The Armenian financial market is underdeveloped, but it has great potential, Karen Tamazyan, Head of the Financial Market Development Department, RA Ministry of Finance, told a news conference. The Government hopes for rapid development of the financial market due to pension reforms, which are to be launched on January 1, 2011. A compulsory accumulation system is to be introduced on January 1, 2014.

Tamazyan referred to the experience of Peru, where pension reforms developed the market, promoted investments and encouraged enterprises to come out of the shadow and attract investments – all this within two years. He hopes Armenian oligarchs will follow suit; otherwise they will not have access to the pension funds. However, we think the official underestimates Armenian oligarchs’ potential.

Tamazyan promised the compulsory pension system will allow pensions to constitute 45-50 per cent of the former monthly incomes against the current 25%. To prevent an impact of the AMD/USD rate fluctuations on savings, annual adjustments for inflation are planned. The Government will also double citizens’ compulsory savings in pension funds.

Compulsory pension insurance will be introduced in Armenia on January 1, 2014. A four-stage system will be created.