CAN ARMENIA BECOME A FINANCIAL CENTER?
Vasak Tarposhyan

Hayots Ashkhar Daily
Published on May 27, 2008
Armenia

"Armenia has real potential to become a financial center in the region.

I strongly believe in this prospect and I’m sure this idea must become
the guideline of our work in the coming years," the president announced
during the first financial banking conference hold in Dilijan.

Though the idea to become a financial center in the region is far
not new, such high level announcement has been made for the first
time. The important thing is that practical steps are already being
made in this direction and the construction of the Funding Exchange
and Central Bank Study Center in Dilijan testifies to this fact.

Thus in essence not only the base of the formation of the regional
financial-study center is laid, but also the first steps are taken
for the country’s proportional development. It is not a secret that
the economy is strictly centralized in Yerevan.

To become a financial center, Armenia really has a dynamically
developed and a stable banking system. A productive legislative
field is formed for the banking activity, which has created favorable
conditions for the flow of the foreign investments in our country. The
positive developments in this direction are evident. Especially during
the recent one-two years a serious interest of foreign capital towards
Armenian is really noticeable. Whereas not only the capital of the
existing banks is completed by the foreign financial means but there
is also a requirement to open new banks.

The factor of the Diaspora is a very good advantage for Armenia to
become a financial center. To make this advantage practical the idea
of establishing a pan-Armenian bank has been proposed, which needs
to be discussed.

Prime Minister Tigran Sargsyan says the existence of the professional
potential is also a great advantage for Armenia to become a financial
center. And, the most important thing is that the readiness to become
such a center is the basis of the political will to make necessary
reforms.

Of course we can’t say that all the conditions exist in Armenia,
in order to become a financial center. There are lot’s of problems
that we must solve. The most important problem here is the one linked
with the currency market. The steps taken in this sphere during the
recent years didn’t give any positive results; the currency market is
not completely accomplished. But the steps taken in this direction
inspire hope that the situation will change very swiftly. Last year
a famous intentional company managed Armenia’s funding exchange. The
entrance of Stockholm exchange can finally promote the accomplishment
of the currency market in Armenia.

The next obstacle is linked with the accumulated pensions and
investment funds, which are not formulated in Armenia.

It is worth mentioning that Georgia also pretends to become financial
center of the region. Of course Armenia’s banking system is one
step forward from the Georgian, but during the recent years serious
reforms are being made in Georgia’s banking system, which can change
the situation.

But Armenia must do its best to achieve its goal otherwise tomorrow
it will be very late.