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ANCA VOICES RESERVATIONS OVER US ADVOCACY FOR ARMENIA'S CONTROVERSIAL PENSION REFORM
http://asbarez.com/120241/anca-voices-reservations-over-us-advocacy-for-armenia%E2%80%99s-controversial-pension-reform/
Wednesday, March 5th, 2014
Calls for U.S. to Remain Neutral on Armenia's Pension Debate; Support
Exploration of Alternative Models of Reform
WASHINGTON--The Armenian National Committee of America is engaged in
ongoing discussions with the State Department and the U.S. Agency for
International Development regarding Armenian American concerns about
the negative impact of high-profile U.S. advocacy for increasingly
controversial pension reforms in Armenia.
"As Armenian Americans, core stakeholders in both the U.S.-Armenia
relationship and the enduring friendship of the American and
Armenian peoples, we are seriously concerned that our government's
vocal support for this controversial pension reform is needlessly
straining America's strong standing in Armenia," said Aram Hamparian,
ANCA Executive Director. "We look forward to continuing our engagement
and remain hopeful that common-sense, middle-ground solutions will
emerge - in terms of both the substance of policy and the democratic
process of their implementation - that will work for all the people
of Armenia and serve to further strengthen American-Armenian ties."
The ANCA, in meeting with U.S. officials last week, shared a detailed
analysis, prepared by economist Dr. Ara Khanjian of Ventura College,
regarding the shortcomings of the reform program being publicly
endorsed by the U.S. Embassy and USAID. Dr. Khanjian, who took part
in the meeting, provided a point-by-point review of the serious
shortcomings of the extreme model being backed by the United States.
While all stakeholders agree that the old pension system needs
reform, there is broad-based opposition in Armenia and among Armenians
worldwide to a 100% privatization of pensions. U.S. support for this
extreme model, embraced by only five other countries, comes despite
President Obama's ardent opposition to even relatively modest efforts,
under President George W. Bush, to privatize a small percentage of
Social Security. A majority of the Senate and House also opposed any
privatization of Social Security in the U.S.
The level of U.S. advocacy for this pension reform model is widely
viewed, in Armenia and the U.S., as potentially harming America's
standing in Armenia. The U.S. position on this measure is also seen
as running counter to a number of values prioritized by USAID in its
FY 2013-2017 Country Development Cooperation Strategy for Armenia,
including transparency, consensus-based policy-making, and responsive
and accountable governance. Read the USAID strategy document.
While there is broad consensus that the old pension system was deeply
flawed and needed replacement, only very narrow support exists for
the extreme model adopted by Armenia's ruling party.
As a remedy, the ANCA is proposing that the U.S. government should
refrain from further public endorsements of this controversial
reform and, instead, publicly support an open exploration - among
political leaders and the general public - of alternate reform
models - including U.S. Social Security, hybrid systems, and the
total privatization model.
Background: The pension system adopted by Armenia's ruling party and
endorsed by the U.S. government is an extreme model, in which 100%
of pension or social security taxes are allocated to individual
private pension accounts. Internationally, there just five other
countries with such an extreme pension model: Chile, El Salvador,
Mexico, Kazakhstan and Nigeria, and the global trend, since the 2008
economic crisis, has been for governments to move decisively away from
privatization. The analysis prepared by Dr. Khanjian covered a broad
array of problems inherent in extreme pension reforms - many shared
by the IMF and the World Bank - including financial market and labor
market risk, adverse impact upon women, budgetary considerations,
increased fees, and lack of sufficient regulatory oversight. Within
Armenia, he noted, no significant political leader outside the ruling
party supported this reform, while the previous president and every
opposition party represented in Parliament opposes its implementation.
http://asbarez.com/120241/anca-voices-reservations-over-us-advocacy-for-armenia%E2%80%99s-controversial-pension-reform/
Wednesday, March 5th, 2014
Calls for U.S. to Remain Neutral on Armenia's Pension Debate; Support
Exploration of Alternative Models of Reform
WASHINGTON--The Armenian National Committee of America is engaged in
ongoing discussions with the State Department and the U.S. Agency for
International Development regarding Armenian American concerns about
the negative impact of high-profile U.S. advocacy for increasingly
controversial pension reforms in Armenia.
"As Armenian Americans, core stakeholders in both the U.S.-Armenia
relationship and the enduring friendship of the American and
Armenian peoples, we are seriously concerned that our government's
vocal support for this controversial pension reform is needlessly
straining America's strong standing in Armenia," said Aram Hamparian,
ANCA Executive Director. "We look forward to continuing our engagement
and remain hopeful that common-sense, middle-ground solutions will
emerge - in terms of both the substance of policy and the democratic
process of their implementation - that will work for all the people
of Armenia and serve to further strengthen American-Armenian ties."
The ANCA, in meeting with U.S. officials last week, shared a detailed
analysis, prepared by economist Dr. Ara Khanjian of Ventura College,
regarding the shortcomings of the reform program being publicly
endorsed by the U.S. Embassy and USAID. Dr. Khanjian, who took part
in the meeting, provided a point-by-point review of the serious
shortcomings of the extreme model being backed by the United States.
While all stakeholders agree that the old pension system needs
reform, there is broad-based opposition in Armenia and among Armenians
worldwide to a 100% privatization of pensions. U.S. support for this
extreme model, embraced by only five other countries, comes despite
President Obama's ardent opposition to even relatively modest efforts,
under President George W. Bush, to privatize a small percentage of
Social Security. A majority of the Senate and House also opposed any
privatization of Social Security in the U.S.
The level of U.S. advocacy for this pension reform model is widely
viewed, in Armenia and the U.S., as potentially harming America's
standing in Armenia. The U.S. position on this measure is also seen
as running counter to a number of values prioritized by USAID in its
FY 2013-2017 Country Development Cooperation Strategy for Armenia,
including transparency, consensus-based policy-making, and responsive
and accountable governance. Read the USAID strategy document.
While there is broad consensus that the old pension system was deeply
flawed and needed replacement, only very narrow support exists for
the extreme model adopted by Armenia's ruling party.
As a remedy, the ANCA is proposing that the U.S. government should
refrain from further public endorsements of this controversial
reform and, instead, publicly support an open exploration - among
political leaders and the general public - of alternate reform
models - including U.S. Social Security, hybrid systems, and the
total privatization model.
Background: The pension system adopted by Armenia's ruling party and
endorsed by the U.S. government is an extreme model, in which 100%
of pension or social security taxes are allocated to individual
private pension accounts. Internationally, there just five other
countries with such an extreme pension model: Chile, El Salvador,
Mexico, Kazakhstan and Nigeria, and the global trend, since the 2008
economic crisis, has been for governments to move decisively away from
privatization. The analysis prepared by Dr. Khanjian covered a broad
array of problems inherent in extreme pension reforms - many shared
by the IMF and the World Bank - including financial market and labor
market risk, adverse impact upon women, budgetary considerations,
increased fees, and lack of sufficient regulatory oversight. Within
Armenia, he noted, no significant political leader outside the ruling
party supported this reform, while the previous president and every
opposition party represented in Parliament opposes its implementation.