Armenia expects substantial loan support under crisis

YEREVAN, January 27. /ARKA/. Information that Armenia applied to Russia for a stabilization loan to mitigate the global crisis effects became one of the most token events in the economic life of Armenia last week. Russian Minister of Finance Aleksey Kudrin reported about the negotiations under way in his interview to RIA Novosti.

This was an attention-getting event to the Armenian society also because officials refrain from mentioning a certain amount of loan giving a rise to rumors about big amounts and forecasts on lending terms in local mass media and in the public.

Yet, the fact is that Armenia has been managing to stay afloat under the global crisis so far owing to a balanced economic policy of the government on the one hand and to support provided by major financial organizations such as the World Bank, IMF and Asian Development Bank on the other hand.

Armenian authorities and the country’s Premier himself do understand that after having managed to resist the first crisis wave, the country is in a great need of WB’s and IMF’s support as only prompt and complex measures can help prevent the expected negative effects of the crisis.

Hence, Armenia is negotiating to get funds required for supporting the country’s economy in several directions. The Premier reported that the financial assistance promised by the WB is to be directed to main programs in three strategic directions – energy, drinking water and irrigation, road construction – as well as to implementation of programs in education, agriculture and social investments that require smaller financial means.

Back in November last year, Deputy Managing Director of IMF Murilo Portugal confirmed the Fund’s willingness to support Armenia in escalating crisis conditions.

In commenting the statement of his Russian counterpart, Armenian Minister of Finance Tigran Davtyan pointed out that negotiations on loan support are held in both multilateral and bilateral formats involving the World Bank and other international organizations, as well as Russia. Davtyan also told ARKA News Agency that taking the advantage of external lending on soft conditions acceptable for Armenian economy is part of the country’s economic policy.

It is early to mention any amount of loan from Russia, the Minister said adding that the things may be getting clearer within the next weeks.

Yet, it will be a substantial volume that will allow Armenian economy effectively coping with the possible effects of the global economic crisis, Davtyan said. –0—