Announcement of Armenia Institution Building Project on April 1, 1993

FOR IMMEDIATE RELEASE iWorld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 93/78 Contact: Peter Riddleberger Tel: (202) 473-1786 ARMENIA: INSTITUTION BUILDING PROJECT The following is additional information about a project announced in the latest issue of World Bank News. DATE: April 1, 1993 WORLD BANK GROUP SUPPORT: World Bank loan: $12 million. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.43 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. TOTAL COST: $17.2 million OTHER PROPOSED FINANCING: Government of Armenia, $500,000; United States Agency for International Development, $3.7 million; European Community, $1 million IMPLEMENTING AGENCY: Ministry of Economy ESTIMATED COMPLETION DATE: 1996 PROJECT DESCRIPTION: The objective of the Institutions Building Project is to assist the Armenian government to strengthen the institutional basis for economic reform through institution building programs in four functional areas: (a) economic management, (b) resource mobilization, (c) enterprise reform, and (d) financial sector reform. Under the Economic Management component the project includes (a) an economic policy formulation and aid coordination component that will provide assistance to the government to help define appropriate roles and restructuring plans of the Ministries of Finance and Economy, support the aid coordination and management capacity in the Ministry of Economy, and assist the Ministry of Finance in establish- ing its debt reporting mechanism; (b) a legal reform component to maintain momentum in the legal and economic reform areas, as well as to help remove legal constraints to the development of the private sector, and technical assistance to support the design of legislative and regulatory reforms; and (c) a social safety net and employment component that will finance consulting services to the Ministry of Labor and Social Protection and the Department of Economic Reform. Under the Resource Mobilization component, the project includes (a) a tax administration component that will provide assistance to improve the capacity of the tax inspectorate to design tax policies and administer the tax program; and (b) a customs administration and trade facilitation component which will assist the government to modernize customs laws and regulation, review and reform the organization and procedures, provide essential training in customs, and promote private sector development. Under the enterprise reform component, the project will finance (a) support for privatization including an industrial sector study to review policy options and appropriate targeting of restructuring and privatization efforts and (b) support for public sector enterpris- es. Under the Financial Reform component, the project includes provision of expert assistance, training, and equipment to establish the infrastructure for financial reform.