Drawing more investment to Armenia is one of the key issues that is repeatedly emphasized across different platforms. Government and the banking sector stakeholders consistently highlight the urgent need for capital inflows to drive growth, finance infrastructure, and stimulate innovation.

Yet attracting sustainable investment is not a simple task for emerging markets like Armenia, where the range of financial instruments and investment products remains relatively narrow. This structural limitation makes it harder to generate the liquidity and investor confidence needed to expand the market.

As Olivier Rousseau, former Chairman of the Investment Board of the Pension Agency of Georgia (Tbilisi), explains, the lack of a broad spectrum of investment products in Armenia creates a cycle that discourages both domestic and foreign participation.

“The problem of many emerging markets is that they do not have much liquidity in the domestic market. This results in a very limited offer of different investment products. Thus, the foreigners are not very interested, just as the locals. The presence of domestic investors triggers more foreign investment and vice versa. So, you need to start the engine to prime the pump. And here I see that the creation of a funded pension system, which is a powerful mechanism,” the expert says.

During the upcoming Power Consulting Days (PCD) program organized by BDO Armenia and Orion Worldwide Innovations, Rousseau will share his insights on how Armenia can broaden its investment landscape and strengthen capital markets, drawing from his extensive experience in Georgia and beyond. 

The Role of Alternative Investments

Despite the growth in numbers in the global market, the volume of alternative investments in Armenia is significantly low. According to 2022 data, the volumes of alternative investments in Armenia were eighteen times less than traditional investments.

The expert cautions that while alternatives play a role, they cannot emerge successfully without first establishing the basics, such as listed equities, bonds, and some unlisted illiquid assets.

“If you have professional investors, then they can invest in listed and private assets,” Rousseau says. These investors create the ecosystem necessary for both traditional and alternative markets to thrive. 

Pension Funds as Market Movers

Rousseau believes the size of the funded pension system in Armenia could be increased.

“You need to have powerful domestic institutions that can take very big stakes in new issues and new products. And here, a public pension fund is very handy. If the government wants things to happen, it can put in place the legal framework that gives a lot of freedom to the pension funds. There are very few listed companies on the stock exchange in Armenia, while the public pension fund could make new companies appear on the listings,” he says.

The Cornerstone Role of Bonds

Rousseaul, whose career spanned global roles at BNP Paribas, the European Bank for Reconstruction and Development (EBRD), emphasizes the role of public bond issuance as the cornerstone of financial markets. Establishing a reliable public interest rate curve across different maturities is critical not only for the bond market but also for pricing equities and private investments.

He believes that without a clear benchmark, investors apply higher risk premiums, making financing more expensive and less predictable. By contrast, a robust bond market provides stability and reduces uncertainty, encouraging broader participation from private and institutional investors.

“If you don't have a valid liquid reference, people will still buy equities, people will still do lending, but they will take a risk premium because they don't know where the interest rates should really be,” Rousseau says.

A New Era of Capital Markets

Looking beyond Armenia, the global investment climate has been described as unstable due to geopolitical instability across many regions. 

In Rousseau’s view, the world is not merely experiencing temporary volatility but entering a new era marked by reduced globalization and increased regionalization.

“The trust has been badly shaken everywhere. The concept of confident globalization, be it on the trade of goods and services or investments, is a dead thing. What will replace it is a more regional sphere for trade and investments,” he says.

In such a landscape, channeling private savings into pension funds and mutual investment vehicles becomes even more essential, particularly for emerging economies facing geopolitical instability.

Rousseau warns against relying too much on solutions coming from abroad. Political pressures often undermine long-term financial strategies. Instead, he argues, private savings and professional pension management can provide the resilience and independence that economies like Armenia would very much benefit from.

The Power Consulting Days program, which delivers deep professional expertise and knowledge, is implemented by BDO Armenia, a member of BDO International Limited, one of the world's largest audit, tax, and consulting networks, and Orion Worldwide Innovations, a hub for startup growth and ecosystem acceleration. The Central Bank of Armenia is the Organizational Partner of the PCD program, and the Swiss development organization Helvetas is the General Partner. 

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