Republic of Armenia
Area: 29,800 sq. km. (11,500 sq. mi.); slightly larger than Maryland. Cities: Capital--Yerevan.
Terrain: High plateau with mountains, little forest land.
Climate: Highland continental, hot summers, cold winters.
Nationality: Noun--Armenian(s). Adjective--Armenian.
Population (unofficial est.): About 2.6 million (Government of Armenia is currently conducting a census, with results due early 2002).
Ethnic groups: Armenian 95%; Kurd 2%; Russian, Greek, and other 3%.
Religion: Armenian Apostolic Church (more than 90% nominally affiliated).
Languages: Armenian (96%), Russian, other.
Health: Infant mortality rate--20/1,000. Life expectancy--72 years.
Work force (1.6 million): Industry and construction--30%; agriculture and forestry--35%; other--35%.
Constitution: Approved in 1995 referendum.
Independence: 1918 (First Armenian Republic); 1991 (from Soviet Union).
Branches: Executive--president (head of state) with wider powers relative to other branches, prime minister (head of cabinet), Council of Ministers (cabinet). Legislative--unicameral National Assembly (parliament). Judicial--Constitutional Court.
Administrative subdivisions: 10 marzer (provinces) in addition to the city of Yerevan, which has the status of a province.
Political parties: Republican Party of Armenia, Armenian Peoples Party, Agro-Technical Peoples Union (formerly Stability Faction), Constitutional Rights Union, Armenian National Movement, National Democratic Union, Republic Party, Social Democratic Union, Liberal Democratic Party, Ramkvar-Christian Democratic Party, Communist Party of Armenia, National Accord Party, Armenian Revolutionary Federation-Dashnaktsutyun, Country of Laws (Orinats Yerkir) Party, plus 84 registered marginal parties, many of which are now dormant.
Suffrage: Universal at 18.
GDP: $1.9 billion.
GDP growth rate: 6%.
Per capita GDP: $503.
Natural resources: Copper, zinc, gold, and lead; hydroelectric power; small amounts of gas and petroleum.
Agriculture: Products--fruits and vegetables, wines, dairy, some livestock.
Industry: Types--chemicals, electronic products, machinery, processed food, synthetic rubber, and textiles.
Trade: Exports--$212 million (75.6% to countries outside the former Soviet Union): precious stones and jewelry 40.4%, machinery and equipment 10.3%, minerals and metals 14.7%, prepared foodstuffs 9.1%. Imports--$542 million (80.4% from countries outside the former Soviet Union): minerals and metals 20.1%, machinery and equipment 13.3%, precious stones and jewelry 12.8%, vegetable products 11.2%. Major trade partners--EU 34.6%, Russia 15.3%, U.S. 11.9%, Iran 9.5%.
The dissolution of the Soviet Union in December 1991 brought an end to the Cold War and created the opportunity to build bilateral relations with the New Independent States (NIS) as they began a political and economic transformation. The U.S. recognized the independence of Armenia on December 25, 1991, and opened an embassy in Yerevan in February 1992.
The United States has made a concerted effort to help Armenia and the other NIS during their difficult transition from totalitarianism and a command economy to democracy and open markets. The cornerstone of this continuing partnership has been the Freedom for Russia and Emerging Eurasian Democracies and Open Markets (FREEDOM) Support Act, enacted in October 1992, under which the U.S. to date has provided nearly $1.2 billion in humanitarian and technical assistance for Armenia.
In addition, the U.S. has played a leading role in the Minsk Group, which was created in 1992 by the Conference of Security and Cooperation in Europe--now the Organization for Security and Cooperation in Europe (OSCE)--to encourage a peaceful, negotiated resolution to the conflict over the Nagorno-Karabakh region. That conflict has cost several thousand lives, created nearly one million refugees and displaced persons, and caused economic hardships for Armenia.
U.S.-Armenian Economic Relations
In 1992 Armenia signed three agreements with the U.S. affecting trade between the two countries. The agreements were ratified by the Armenian parliament in September 1995 and entered into force in the beginning of 1996. They include an "Agreement on Trade Relations," an "Investment Incentive Agreement," and a treaty on the "Reciprocal Encouragement and Protection of Investment" (generally referred to as the Bilateral Investment Treaty, or BIT). Armenia does not have a bilateral taxation treaty with the U.S. The 1994 Law on Foreign Investment governs all direct investments in Armenia, including those from the U.S.
