By David Stepanyan, Yerevan. Exclusively for Vestnik Kavkaza
A large crowd of demonstrators has recently gathered at the Armenian government again. The familiar banners of mothers of soldiers killed during peaceful military service, residents of the Dalma Gardens District driven out of their homes, and Nairit workers demanding higher wages have been supplemented by banners of activists protesting against the accumulative pension system. Banners show such slogans as ‘Stop obligatory racketeering!’, ‘Stop robbery!’, ‘Get your hands of our wages!’ After the announcement of young people to continue the struggle for scrapping of the pension system that ‘legally’ robs the population, Deputy Police Chief Valery Osipyan took personal command of the police officers in the area.
The plans of the government to oblige people to save for their pensions caused a public outrage. The accumulative pension system has lots of conflicts with the Constitution. For example, only people with at least 10 years of work records will get a pension, people with 5-year records will get no social support. Serious risks lie in the government’s plan to manage 40% of pension assets abroad, considering that another global financial recession could turn the funds into dust.
It is unclear why years of university studies, maternity leave, obligatory military service are not included in the work records. It is unclear why people born after 1974 must not only save for their pension but also finance pensions for half a million of existing pensioners. It is hard to explain to a person earning $150-200 a month and hardly making both ends meet why he or she should give up 7% of his or her income, especially in the context of constantly rising prices for basic goods.
The obligatory accumulative pension system is certainly more fair than the existing system when all pensioners receive about the same pensions regardless of wages and years spent working. In some Western states, the system has been a success for years. But the system there is a result of many years of a voluntary system, improvement of living standards, independent from relatively low corruption rates. Imagining such idyll in Armenia today is almost impossible. Thus, depriving a living and working Armenian of more parts of low income would mean encouragement of migration. The government is totally destroying people’s trust in its promises.
According to the Minister for Finances David Sarkisyan, the new pension assets worth 41-44 billion drams a year will be managed by France’s AMUNDI (a subsidiary of Societe Generale and Credit Agricole) and Thalanks Asset Management, an affiliate of Germany’s C-Quadrat. AMUNDI assets are worth $1.3 trillion, C-Quadrat $500 billion. In reality, the government is clearly to make profit from circulation of the ‘pension’ funds and gain extra GDP ‘growth.’
