Your trusted source

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 two strategic objectives of (i) addressing vulnerability to the current shocks by protecting the poor and supporting greater human capital development; and (ii) improving competitiveness by removing constraints to better governance and a more favorable investment climate—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,” said Mr. Asad 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 Mr. 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; undertaking a review of the FB program to improve targeting efficiency; restoring funding for selected priority programs for the poor and vulnerable in health with service delivery reforms; improving 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; adoption of a timebound action plan and key performance indicators for priority reforms of the State Revenue Committee; preparation and publishing of a Public Expenditure and Financial Accountability (PEFA) assessment to serve as a baseline for future reforms; presentation to the National Assembly of the Law on the Public Service, including provisions for addressing conflict of interest issues.

The IDA Credit will be made to Armenia on terms including a 20 year maturity and 10year grace period.
Since joining the World Bank in 1992 and IDA in 1993, commitments to Armenia total approximately US$1,247 million.