Limiting the Social Impact of the Crisis in Armenia

From the Joint Press Release by the UN, IMF, WB and the Ministry of Labour and Social Affairs of Armenia

The Ministry of Labour and Social Issues, the United Nations (UN), World Bank (WB) and International Monetary Fund (IMF) offices in Armenia discussed the potentially serious impact of the global economic and financial crisis on the Armenian people. 

The UN, WB and IMF officials observed that an economic crisis is now turning into a human development crisis and the Armenian people are now starting to feel the social impact of the economical problems. 

According to the World Bank report on “Implications of the Global Economic Crisis for Poverty in Armenia,” the current crisis could push 172,000 more people below the poverty line in 2009-10, increasing the total number of poor to an estimated 906,000 people, out of which 297,000 people will be extreme poor. A large part of Armenia’s gains in reducing poverty over the last years would be erased. During the first two months of 2009 the unemployment rate in Armenia has increased, while the Gross Domestic Product (GDP) has decreased by 3.7 percent compared to the same period in 2008. Moreover, non-commercial private transfers dropped by about 35 percent in February 2009 compared with 2008.  

“In many developing countries, the consequences of the crisis could be a possible reversal of the gains in human development and progress towards the achievement of the MDGs, especially in the areas of healthcare, including reduction of child mortality, improvement of maternity health, and education,” said Ms. Consuelo Vidal, the UN Resident Coordinator. 

Acknowledging the government’s commitment to maintain the current level of funding for the social sector, including salaries, pensions, family and other benefits, the UN Agencies will support the government’s efforts in devising solutions that will draw together all stakeholders, including international organizations, private sector and the civil society.

In addition, the UN in Armenia is in the process of tailoring its current programmes to address the needs of those most affected by the crisis. 

The Government has shown commitment by accelerating the implementation of World Bank funded projects under the new IDA Fast Track Facility. Such policy responses may include support to the development of small and medium-sized businesses, design and implementation of labour intensive programmes, including public works, better monitoring of the human development impacts of the crisis, development of food security initiatives, efficient budgetary allocation and spending in social sectors, continuous support to the government in capacity building to provide quality social services, adjustment and expansion of existing basic social safety net instruments to better target the most vulnerable groups, as well as generation of reliable data on children and women for tailored policy interventions.    

 Source:  http://go.worldbank.org/P7E1B9RHZ0