Approximately 70 U.S.-owned firms currently do business in Armenia, including such multinationals as Procter & Gamble, M&M-Mars, Xerox, Dell, and IBM. Recent major U.S. investment projects include the Hotel Armenia, the Hotel Ani; a Greek-owned Coca-Cola bottling plant; petroleum exploration by the American-Armenian Exploration Company; upgrading of the wine and brandy production at Ararat winery; a large perlite mining and processing plant; and the joint venture Jermuk, which produces one of the more popular brands of mineral water in Armenia.
U.S. Support To Build A Market Economy
The U.S. continues to work closely with international financial institutions like the International Monetary Fund (IMF) and the World Bank to help Armenia in its transition to a free-market economy. Armenia has embarked upon an ambitious reform program, which has allowed a gradual transition from humanitarian aid toward more developmental assistance. U.S. economic assistance programs, primarily under the administration of the U.S. Agency for International Development (USAID), have three objectives: to help create a legal, regulatory, and policy framework for competition and economic growth in energy, agriculture, housing, and other sectors; to promote fiscal reform; and to develop a competitive and efficient private financial sector. Other agencies, including the State Department, Peace Corps, Department of Treasury, Customs Service, and the Department of Defense also sponsor various assistance projects. The U.S.-Armenia Task Force, established in 2000, is a bilateral commission that meets every 6 months to review the progress and objectives of U.S. assistance to Armenia.
Specific USAID programs focus on the development of a private sector and small and medium-size enterprises, including microcredit programs; energy sector reform, including preparation for privatization of energy distribution companies; democracy and good governance programs, including the promotion of a well-informed and active civil society; social sector reform, including funding for medical partnerships and social insurance programs; and earthquake zone assistance, which provides housing and economic reactivation for victims of the 1988 earthquake.
The U.S. Department of Agriculture Marketing Assistance Project (MAP) provides advisory services and support to private farmers in all Armenian provinces, facilitates the formation of farmer associations and marketing initiatives, provides micro-credits for agricultural producers, and has laid the groundwork for several agribusiness associations. The U.S. Department of Agriculture's (USDA) Cochran Fellowship Program provides training to Armenian agriculturists. USDA and USAID also have launched efforts to revive production and export of Armenian vegetables, fruits, and other agricultural products.
U.S. Humanitarian Assistance
Over the past decade the U.S. has provided $1.2 billion in assistance to Armenia, the highest per capita amount in the NIS. Humanitarian aid originally accounted for up to 85% of this total, reflecting the economic effects caused by Turkish and Azerbaijani embargoes related to the Nagorno-Karabakh conflict, destruction in northern Armenia left from the devastating 1988 earthquake, and the virtual paralysis of most of the country's factories.
As conditions in Armenia have improved, with the stabilization of the economy and increased energy production--including the restarting of the Armenian Nuclear Power Plant at Metsamor--U.S. assistance programs have moved away from humanitarian goals to longer term development ones. Nevertheless, humanitarian programs, which make up approximately 15% of total assistance in fiscal year 2001, still provide an important source of food, medical supplies, and other necessary items to needy Armenians.
U.S. Support To Achieve Democracy
Technical assistance and training programs have been provided in municipal administration, intergovernmental relations, public affairs, foreign policy, diplomatic training, rule of law, and development of a constitution. Specific programs are targeted at promoting free and fair elections, strengthening political parties, and promoting the establishment of an independent judiciary and independent media. This includes financing for programs that support civil society organizations, local non-governmental organizations (NGO) capacity building, National Assembly professional development, and local and community-level governance.
State Department and USAID educational exchange programs play an important role in supporting democratic and free-market reforms. Assistance in the translation and publication of printed information also has been provided. Exchange programs in the U.S. for Armenian lawyers, judges, political party members, business people, government officials, NGO activists, journalists, and other public figures focus on a range of topics, including the American judicial and political system, privatization, specific business sectors, the media, and civil society. The State Department has funded an ongoing project to provide Internet connectivity to schools at various levels throughout the country; these centers provide both educational and community-building opportunities.
