made on reform measures initiated by the government of Armenia in
recent months.

The Board reiterated its concerns about the status of democratic
governance in the country and underlined its expectation that
the government of Armenia will fulfill commitments to implement
substantive reforms. The Board noted that it would again review
Armenia’s performance and examine continued collaboration with the
country at its March meeting.

â~@¢ The MCA-Armenia Compact continues to operate. However, as an
expression of MCC’s serious concern about recent developments in
Armenia, last Spring MCC halted the contracting process for the major
273 km Compact-funded road works. In response, the Armenian government
proposed and formally agreed to use $16.8 million of its own resources
to proceed with the initial phase of the road program. That decision
gave Armenia extra time during which MCC hopes to see signs that
the Government of Armenia is committed to improving the performance
criteria central to MCC eligibility.

At the moment, the $16.8 million provided by the Government of Armenia
has not been fully exhausted.

â~@¢ MCC is monitoring the situation closely, along with the rest
of the US government. It is proceeding with implementation of all
other aspects of the $236 million Compact, while maintaining a close
dialogue with the Government of Armenia on policy performance issues.

General Background: The $236 million Armenia-MCC Compact signed
in March, 2006 focuses on one goal: the reduction of rural poverty
through a sustainable increase in the economic performance of the
agricultural sector.

This is 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 Compact was signed in March, 2006 and entered
into force in September 2006.

On Dec 12, 2008 MCA-Armenia submitted its tenth disbursement request
for approximately $6.8 million to the MCC. This request pertains to
all MCA-Compact related expenses for January through March, with
the exception of funds for the major 273 km road works contract
which were halted last June (see below). MCC is reviewing the $6.8
million disbursement request according to established procedures and
a decision is expected shortly.

There have been nine quarterly disbursements from MCC totaling about
$25 million since the compact entered into force in September 2006.

The MCA-Armenia Compact is beginning its third year of implementation
and progress on the ground is already evi dent. Construction of the
first 6.5 km of irrigation canals has been completed and the design
of major irrigation infrastructure works is proceeding. Training for
over 18,000 farmers has been completed and $1.5 million in small
credit loans have been disbursed to agribusinesses and farmers. A
pilot rural road rehabilitation of 24.5 km, located south of Gyumi
city is nearing completion.

Despite the progress in Compact implementation, MCC continues to have
concerns about the conduct of the recent election in Armenia and
the post-election situation, including violence, the imposition of
a state of emergency, mass arrests, and restrictions on the freedom
of assembly and the press.

–Boundary_(ID_0YLAO2AkwMJVeXoGcMHHLg)–