ARMENIA EXPECTS SUBSTANTIAL LOAN SUPPORT UNDER CRISIS

ARKA
Jan 27, 2009

YEREVAN, January 27. /ARKA/. Information that Armenia applied to
Russia for a stabilization loan to mitigate the global crisis effects
became one of the most token events in the economic life of Armenia
last week. Russian Minister of Finance Aleksey Kudrin reported about
the negotiations under way in his interview to RIA Novosti.

This was an attention-getting event to the Armenian society also
because officials refrain from mentioning a certain amount of loan
giving a rise to rumors about big amounts and forecasts on lending
terms in local mass media and in the public.

Yet, the fact is that Armenia has been managing to stay afloat under
the global crisis so far owing to a balanced economic policy of the
government on the one hand and to support provided by major financial
organizations such as the World Bank, IMF and Asian Development Bank
on the other hand.

Armenian authorities and the country’s Premier himself do understand
that after having managed to resist the first crisis wave, the country
is in a great need of WB’s and IMF’s support as only prompt and complex
measures can help prevent the expected negative effects of the crisis.

Hence, Armenia is negotiating to get funds required for supporting the
country’s economy in several directions. The Premier reported that
the financial assistance promised by the WB is to be directed=2 0to
main programs in three strategic directions – energy, drinking water
and irrigation, road construction – as well as to implementation
of programs in education, agriculture and social investments that
require smaller financial means.

Back in November last year, Deputy Managing Director of IMF Murilo
Portugal confirmed the Fund’s willingness to support Armenia in
escalating crisis conditions.

In commenting the statement of his Russian counterpart, Armenian
Minister of Finance Tigran Davtyan pointed out that negotiations on
loan support are held in both multilateral and bilateral formats
involving the World Bank and other international organizations,
as well as Russia. Davtyan also told ARKA News Agency that taking
the advantage of external lending on soft conditions acceptable for
Armenian economy is part of the country’s economic policy.

It is early to mention any amount of loan from Russia, the Minister
said adding that the things may be getting clearer within the next
weeks.

Yet, it will be a substantial volume that will allow Armenian economy
effectively coping with the possible effects of the global economic
crisis, Davtyan said.