Hurriyet / Turkish Daily News
Feb 13 2009

ARMENIAN-RUSSIAN LOAN FINALIZED

Armenia and Russia have finalized an accord for the release of a $500
million Russian loan that aims to assist the Armenian government in
alleviating the impacts of the global economic crisis felt by the
country, the Finance Ministry in Yerevan said.

Russian Finance Minister Aleksey Kudrin announced Tuesday his
governments decision to distribute stabilization credit on Feb. 4
after weeks of Russian-Armenian negotiations, reported Armenia Liberty
on its Web site. Yerevan reportedly sought up to $1 billion in Russian
assistance during the talks.

Armenia will repay the Russian loan over 15 years, with a four-year
grace period, the Armenian Finance Ministry said in a statement. The
finalized accord does not require any non-financial obligations from
the Armenian side, according to the statement, assuring Yerevan will
not repay the loan with industrial assets.

Large-scale external assistance is essential for the success of the
governments efforts to lessen the global downturns impact on the
Armenian economy, said Armenia Liberty. The World Bank announced last
week that it would provide Armenia with up to $800 million in loans
for the upcoming four-year period.

The government aspires to use these promised funds to undertake
infrastructure projects in rural areas of the country and provide
credit to local small- and medium-size enterprises. These measures
will at least partly help to counteract the loss of many jobs in
export oriented industries and pave the way for an anticipated drop in
large scale remittances from Armenians working abroad, according to
officials

Vartan Bostanjian, deputy chairman of the Armenian parliaments
economic committee, evaluated the governments anti-crisis plan as
almost faultless, however, he also said its implementation would be a
grueling task. "Every person, including myself, wonders if we will
manage to implement the program in full," he said

Meanwhile, Bagrat Asatrian, a former governor of the Armenian Central
Bank who is deeply critical of the government, said authorities still
lacked a clear-cut strategy to deal with the global
recession. Asatrian also strongly disparaged the governments ongoing
crackdown on tax evasion, stating this move had deteriorated the
financial status of many small businesses and self-employed Armenians
and forced them into bankruptcy

"The world would not collapse if they delayed their tax crackdown by a
year," Asatrian said during a public debate with Bostanjian. "Up to
5,000 people would keep their jobs."