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World Bank Approves New Loan For Armenian Rural Development

By Anna Saghabalian

The World Bank has approved a new $25 million loan that will be used for repairing or reconstructing rundown schools, healthcare facilities and water supply networks in remote parts of Armenia.

The decision was made by the bank’s governing board on Thursday and announced by its office in Yerevan on Friday. It raises to $952 million the total amount of World Bank loans provided to Armenia by the Washington-based lending institution since 1993.

A statement by the bank said the latest low-interest credit will finance infrastructure micro-projects in more than a hundred mostly rural and poor communities that have been largely unaffected by the country’s decade-long economic growth. They will result in “newly constructed and renovated schools that are warmer during the winter; … sports facilities; community centers; potable water in homes; and rehabilitated irrigation systems,” the statement said.

The World Bank has already financed about 600 such projects elsewhere in Armenia with two other loans disbursed in 1995 and 2000. Bank officials say the so-called ASIF loans worth $37 million have benefited as many as 1.7 million Armenians.

The fresh ASIF credit is in tune with the Armenian government’s stated efforts to narrow what President Robert Kocharian has called a “huge” development gap between Yerevan and the rest of the country. It was the main theme of a recent conference in Yerevan that brought together more than a thousand representatives of Armenian Diaspora communities around the world. The government presented to them a rural poverty eradication program targeting 159 remote and mountainous villages that have seen little development over the past decade and lack basic infrastructure.

The problem is expected to be somewhat alleviated by $235.6 million in additional assistance to Armenia promised by the United States as part of the Millennium Challenge Account program. The bulk of the money is to be spent on rebuilding atrocious rural roads and Soviet-era irrigation networks. Armenian and U.S. officials say the nationwide rate of poverty among rural residents, which currently stands at 41 percent, will fall by 6 percent as a result of the five-year aid package.

“But it is clear that this is not enough [to solve the problem],” Kocharian said in his address to the conference, calling for a hefty Diaspora contribution to the government program. 


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