Landlocked Armenia must make the best use of human resources - ADB head in Armenia (exclusive)
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YEREVAN, 1 August. /ARKA/. Investors' attention in recent years has increasingly focused on environmentally responsible investments. The Asian Development Bank, positioning itself as a climate bank, allocates considerable funds to the countries of its presence to combat climate change in order to ensure sustainable development. Armenia is not an exception in this context. In an interview with ARKA news agency, Don Lambert, Country Director fornbsp;ADB'snbsp;Armenia Resident Mission, speaks about the ongoing and planned investment projects, as well as highlights their environmental component.nbsp;
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iARKA - Mr. Lambert, President of the Asian Development Bank Masatsuga Asakawa stated at a meeting with Armenian Prime Minister Nikol Pashinyan in November 2023 that ADB was ready to expand the range of joint projects implemented in our country. Could you tell us, please, what kind of projects are he meant?/inbsp;
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D. Lambert - ADB, while developing the strategy of cooperation with Armenia, distinguishes three main directions. The first one is development of the private sector, which, first of all, means direct financing of companies, ensuring an appropriate environment, which includes strengthening and modernisation of transport and other infrastructure.nbsp;
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The second is human capital development and government management capabilities. Being landlocked, Armenia should be able to make the best use of its human resources to become an upper income country. In this regard, we have in mind both projects aimed at health and education, as well as projects aimed at supporting the improvement and reform of public administration.
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The third is climate change. Global temperatures are rising. This is not news, we all know about it, but in Armenia, compared to other countries, on average, the temperature is rising faster. If we look at the weather forecast in terms of expecting rain, according to studies, there will be less precipitation, but the impact of temperature stress on humans will be much higher. ADB, as a clшate bank, envisages helping countries in the Asia-Pacific region to overcome these challenges.nbsp;
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iARKA - Obviously Armenia is aware of these challenges and is actively incorporating the environmental component into economic development. In particular, solar energy is being developed and water conservation projects are being implemented. Is ADB going to take steps to help Armenia implement these projects, and what is the budget planned for this?/iinbsp;/i
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D. Lambert - ADB assists Armenia in various directions. First of all, we are talking about knowledge and awareness raising programmes, capacity building of the government and other players. I will present three areas where I believe we can generate the greatest added value.nbsp;
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The first is the private sector. ADB has opportunities to help private sector companies set up projects that will have an environmental component and then help them find the funds to implement them. Options include green bonds or other types of financing.nbsp;
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The second is water resources management. There is a need in Armenia to build additional reservoirs, modernise and re-equip the irrigation systems, and introduce best irrigation practices. This year ADB an experienced expert in water resources management has joined ADB’s office in Armenia and whose task will be to make recommendations to the Armenian government on water resources issues over the next few years.nbsp;
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Third, electric mobility. Armenia has a unique position that it can take advantage of with the use of electric cars. You have several sources of electricity generation, such as nuclear power plant, natural gas and others. Given this relatively clean energy base, using electricity to charge electric vehicles is much more environmentally friendly than burning fuel in internal combustion engines. Since Armenia is a fairly small country, it is easy and quick to drive from the northern border to the border with Iran (in the south), stopping only once or twice to charge an electric car.nbsp;
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At the moment, I find it difficult to give figures for these projects due to some circumstances. For example, what will be the requirements from the government and the private sector, how successful will it be to attract concession funds.nbsp;
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iARKA - What is the total volume of the Bank's investment portfolio in Armenia today?/iinbsp;/i
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D. Lambert – ADB has cumulatively provided to Armenia about $1.8bn of support, of which approximately 25% has been invested in the private sector, the rest in the public sector.
