Poverty Reduction Support Credits

Abstract

Armenia gained its independence from the
 Soviet Union in 1991 and inherited a traditional Soviet-
 style command economy. After a period of hyperinflation and
 economic contractions, progress on basic reforms led to
 greater macroeconomic stability. The reform effort
 strengthened after 2000, aided by return flows of investment
 from the diaspora. Recognized for its prudent fiscal
 management and improved business environment, Armenia
 received a Rehabilitation Credit (RC) from the World Bank in
 1995 and a series of five Structural Adjustment
 Credits(SACs) from 1996-2003 to maintain
 stability, accelerate growth, and sustain reform. The PRSC
 program in Armenia centered on four main themes that
 supported Armenia's poverty- reduction objectives: i)
 consolidating macroeconomic discipline and strengthening
 governance;ii) sharpening competition and
 entrenching property rights; iii) mitigating social and
 environmental risks; and iv) modernizing the rural economy.
 The PRSC also identified good governance and reduction of
 corruption as essential to achieving pro-poor growth.
 Furthermore, reforms implemented under the PRSC were
 intended to make the social sectors more efficient, raise
 the quality of services, and increase access for the poor.