WORLD BANK MANAGEMENT BOARD APPROVES STRATEGY OF PARTNERSHIP WITH ARMENIA FOR 2009-2012 TO AMOUNT OF $670-700MLN

ARKA
June 12, 2009

YEREVAN, June 12. /ARKA/. The Management Board of the World Bank
approved the strategy of partnership with Armenia for 2009-2012 to
the amount of $670-700mln, Head of Yerevan Office of the World Bank
Aristomene Varudakis told reporters on Friday.

According to him, the World Bank will issue $545mln credit to Armenia
under the program for 2009-2012, which is twice more than in 2004-2008.

Varudakis said $150mln will be issued to Armenia as International
Development Association (IDA) credit on favorable conditions, while
$395mln will be issued on conditions of the International Bank for
Reconstruction and Development for states with average revenue.

Besides, Varudakis noted the International Financial Corporation,
as member of WB Group will assign an additional $120-160mln as credit
or participation in capital of private companies.

Varudakis stressed that the period for strategy development coincided
with the period when Armenia can feel the negative impact of the
crisis which led to reduction of exports, prices of main goods as
well as to reduction of international transfers.

The Head of WB Yerevan office stated that as a result of such shocks in
2009 the economic activity and tax incomes significantly reduced which
may bring to a regress in Armenia’s efforts for reducing poverty level.

In this context Varud akis noted that the new WB strategy will
facilitate the country’s struggle for reduction of the crisis impact
so that the rate of economy growth is recovered in 2010 and influence
of the crisis is smoothed for vulnerable population of the country.

Talking about long-term intentions Varudakis pointed out WB assistance
to Armenia for establishing foundations for creating a more competitive
economy, specifically for ensuring a more diversified and continuous
economic growth.

He said that a more diversified economy will be less dependent on
separate economy sectors, such as construction and foreign transfers
and will ensure flexibility towards international shocks.

According to him the strategy is aimed at liquidation of the main
vulnerable factors caused by the world crisis and provides for
assigning budget credits to the Government for implementation of
complex reforms, namely in the sector of management of healthcare and
education as well as of improvement of management in tax authorities.

As part of strategy, a part of the means will be assigned to commercial
banks of Armenia for issuing credits to small and medium businesses
which will contribute to activation of economy and will enable to
carry out investments and create jobs.

The other aim of the assistance to Armenia is improving its
competitiveness and preparing it for economic growth after the crisis.

At the same time the World Bank intends to make investmen ts in
transport infrastructures for reducing transport expenditure as well
as in energy sector for improving energy-supply and reducing loss of
energy in the network.

Varudakis said WB will also assist reforms aimed at improving business
atmosphere and ensure modernization of organs collecting tax incomes.

Since 1992 the World Bank has issued a total of $1.2bln credits
to Armenia.