By Atom Markarian
The World Bank will likely release this week the first $20 million instalment of a key loan that will cover half of Armenia’s budget deficit, bank officials said on Monday. The spokesman for the World Bank office in Yerevan, Vigen Sargsian, told RFE/RL that the Washington-based lending institution’s board of directors is to discuss the matter on Thursday. He said the decision is expected to be positive because the Armenian government is largely meeting macroeconomic conditions attached to the low-interest loan.
The money is part of the bank’s fifth Structural Adjustment Credit (SAC-5) worth $40 million. It is a crucial source of financing Armenia’s 2003 budget deficit of 47 billion drams ($80 million), which equals 3.3 percent of its Gross Domestic Product.
Sargsian said international criticism of last week’s Armenian presidential election will have no impact on the fate of the SAC-5 program. “One should keep in mind that the World Bank is not a political structure, even though we have closely followed and will continue to follow political developments in the country,” he said.
Sargsian argued that although the World Bank is “not encouraged” by reported vote irregularities it believes that its loans are important for reducing poverty, which he said is a major obstacle to Armenia’s democratization.