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Armenia: World Bank Supports Reforms to Mitigate the Economic Crisis
and Promote Medium-Term Growth

Submitted by Business Desk on July 3, 2009 – 14:00 The World Bank’s
Board of Executive Directors today approved the First Development
Policy Operation (DPO-1) for Armenia in the amount of US$60 million.
In the context of the global economic crisis, the proposed series of
three annual Operations supports Armenia’s strategic objectives of
addressing vulnerability to the current shocks by protecting the poor
and supporting greater human capital development and improving
competitiveness by encouraging better governance and fostering a more
favorable investment climate. The latter is a key requirement for
post-crisis recovery and growth over the medium term.
`This Operation supports the implementation of the Government’s
program to help mitigate the social impact of the externally-driven
crisis and attract private investment for strong post-crisis growth,’
saidAsad Alam, World Bank Regional Director for the South
Caucasus. `It provides for maintaining essential social services,
particularly for the poor and the vulnerable, who are hurting from the
loss in jobs and incomes.’
`The proposed program supports a prioritized and coherent package of
reforms needed to diversify the economy, make Armenia more
competitive, continue modernization of the public sector, and promote
growth and poverty reduction over the medium term,’ added Robert
Taliercio, Task Team Leader for the program. `This is particularly
important since the restoration of high growth rates has to be the
engine for increases in jobs and incomes for the people of Armenia.’
The DPO aims to help Armenia mitigate vulnerability by supporting
measures such as increased funding for social safety net programs,
including Family Benefits (FB), pensions, and unemployment insurance,
and by making sure that the programs are reaching those who need them
the most. The DPO will also help by restoring funding for selected
priority health programs for the poor and vulnerable in with service
delivery reforms. Finally it will mitigate vulnerability by supporting
improvements to tertiary and preschool education, as well as by
strengthening sustainable use of energy and natural resources with
more robust environmental impact assessment.
For strengthening competitiveness for recovery and growth, the
Operation supports intensified banking sector surveillance and
liquidity provision; reduced costs of business registration; priority
reforms of the State Revenue Committee and preparation and publishing
of a Public Expenditure and Financial Accountability (PEFA) assessment
to serve as a baseline for future reforms.
The IDA Credit will be made to Armenia on terms including a 20 year
maturity and 10 year grace period.
Since joining the World Bank in 1992 and IDA in 1993, commitments to
Armenia total approximately US$1,247 million.