Congratulations to Armenia on the tenth anniversary of its 2014 pension reform, which gives workers the opportunity to save for their retirement and become owners.

 

I remember when, in January 2011, Eduardo Eurnekian, a prominent Argentine-Armenian businessman, traveled from Buenos Aires to Santiago to ask me if I would accept an invitation from the Prime Minister of Armenia to visit the country and help create an individual capitalization pension system. Before discussing the logistics of a 32,000-kilometer round trip from Santiago to Yerevan, I asked Eduardo about Armenia's economic and political situation.

 

Thus, what began as a one-hour lunch turned into a three-hour conversation about his life and connection to Armenia, giving rise to a lasting friendship. I gladly accepted the invitation and offered my time and expertise pro bono, as a gift to the long-suffering Armenian people.

 

On February 4, 2011, I received the official invitation letter from Prime Minister Tigran Sargsyan (see box). The visit took place in May 2011. On the very first day, I had a very productive conversation with the Prime Minister, who at the end asked me to present the Chilean system to his entire cabinet.

 

The next day, at a conference at the Central Bank, I made a detailed presentation on the creation of the capitalization system in Chile. Nerses Yeritsyan, Vice President of the Bank and leader of the reform team, led the analysis session with government experts and civil society. The discussions were exhaustive, addressing all topics in a productive exchange.

 

When I left Yerevan after this intense week, I was optimistic. The government was committed to carrying out a structural reform, backed by a team of professionals capable of designing the details of the new system, adapted to Armenia's particularities, and drafting the pension system reform bill.

 

I kept in touch with Nerses Yeritsyan by email on technical matters and returned to Yerevan in September 2012. Convinced of the power of ideas, during this second visit I focused on explaining the Chilean system through television interviews and the press, addressing the inevitable doubts and criticisms that arise with any structural reform. We translated one of my key essays on pension reform and published it in Armenian, highlighting the concept, operation, transition, and results of the Chilean model.

 

This time I asked to visit several notable places, including the Holocaust Memorial; Etchmiadzin, the spiritual center of the Armenian Apostolic Church; the TUMO Center for Creative Technologies; and the University of Yerevan, whose president gave me beautiful maps of Ancient Greater Armenia.

 

When I was asked to write this congratulatory note for a book they will publish on the pension reform on its tenth anniversary, all these wonderful memories came back to my mind.

Recently, Klaus Schmidt-Hebbel, former chief economist of the OECD, wrote an article in the Chilean press highlighting that, since the pioneering Chilean reform in 1980, 51 countries have adopted a capitalization pillar in their pension systems totally or partially.

 

While many Western European countries with broken and underfunded pension systems do not dare to move in this direction, a decade ago Armenia was visionary and brave.