THE WORLD BANK TO CONTINUE ENCOURAGING ARMENIAN GOVERNMENT IN ISSUES HAVING VITAL IMPORTANCE FOR ARMENIA’S PROGRESS

ARMENPRESS
Oct 19, 2009

YEREVAN, OCTOBER 19, ARMENPRESS: The World Bank Managing Director
Ms. Ngozi Okonjo-Iweala completed October 18 her two-day visit to
Armenia, as part of her first trip to the South Caucasus. An official
from the World Bank Armenian Office told Armenpress that the aim of the
visit was to discuss with the Armenian Government, business leaders,
and civil society the impact of the financial crisis and ways to ease
the crisis and ensure sustained economic growth.

Ms. Okonjo-Iweala met with the President of the Republic Serzh
Sargsyan, the Prime Minister Tigran Sargsyan and the key members of
the economic team of the Government. The discussion was centered on the
progress in the implementation of the new Country Partnership Strategy
(CPS) and the challenges for Armenia to regain sustained growth.

Armenia has responded appropriately to the crisis, which was not
of its own making. It also entered the crisis with some strengths,
thanks to a well-capitalized and liquid banking system, a low level
of public debt, and a small fiscal deficit.

However, Armenia has been severely hit by the crisis, because of
strong dependence on a few sectors for its growth, and on remittances
for the financing of investment. The crisis is a chance for Armenia
to confront some of the deep-seated, interconnected, problems it faces.

These include enhancing transparency; dismantling artificial monopolies
to genuinely increase competition; taking steps to fight corruption;
and radically improving customs and tax administration.

"These challenges need to be addressed to permit Armenia to attract
investment, diversify its economy, and capitalize on its future
opportunities, its potential, and the entrepreneurship of its people",
said Ms. Onkonjo-Iweala.

Ms. Onkonjo-Iweala also visited Bank-financed projects that Armenia
is implementing. Armenia was the first country to use the IDA Fast
Track Initiative, as an immediate response to the global economic
crisis. Ms. Okonjo-Iweala visited Aragatsotn marz and met with project
beneficiaries. In Yernjatap village she met and talked with the
residents who have prioritized the reconstruction and expansion of the
Community Center, implemented by the Armenian Social Investment Fund
(ASIF). The project will be completed soon and the new Center with
hall for ceremonies, library, medical center, and administrative rooms
will fully serve the needs of the village. Ms. Ngozi Okonjo-Iweala
also visited Vardenut and Ara villages where a 3.5 km road is being
rehabilitated to connect both communities to the highway. The project
is about to be completed under the Lifeline Road Improvement Project
(LRIP), thus reducing the transportation costs of delivering the
agricultural products to markets, improving competitiveness and living
conditions of villagers, and generating employment opportunities at
the local level.

In Agtsk village Ms. Okonjo-Iweala visited a gasification network,
prioritized by the residents and funded by the Rural Enterprise and
Small-Scale Commercial Agriculture Development Project (RESCAD). This
project, already completed, will provide to the residents, especially
to women, better and safer winter heating and cooking conditions,
and will generate new business activities. In Voskehat village she
visited the recently established "Ashtarak dzu" poultry farm. New
technologies at the farm have reduced the cost of production and have
generated new employment for men and women from surrounding villages.

"The World Bank is very proud to team up with the Government and local
communities for the implementation of these impressive projects,
which in one place enable people with economic opportunities,
in another area provide better access to social services, while
generating employment at the local level at a time of economic
contraction." said Ms. Okonjo-Iweala. "But it is important that
these investments are maintained and that the central, regional, and
local authorities provide adequate maintenance financing for them",
emphasized Ms. Okonjo-Iweala.

While meeting with the business and civil society representatives,
Mrs. Ngozi Okonjo-Iweala underscored that the Bank values these
consultations and is committed to engaging actively in ongoing
dialogue with the public, be it on individual projects the World Bank
is supporting, or more broadly, on the economic and social agenda. The
Bank will also continue to encourage the Government to intensify its
dialogue with all the stakeholders on issues of vital importance for
Armenia’s progress.

Ms. Okonjo-Iweala’s visit is seen by the World Bank as an important
step in enhancing and further extending its partnership with Armenia.

Together with the Prime Minister Mr. Tigran Sargsyan, Ms.

Okonjo-Iweala inaugurated the new office of the World Bank in Yerevan.

The Bank presented its new CPS to the Board in June 2009. It provides
for new IDA/IBRD lending of $545 million for 2009-2012 and IFC
investments in the range of $120 to $160 million. It is intended
to assist Armenia to resume growth and reduce the impacts of the
crisis on the poor. It also aims to help Armenia lay the foundation
for a more competitive economy-a key requirement for diversified
and sustainable growth. The current portfolio consists of 21 active
projects with commitments of $506.5 million.

Since 1993 the World Bank has financed 54 projects with total
commitments up to $1.3 billion.