Armenia Receives $500 Million Loan From Russia

I just read that a loan to Armenia provided by Russia in the amount of $500 was completed on June 15. The loan will be repayable in 15 years.

Armenia’s Finance Ministry will supposedly ensure that some of the funds will be distributed to small and medium-sized businesses as well as to large companies that have taken a blow from the world economic crisis. Infrastructure projects will also be undergone and budget deficits will be managed. Also, $70 million will supposedly be spent on reconstruction projects in areas hit by the 1988 earthquake. It’s hard to believe that the Armenian government is still trying to channel funding to such projects which should have been completed several years ago.

I’m having a hard time comprehending that loan distribution–$500 million is a lot of money. Given Armenia’s dismal record in governmental corruption, I am skeptical about how this money will actually be spent. Enough money never seems to be distributed to fully complete projects that fall within the budget scheme. It’s hard for me to fathom that in Gyumri for instance partially destroyed buildings are still standing after all these years, where they should have been demolished with new ones  built in their place long ago. Will part of the $70 million be used for finally resolving such issues? And what about installing new water and gas pipelines in remote rural areas of the country, not to mention road repair–will that happen anytime soon?

The Armenian government has to be called into check with how exactly this half-billion will be spent. Apparently the Finance Ministry will issue reports on occasion detailing where the money is going, but whether the information contained in them will indeed be credible is anyone’s guess. I’m wondering if Moscow will be auditing Armenia’s spending practices going forward.