USAID has funded international and domestic groups to monitor national elections. USAID has also funded programs to educate voters and to strengthen the role of an array of civic organizations in the democratic process.
Principal U.S. Embassy Officials
Deputy Chief of Mission--Patricia Moller
Political/Economic Chief--Paul Wickberg
Economic Officer--David Gehrenbeck
Consular Officer--Lily Kosier
Administrative Officer--Robert Bryson
Regional Security Officer--Bartle Gorman
Agricultural Officer--Craig Infanger
USAID Director--Keith Simmons
Public Affairs Officer--John Balian
The U.S. embassy in Yerevan, Armenia is at 18 Marshal Bagramyan; tel: 3741-54-3900 or 3741-52-4661; fax: 3741-52-0800.
Armenia first emerged into history around 800 BC as part of the Kingdom of Urartu or Van, which flourished in the Caucasus and eastern Asia Minor until 600. After the destruction of the Seleucid Empire, the first Armenian state was founded in 190 BC. At its zenith, from 95 to 65 BC, Armenia extended its rule over the entire Caucasus and the area that is now eastern Turkey, Syria and Lebanon. For a time, Armenia was the strongest state in the Roman East. It became part of the Roman Empire in 64 BC and adopted a Western political, philosophical, and religious orientation.
In 301 AD, Armenia became the first nation to adopt Christianity as a state religion, establishing a church that still exists independently of both the Catholic and the Eastern Orthodox churches. During its later political eclipses, Armenia depended on the church to preserve and protect its unique identity. From around 1100 to 1350, the focus of Armenian nationalism moved south, as the Armenian Kingdom of Cilicia, which had close ties to European Crusader states, flourished in southeastern Asia Minor until conquered by Muslim states.
Between the 4th and 19th centuries, Armenia was conquered and ruled by, among others, Persians, Byzantines, Arabs, Mongols, and Turks. For a brief period from 1918 to 1920, it was an independent republic. In late 1920, the communists came to power following an invasion of Armenia by the Red Army, and in 1922, Armenia became part of the Trans-Caucasian Soviet Socialist Republic. In 1936, it became the Armenian Soviet Socialist Republic. Armenia declared its independence from the Soviet Union on September 21, 1991.
GOVERNMENT AND POLITICAL CONDITIONS
Armenians voted overwhelmingly for independence in a September 1991 referendum, followed by a presidential election in October 1991 that gave 83% of the vote to Levon Ter-Petrossian. Ter-Petrossian had been elected head of government in 1990, when the Armenian National Movement defeated the Communist Party. Ter-Petrossian was re-elected in 1996. Following public demonstrations against Ter-Petrossian's policies on Nagorno-Karabakh, the President resigned in January 1998 and was replaced by Prime Minister Robert Kocharian, who was elected President in March 1998. Following the assassination in Parliament of Prime Minister Vazgen Sargsian and parliament Speaker Karen Demirchian and six other officials, on October 27, 1999, a period of political instability ensued during which an opposition headed by elements of the former Armenian National Movement government attempted unsuccessfully to force Kocharian to resign. Kocharian was successful in riding out the unrest. The next presidential elections are slated for 2003.
The unicameral parliament (also called the National Assembly) is dominated by a coalition, called "Unity" (Miasnutyun), between the Republican and Peoples Parties and the Agro-Technical Peoples Union, aided by numerous independents. Dashnaksutyun, which was outlawed by Ter-Petrossian in 1995-96 but legalized again after Ter-Petrossian resigned, also usually supports the government. A new party, the Republic Party, is headed by ex-Prime Minister Aram Sargsian, brother of the late Vazgen Sargsian, and has become the primary voice of the opposition, which also includes the communists, the National Accord Party of Artashes Geghamian, and elements of the former Ter-Petrossian government.
