Armenia : Supporting Diagnostic Assessment of Public Financial Management

Sovereign Project | 53207-001

The period 20082018 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 20142018, 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
    Farinha Fernandes, Joao Pedro
    Sectors Group
    Request for information
  • Country/Economy
    Armenia
  • Sector
    • Public sector management
Project Name Supporting Diagnostic Assessment of Public Financial Management
Project Number 53207-001
Country / Economy 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 No gender elements
Description The period 20082018 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 20142018, 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 20162020 , 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 Farinha Fernandes, Joao Pedro
Responsible ADB Department Sectors Group
Responsible ADB Division Public Sector Management and Governance Sector Office (SG-PSMG)
Executing Agencies
Ministry of Finance (MOF)
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 20 May 2024 -
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 09 Sep 2023 184,814.20

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