Republic of Armenia: Technical Assistance Report-Public Investment Management Assessment

IMF Staff Country Reports, January 29, 2019

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This paper discusses results of a technical assistance report prepared to evaluate the quality of Armenia’s public investment institutions in the planning, budgeting, and implementation stages of public investment management.
Significant gaps exist in the efficiency of public investments, both in terms of physical outputs and quality.
In a context of limited fiscal space, scaling up public investments will require prioritization of efforts to introduce reforms in areas needing urgent action.
The recommendations in this report prioritize the eight actions at the key stages of the project cycle and for the Ministry of Finance’s capacity development.
Recommendation is made to establish a constraint on in-year changes in project implementation plans and complete the transformation of the Audit Chamber from the Control Chamber.
Armenia is expected to have a more robust audit function when the provisions in the new Law on the ‘Audit Chamber’ are fully implemented.

Efficiency gaps in public investments affect both physical outputs and quality.
Limited fiscal space constrains the ability to scale up public investment without reforms.
Institutional weaknesses exist across the planning, budgeting, and implementation stages of public investment management.

Prioritize the eight actions at the key stages of the project cycle.
Develop Ministry of Finance capacity focused on public investment management.
Establish a constraint on in-year changes in project implementation plans.
Complete the transformation of the Audit Chamber from the Control Chamber and implement the provisions in the new Law on the ‘Audit Chamber’ to strengthen the audit function.