ADB TO PROVIDE $200 MILLION CRISIS SUPPORT FOR ARMENIA, GEORGIA, TAJIKISTAN
The FINANCIAL
08/07/2009 17:35
The FINANCIAL — The Asian Development Bank (ADB) is extending $200
million in loans and grants to help Armenia, Georgia and Tajikistan
sustain critical social spending programs that have been imperiled
by the global economic crisis.
ADB’s Board of Directors has approved two program loans of $80 million
equivalent for Armenia; two program loans of $80 million equivalent
for Georgia; and a program grant of $40 million for Tajikistan. All
the funds will come from ADB’s Asian Development Fund, a financing
facility that offers loans at low interest rates and grants to reduce
poverty in its poorest developing member countries. The loans are
expected to be fully used by the end of this year.
"The three economies have been among the worst hit in the region
by the crisis. Armenia and Tajikistan have seen a huge influx of
returning workers who have lost their jobs in the Russian Federation
and Kazakhstan, resulting in a sharp decline in remittance income,
private domestic spending, and government revenue. In Armenia,
real gross domestic product (GDP) is forecast to contract by 9.5% in
2009. Tajikistan’s real GDP growth for 2009 is expected to be zero,
down from 8% in 2008. In Georgia, a loss of investor confidence and a
slump in foreign direct investment, sparked by the conflict of August
2008, have been exacerbated by the crisis, resulting in falling growth
and a decline in employment. Real GDP growth in 2009 is forecast to
be negative 1.5%," ADB informs.
ADB’s funding support will allow the governments to deal with negative
shocks to budget revenue and maintain core spending programs for
critical social needs such as welfare payments and social services for
vulnerable groups. It will also allow them to push through with public
investments designed to preserve and create new jobs for economic
recovery. The funds complement assistance from other multilateral
agencies and bilateral sources, including the International Monetary
Fund, World Bank and European Union, and are aligned with the crisis
mitigation programs of the three countries.
"ADB’s programs, in tandem with the initiatives of other development
partners, will support essential public spending to protect the poor
and vulnerable, as well as aid in the revival of the economies of the
three countries," said Xiaoyu Zhao, Vice President of ADB’s operations
in the region.
Armenia and Georgia joined ADB in 2005 and 2007 respectively, while
Tajikistan has been a member since 1998. To date, ADB has extended
assistance amounting to a total of $83 million, $110 million and $381
million to Armenia, Georgia and Tajikistan respectively.