YEREVAN IN SEARCH OF MORE FOREIGN LOANS

7_4/2/2009_1
Thursday April 2, 2009

YEREVAN (RFE/RL)–Armenia is seeking additional loans from foreign
donors and lending institutions to cushion the growing effects of
the global economic crisis on its economy, Labor and Social Affairs
Minister Arsen Hambardzumian said on Thursday.

Hambardzumian said the Armenian government is currently negotiating
with the World Bank, the International Monetary Fund, the Manila-based
Asian Development Bank and other potential lenders for that purpose.

"We have already gone through a certain negotiating process," he
told RFE/RL. "There is a readiness, there are programs that have
been tentatively approved. But there are some issues that require
further discussion."

The World Bank and the IMF pledged earlier this year to allocate
a total of over $1 billion in anti-crisis loans to Armenia in the
coming years. Some of these loans worth roughly $320 million have
already been disbursed. The Armenian government is also expected to
receive a $500 million "stabilization credit" from Russia by June.

Hambardzumian did not specify the amount of extra funds sought by
Yerevan and how it plans to spend them. He said only that the money
is meant to ease "social tension" in the country.

The Armenian economy contracted in the first quarter of this year
for the first time since the early 1990s, resulting in a sizable drop
in the government’s tax revenues. Citing the revenue shortfall, the
government decided last week to delay 14 percent of its expenditures
envisaged by the 2009 state budget until the fourth quarter.

Vartan Bostanjian, deputy chairman of the Armenian parliament’s
economic committee, admitted that the move is a prelude to a downward
revision of the budgetary targets. "In reality this is nothing but
a cut in expenditures which is called a sequestration," he said.