Development Policy Operation 1 New Series

closed

The objective of the First Development Policy Operation Program for Armenia is to support job creation through growth enhancing reforms. The new programmatic series of three Development Policy Operations (DPO) over 2013-15 supports the Government of Armenia in its efforts to spur job creation and enhance sustainability with the goal of reducing poverty and promoting shared prosperity. It aims to achieve these objectives through strengthening competitiveness and enhancing fiscal, social and environmental sustainability. The reforms supported under the new DPO series build on measures under the previous three-year DPO series (2009-12), which supported the government in mitigating the impact of the global financial crisis and to laying the foundations for post-crisis growth by improving competitiveness and facilitating the structural transformation of the economy towards tradable sectors. The new series is anchored in the reforms contained in the government's Armenia Development Strategy (ADS) for 2013-25, which was finalized in August 2013 and the new country partnership strategy for Armenia, which is expected to be finalized in October 2013.Available data suggest that enhancing the economy's ability to create jobs is a necessary condition for reducing poverty and promoting shared prosperity. It supports private sector led growth by improving the business environment, strengthening governance, improving efficiency of government, and strengthening sustainability. Consistently high economic growth rates spur stronger job creation, which helps achieve the goals of poverty reduction and promoting shared prosperity. Armenia's business environment is challenging because of the lack of competition in Armenia's markets, state regulation and government contracts creating barriers to entry for new firms, low connectivity between Armenia and the rest of the world, and low levels of human capital and infrastructure.