World Bank Pledges More Loans to Armenia Sargsyan Says

YEREVAN (RFE/RL)–The World Bank will provide Armenia with $238 million in fresh loans for development projects in the next three years–Prime Minister Vazgen Sargsyan said on Tuesday.

Sargsyan told reporters that agreement on the release of the low-interest funds was reached during his talks with World Bank President James Wolfensohn in Washington last week. The meeting took place on the sidelines of the Bank’s annual meeting.

Sargsyan said the Armenian government–for its part–pledged to submit a mid-term program outlining goals and priorities of its economic policy. The World Bank disbursed late last month a second $25 million installment of its 1999 Structural Adjustment Credit which goes to cover a considerable part of Armenia’s budget deficit. The money was made available after the Sargsyan cabinet took urgent austerity measures to keep the deficit within its planned limit.

The Armenian premier said he also secured Wolfensohn’s go-ahead for the release next December of the last SAC tranche worth $23.5 million. The World Bank has lent a total of $535 million to Armenia’since 1993–making it Yerevan’s biggest foreign creditor.

Sargsyan said he is equally satisfied with the results of his talks with Michel Camdessus–executive director of the International Monetary Fund. The IMF board of directors is expected to approve this week the release of the last $28 million tranche of its three-year loan program aimed at strengthening Armenia’s balance of paymen’s.

While in Washington–Sargsyan also met with top executives from the European Bank for Reconstruction and Development. In his words–the EBRD takes an interest in Armenia’s power distribution network put on an international tender several months ago.

Sargsyan said he was stunned by leading Western lenders’ and potential investors’ perception of the magnitude of corruption in Armenia–and vowed to combat it in a major clamp down. "As a prime minister and an Armenian–I was very ashamed when corruption in Armenia figured during almost every meeting in Washington," the premier revealed.


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