Payback time: Many bilked depositors recover a fraction of their losses; a majority vexed at process mechanics

Payback time: Many bilked depositors recover a fraction of their losses; a majority vexed at process mechanics


How much is a rouble worth?

Despite the pre-election and post-election turmoil, compensations of lost Soviet-era bank savings were paid to more than 1,600 citizens in February. But many of the bilked depositors still remain angry at what they feel is an unfair process in terms of compensation amounts and prioritization.

A total of 1.3 billion drams (or nearly $4.3 million) had been earmarked for such compensatory payments in the course of 2008, which is by 300 million drams more than the sum spent for the purpose during the previous year.

“Since this year’s sum exceeds last year’s, it can be said with confidence that it will be possible to compensate savings of more people this year,” Armen Margaryan, of the Ministry of Labor and Social Affairs, says.

A total of 10,472 citizens out of 60,000 on the roll received compensations in the period from August 2006 to December 2007 inclusive.

According to the savings compensation order defined in the government program, a lost saving of up to 1,000 Soviet rubles is compensated with 84,000 drams (or $275); in case of 1,000-3,000 rubles it is 84,000 drams plus the amount in excess of 1,000 rubles multiplied by 29.4 drams; in case of 3,000-5,000 rubles - 142,800 drams (or $465) plus the amount exceeding 3,000 rubles multiplied by 16.8 drams; in case of 5,000-10,000 rubles – 176,400 drams ($575) plus the amount exceeding 5,000 rubles multiplied by 8 drams; if the lost savings amounted to a sum exceeding 10,000 rubles, then the compensation is 216,400 drams ($710) plus the amount exceeding 10,000 rubles multiplied by 4 drams.

Thus, if a person lost 1,000 rubles on the accounts of the defunct Soviet bank, the sum due to be paid to him or her is $275; if s/he lost 10,000 rubles, then s/he is paid $710, if s/he lost 11,000 rubles s/he is paid $720.

Margaryan, who heads the methodical assistance division at the Ministry’s department of social assistance, says that people have to consider that it is not a return of lost savings, but only compensation.

“It is only aid from the state, the debt of the Republic of Armenia is not repaid with this,” he explains. “People’s displeasure with the amount of compensation is understandable, as they make comparisons and see that with 1,000 rubles in the Soviet Union they could buy 1,000 kilos of granulated sugar.”

Now, with $275 given per 1,000 rubles people can purchase 350 kilograms of granulated sugar, and with $950 given for 11,000 rubles they can buy 950 kilograms.

Even though displeased with the size of payments, many say they feel at least they get something, since they had lost all hope for compensation before the process began. So-called prioritized groups seem to cause more discontent for now.

More than a thousand lucky bilked depositors who received compensations for their lost savings in 2006 and 2007 are above 70, live in borderline and/or disaster zones and are also registered as beneficiaries of the social allowance system.

Per this priority system, the first group is followed by single pensioners, then by senior citizens aged up to 70, World War II veterans and disabled, participants in the defense of the Republic of Armenia in 1990-1994.

Roza Vardevanyan, an 80-year-old refugee from Azerbaijan, last year came to Armenia from the Russian city of Rostov where she lived at her daughter’s, since she does not have a home of her own here. Failing to receive the 232400 drams ($760) compensation due for the 14,000 rubles she lost in the Soviet bank she had to go back to Russia, “empty-handed”.

“They said she was not a social beneficiary and she was not entitled to that compensation. But how could she possibly be a beneficiary if she had no home here? She lived on the basement floor of an [industrial company’s] administrative building, and when she was evicted from there, she had to go to my sister’s home, because I had no opportunity to take care of her,” says Roza’s daughter Margo.

Nina Kolesnikova, 83, is not in the top group either, because she is not a beneficiary. “I had 16,000 rubles kept in the Savings Bank, and they did some machinations not to pay that money to us in the first turn. They passed a law for us to meet nine requirements – to be disabled, to be alone, and others, and considering only the circumstance that we have been removed from the Paros [state social assistance program] beneficiary list, they do not give us that money,” the woman, who had worked as a journalist for 46 years, says crossly.

According to the priority order, she and her husband are in the second group and are likely to receive their compensations already within this year.

But 56-year-old Shoghik Stepanyan has absolutely no idea when she will become eligible for her 20,000-ruble compensation. She is disabled, i.e. according to the priority scheme is only in the fourth group.

“I am disabled and work as a cleaner to pay my daughter’s student fee. Instead of raising pensions by 60 percent, let them give my money back,” says Shoghik.

About a million Armenians had bank savings totaling some 6.5 billion rubles at the time when the Soviet Union collapsed. According to the official exchange rates valid for the late 1980s, that money was equivalent to up to $6 billion, by their market value then to about $800 million.

The savings compensation process began in summer 2005 with specification of terms and dates, priority target groups and compensation amounts, which lasted for nearly a year. The payment of compensation proper began in summer 2006 and is due for completion by 2015.

Ministry representative Margaryan says that people possessing several savings-bank books some of which are not verifiable complicates the process. He also explains that it is incumbent on citizens to produce documental proof of the amount of savings they lost and that amount must be confirmed by the Savings Bank.

A large number of people, though, have not enrolled in the compensation process to avoid such procrastinations. Many of them do not even believe they would get any compensation ever.

“This has been going on for several years now. But who believes it? I know so many people who were not paid. So why should I even bother? I haven’t even applied,” says 46-year-old Zhenya Vardanyan, who had saved 17,000 rubles on her Soviet bank account but lost all savings after the fall of the Empire.