YEREVAN (RFE/RL)–A senior official from the International Monetary Fund held talks with the Armenian leaders on Monday and over the weekend–in the first bilateral encounter since last month’s parliamentary elections that have produced a major government reshuffle in Yerevan. Official sources said budget issues–tax collection and the course of economic reforms in Armenia were high on the talks’ agenda.
John Odling-Smee–head of the IMF’s Second European Department–was visiting Armenia in the wake of the May 30 polls that saw a landslide victory of the Unity alliance of new Prime Minister Vazgen Sargsyan and Soviet-era leader Karen Demirchian–currently parliament speaker.
During its election campaign–the bloc promised a major change in economic policy that has until now largely followed guidelines of the IMF and other Western lending institutions. But the new Sargsyan-led cabinet–named last week–has said it will continue reforms.
According to the Armenian parliament’s press office–Odling-Smee told Demirchian on Monday that the "ways in which the new government plans to close the budget gap" are "realistic." It also quoted Odling-Smee as saying that the "economic situation in the country is improving." The IMF executive met with President Robert Kocharian the same day. The two men "exchanged thoughts on issues related to further lending to the [Armenian] economy," Kocharian’s press office said.
The IMF–which is Armenia’s leading creditor–has yet to release the last $29 million tranche of its Enhanced Structural Adjustment Facility (ESAF) loan. The ESAF is designed for low-income countries to strengthen their balance of paymen’s. The $154 million loan is crucial for Armenia–which imports 3.5 times more than it exports.
Prime Minister Sargsyan has pledged to stick to the previous government’s commitmen’s–ruling out increases in government spending this year. Furthermore–the powerful premier told the parliament last week that worse-than-expected revenue collection could mean spending cuts in Armenia’s already small budget.
Demirchian–who vowed to soften side-effects of the reforms in his campaign rhetoric–on Monday described the IMF’s activities in Armenia as "serious and useful," according to his press service. He was reported to assure Odling-Smee that "the parliament will do its best to spur the economic reforms."