YEREVAN, December 10. /ARKA/. The World Bank Board of Executive Directors approved today a US$50 million loan for the Third Development Policy Financing (DPF-3) for Armenia to support a wide range of reforms promoting fiscal, social and environmental sustainability and strengthening competitiveness, the press office of the World Bank reports.
This is the third in a programmatic series of four DPFs, supporting the Government of Armenia in meeting its strategic objective of job creation, which is the country’s overarching development challenge.
According to the report, there are two pillars under this operation: the first one includes measures increasing the fiscal space, improving the financial sustainability of key sectors, enhancing the efficiency of social protection programs, and improving environmental and social safeguards in the mining industry, which accounts for over half of Armenia’s exports. The second pillar focuses on strengthening the business environment, improving trade facilitation and connectivity, and supporting access to credit.
“The Operation is designed to reinforce Armenia’s macroeconomic stability and resilience through increased attention to fiscal sustainability, and to continue efforts to improve competitiveness in the context of an uncertain external environment,” Laura E. Bailey, World Bank Country Manager for Armenia, is quoted in the report as saying. “The program supports reforms that affect the poor and the bottom 40 percent of the welfare distribution by protecting the scope of public transfers and addressing other social needs, as well as enhancing employment opportunities as a result of increased competitiveness and improved business environment.”
The Operation supports several reform measures implemented by the Government, and focuses specifically on the development of the Unified Tax Code through expanding the tax base, rationalizing rates, improving transparency of tax policy and closing major loopholes in the current tax legislation The new Tax Code will address issues related to complex, unsystematic and occasionally contradictory regulations reducing voluntary tax compliance, distorting the horizontal equity of taxation and creating uncertainty for businesses and households.
The Third DPF in the total amount of US$50 million is an IBRD flexible loan with fixed spread with a 14.5-year grace period and repayment of over 25 years.
Since joining the World Bank in 1992 and IDA in 1993, the total IDA and IBRD commitments to Armenia amount to US$2.2 billion. —0—-