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iARKA - And what projects has the Bank approved in the first half of 2024? Which projects are expected to be implemented this year?/iinbsp;/i
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D. Lambert - At the moment, a $3 million project has been approved. Its goal is to prepare 1,000 farms to adapt their agro-practices to climate change. I should note that our project cycle coincides with the calendar year and, in line with this, we plan to sign 3-4 more new projects before the end of the year. Under one of these projects, 24 medical centres in the country will be rehabilitated and repaired. All of them are mostly located in rural areas and are in a rather poor, worn-out condition. The goal is to prepare the necessary number of medical centres in Armenia, as the demand for medical services is expected to increase due to the introduction of the universal insurance system.nbsp;
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Another project, which we also plan to approve this year, will be aimed at strengthening public administration. It is about the management of public finances and investments. It is very important that the taxes that the government collects are best invested in the future. At least one more investment programme is related to private companies.nbsp;
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iARKA - In terms of attracting concession funds, how much resources has ADB helped attract to Armenia?/inbsp;
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D. Lambert - ADB is preparing an application to a donor financing body. We assume that within the framework of this application up to $40 million can be allocated to Armenia. They will be aimed at reducing the impact of climate change and helping combat it.nbsp;
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D. Lambert - In terms of risks, I would focus on external risks, peace and stability in the region, as well as macroeconomic risks that could affect the Armenian currency, the dram.
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These are investment risks, but I would like to address climate risks. When we address various projects, we try to envisage measures that would be aimed at combating the increasing temperature. We are trying to make sure that better medical services are provided, water resources are used more efficiently, and we are helping the private sector to develop more environmentally friendly projects.nbsp;
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iARKA - Does the Bank consider the implementation of infrastructure projects taking into account the geopolitical position of Armenia and the possibility of opening transport communications in case of reaching peace agreement with Azerbaijan? /i
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inbsp; nbsp;/iD. Lambert - I would like to mention two projects. We have made investments in the transport system of Armenia. ADB has been involved in many projects, and now it is planned to finance the construction of the northern section of the Sisian-Kajaran road. This investment will help the people of Syunik to have better communication with Yerevan, i.e. to have access not only to better medicine and education, but also to bring in their goods and sell them.nbsp;
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The second direction we are discussing is to assist Gyumri so that the city can benefit as much as possible from the likely opening of the borders. We are exploring helping the construction of a Free Trade Zone and the realisation of a Dry Port. This is very important because Gyumri has important geographical advantages - the city can link Armenia with both Turkey and Georgia and is positioned along what some call the ‘Middle Corridor’. In fact, many countries are trying to make these routes pass through this territory, and it can be very important for trade and economic growth.nbsp;
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The combination of the Dry Port, the Free Trade Zone, and the airport can increase the attractiveness of Armenia and Gyumri in particular as a transit route and increase the chances of ensuring economic growth. All these projects are the skeleton of the Crossroads of Peace project, which we highly appreciate.nbsp;
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iARKA – You have been heading ADB's Armenian office for one year already. How would you assess this period? In general, what tasks do you set for yourself, what projects in Armenia do you consider the most promising?/iinbsp;/i
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D. Lambert - ADB is ready to assist Armenia and to continue working here. The fact that our President, Mr. Masatsuga, visited Armenia last year best underlines the serious attitude of ADB’s team. If you asked me where ADB’s efforts should be directed, I would say unequivocally to the projects on providing housing to the population. Why am I talking about this? Because about 40 thousand families have problems with housing, and the influx of more than 100 thousand ethnic Armenians in September 2023. Since the government has announced that it intends to assist them in providing housing, ADB should play an important role in this context and be as effective as possible.nbsp;
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The next area is private sector investment. More than 25 per cent of ADB's assistance has traditionally been directed to the private sector. I believe that the Armenian economy has more opportunities to absorb foreign investments. By co-operating with ADB, these companies get an opportunity to introduce and develop best practices in terms of corporate governance.nbsp;
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The last area I would focus on is the transport sector. I have already mentioned that ADB is planning investments in the construction of the northern section of the Sisian-Kajaran road. ADB together with the government is discussing the rehabilitation of Dilijan and Pushkin tunnels. ADB also expressed its readiness to be close to the government in the implementation of the Crossroads of Peace project, because these are the projects that directly affect people's lives. -0-
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