News Release

3 August 2006

ADB Identifies Three Priority Areas for Beginning Operations in Armenia

MANILA, PHILIPPINES - ADB's interim operational strategy for Armenia - one of its newest developing member countries - has identified three broad priorities to commence operations - accelerate rural development, promote the private sector, and enhance regional cooperation. The strategy is aligned with the Government’s long-term goals. It will provide an opportunity for ADB to learn quickly and add value by coordinating with development partners with long country experience.

Armenia, which joined ADB in September 2005, has made substantial progress in several key areas of economic development. However, significant challenges remain if the country's high levels of poverty – 39% of the population in 2004 – are to be lowered.

“ADB's Interim Operational Strategy is designed to be responsive to the development challenges faced by Armenia. It will guide prospective assistance to areas that have been identified as having the highest potential development impact,” says Shikha Jha, an ADB Economist/Country Programs Specialist.

For improving living standards in rural areas and creating livelihood opportunities and access to markets and services, ADB will concentrate on water supply systems and waste management; rehabilitation of rural roads; and developing alternative sources of energy.

To strengthen enabling environment for private sector development ADB will explore potential assistance to improve regulatory oversight and economic governance. It will also consider support for financial sector development, inclusion of local banks in ADB’s Trade Finance Facilitation Program, local sub-sovereign finance and infrastructure development. These measures are expected to improve standards, governance and liquidity in the market.

To augment Armenia’s regional cooperation and integration initiatives, ADB will consider assistance to rehabilitate its existing regional transport infrastructure to reduce costs of trade and transport, and to upgrade regional energy transmission networks to exploit its hydro-energy resources for export.

ADB’s Board of Directors has approved Armenia’s classification whereby it will become eligible for resources from the Asian Development Fund, as well as ADB’s ordinary capital resources.