The World Bank to continue encouraging Armenian government in issues having vital importance for Armenia’s progress

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.