A senior official from the International Monetary
Fund endorsed on Thursday the Armenian government's
12-year plan to dramatically reduce widespread
poverty, saying that its ambitious targets are
"The Poverty Reduction Strategy Paper is
an honest and sober assessment of the problem
of poverty in Armenia," James McHugh, the
IMF's resident representative in Yerevan, said.
"But it's much more than simply a list of
problems that Armenia faces. It provides a roadmap
over the medium term for confronting them."
McHugh stressed that the plan "does not
endanger macroeconomic stability" in Armenia
because it puts the emphasis on continued economic
growth which the government views as the primary
source of its increased spending on social programs,
education and health care. He also pointed to
the government's pledge to use its scarce resources
more efficiently and said the PRDS "provides
a framework for donor support over the medium
The IMF official made the comments in a speech
delivered at the official presentation of the
PRDS attended by Prime Minister Andranik Markaryan
and several members of his cabinet. The plan,
unveiled in August, envisages that the share of
Armenia's population living in poverty will gradually
drop from the current 50 percent to 19 percent
by 2015. The rate of "extreme poverty"
is to be brought down from 16 percent to 4 percent
by that time.
The government hopes to meet those targets through
the creation of new jobs, improved tax collection
and greater public spending. Sustained GDP growth,
which hit a record-high rate of 14.9 percent in
the first half of this year, will therefore be
central to the success of the plan.
The PRDS forecasts a mid-term stable growth rate
of at least 5.5 percent per annum. According to
Finance and Economy Minister Vartan Khachatryan,
the growth rate for the whole of 2003 will not
fall below 9 percent.
"In recent years we have achieved considerable
successes in the economic sphere," Markaryan
said. "The Armenian economy is becoming more
competitive and that will help us raise living
standards." He admitted that the number of
Armenians living below the poverty line is "large"
at the moment.
McHugh said the IMF, the World Bank and other
Western donors will continue to support the government's
economic policies. In August, IMF he described
Armenia's first-half macroeconomic performance
as "strong," but said the release of
its next $13 million loan to Yerevan is conditional
on more government efforts to address "significant
shortcomings" in the collection of taxes.