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Armenia: Supporting Diagnostic Assessment of Public Financial Management

Sovereign (Public) Project | 53207-001 Status: Active

The period 2008 2018 has been much less promising with economic performance characterized by low growth, low investment, deteriorating infrastructure, and growing income disparities. A rapidly increasing public-debt stock has left Armenia with reduced fiscal space. Second-generation domestic structural reforms are needed to help generate stronger and inclusive economic growth, while preserving fiscal sustainability and reducing external vulnerabilities. While the PFM system in Armenia has undergone several positive developments between 2014 2018, including a range of legislative initiatives, institutional changes, and improvements in methodologies and guidelines that were identified as high priorities in the PFM Reform Strategy, these have not resulted in the functional improvements that the government aimed to achieve.

Project Details

Project Officer
Laisiasa Tora Central and West Asia Department Request for information
Country
  • Armenia
Sector
  • Public sector management
 
Project Name Supporting Diagnostic Assessment of Public Financial Management
Project Number 53207-001
Country Armenia
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9737-ARM: Supporting Diagnostic Assessment of Public Financial Management
Technical Assistance Special Fund US$ 220,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Sector / Subsector

Public sector management / Public administration

Gender Equity and Mainstreaming No gender elements
Description The period 2008 2018 has been much less promising with economic performance characterized by low growth, low investment, deteriorating infrastructure, and growing income disparities. A rapidly increasing public-debt stock has left Armenia with reduced fiscal space. Second-generation domestic structural reforms are needed to help generate stronger and inclusive economic growth, while preserving fiscal sustainability and reducing external vulnerabilities. While the PFM system in Armenia has undergone several positive developments between 2014 2018, including a range of legislative initiatives, institutional changes, and improvements in methodologies and guidelines that were identified as high priorities in the PFM Reform Strategy, these have not resulted in the functional improvements that the government aimed to achieve. Although PFM practices in Armenia are nominally sound and considered international standard, in practice there has been a great deal of functional mimicry, institutional fragmentation, overlapping mandates, and ineffective or redundant procedures. These challenges, coupled with inadequate domestic revenue mobilization, have negatively impacted public service delivery and overall economic productivity.
Project Rationale and Linkage to Country/Regional Strategy The Government, in place since May 2018, recognizes that strong public financial management (PFM) can help efforts to achieve fiscal consolidation and debt reduction while improving prospects for macroeconomic stability and inclusive economic growth. It has made PFM reform one of the key pillars of its economic and social development agenda. In December 2018 the government requested the Asian Development Bank (ADB) for technical assistance (TA) in order to support: (i) diagnostic work and analysis on performance-based budgeting (PBB), public investment management (PIM) and revenue management, that would contribute to the update the PFM Reform Strategy 2016 2020 , which it hopes to complete by August 2019, (ii) preparation of a prioritized and sequenced PFM Reform Implementation Roadmap that would, amongst other things, provide a cohesive framework for internal and development partner coordination, and (iii) capacity building and training programs needed to implement the Roadmap.
Impact Institutional modernization of the public administration and governance achieved (Armenia Development Strategy for 2014 -2025)
Project Outcome
Description of Outcome Institutional knowledge and capacity for effective PFM and PIM improved.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Enabling environment for PBB, PIM and revenue management reviewed.

2. Institutional capacity for effective PBB, PIM and revenue management strengthened.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Laisiasa Tora
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies
Ministry of Finance (MOF)
1 Melik Adamyan, Yerevan
Armenia
Timetable
Concept Clearance -
Fact Finding 22 Apr 2019 to 22 Apr 2019
MRM -
Approval 22 May 2019
Last Review Mission -
Last PDS Update 30 May 2019

TA 9737-ARM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 May 2019 - 22 May 2019 30 Jun 2020 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
220,000.00 0.00 0.00 0.00 0.00 0.00 220,000.00 22 May 2019 0.00

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