The Government of Armenia's stated aim is to build a Western-style parliamentary democracy as the basis of its form of government. However, international observers have questioned the inherent fairness of parliamentary and presidential elections and constitutional referenda since 1995, citing polling deficiencies, lack of cooperation by the electoral commission, and poor maintenance of electoral lists and polling places. Observers noted, though, that opposition parties and candidates have been able to mount credible campaigns and proper polling procedures have been generally followed. Elections since 1998 have represented an improvement in terms of both fairness and efficiency, although they have not met international standards. The new constitution of 1995 greatly expanded the powers of the executive branch and gives it much more influence over the judiciary and municipal officials.
The observance of human rights in Armenia is uneven and is marked by serious shortcomings. Police brutality still goes largely unreported, while observers note that defendants are often beaten to extract confessions and are denied visits from relatives and lawyers. Public demonstrations usually take place without government interference, though one rally in November 2000 by an opposition party was followed by the arrest and imprisonment for a month of its organizer. Freedom of religion is not always protected under existing law. Nontraditional churches, especially the Jehovah's Witnesses, have been subjected to harassment, sometimes violently. All churches apart from the Armenian Apostolic Church must register with the government, and proselytizing is forbidden by law. The government's policy toward conscientious objection is in transition, as part of Armenia's accession to the Council of Europe. Most of Armenia's ethnic Azeri population was deported in 1988-89 and remain refugees, largely in Azerbaijan. Armenia's record on discrimination toward the few remaining national minorities is generally good. The government does not restrict internal or international travel. Although freedom of the press and speech are guaranteed, the government maintains its monopoly over television and radio broadcasting.
Principal Government Officials
Prime Minister--Andranik Margaryan
Foreign Minister--Vartan Oskanian
Defense Minister - Serge Sargsian
Ambassador to the U.S.--Arman Kirakossian
Ambassador to the UN--Movses Abelian
Armenia's embassy in the U.S. is at 2225 R Street, NW, Washington, DC, 20008; tel: 202-319-1976 or 202-319-2983; fax: 202-319-2984.
Armenia is the second most densely populated of the former Soviet republics. It is a landlocked country between the Black and the Caspian Seas, bordered on the north and east by Georgia and Azerbaijan and on the south and west by Iran and Turkey. Up until independence, Armenia's economy was based largely on industry--chemicals, electronic products, machinery, processed food, synthetic rubber, and textiles--and highly dependent on outside resources. Agriculture accounted for only 20% of net material product and 10% of employment before the breakup of the Soviet Union in 1991. Armenian mines produce copper, zinc, gold, and lead. The vast majority of energy is produced with imported fuel, including gas and nuclear fuel (for its one nuclear power plant) from Russia; the main domestic energy source is hydroelectric. Small amounts of coal, gas, and petroleum have not yet been developed.
Like other New Independent States, Armenia's economy suffers from the legacy of a centrally planned economy and the breakdown of former Soviet trading patterns. Soviet investment in and support of Armenian industry has virtually disappeared, so that few major enterprises are still able to function. In addition, the effects of the 1988 earthquake, which killed more than 25,000 people and made 500,000 homeless, are still being felt. Although a cease-fire has held since 1994, the conflict with Azerbaijan over Nagorno-Karabakh has not been resolved. The consequent blockade along both the Azerbaijani and Turkish borders has devastated the economy, because of Armenia's dependence on outside supplies of energy and most raw materials. Land routes through Azerbaijan and Turkey are closed; routes through Georgia and Iran are inadequate or unreliable. In 1992-93, GDP fell nearly 60% from its 1989 level. The national currency, the dram, suffered hyperinflation for the first few years after its introduction in 1993.
Nevertheless, the Government of Armenia, helped by the cease-fire that has been in effect in Nagorno-Karabakh since 1994, has been able to carry out wideranging economic reforms which paid off in dramatically lower inflation and steady growth. Armenia has registered strong economic growth since 1995, building on the turnaround that began the previous year, and inflation has been negligible for the past several years. New sectors, such as precious stone processing and jewelry making, information and communication technology, and even tourism are beginning to supplement more traditional sectors such as agriculture in the economy.
This steady economic progress has earned Armenia increasing support from international institutions. The IMF, World Bank, EBRD, as well as other IFIs and foreign countries are extending considerable grants and loans. Total loans extended to Armenia since 1993 exceed $800 million. These loans are targeted at reducing the budget deficit, stabilizing the local currency; developing private businesses; energy; the agriculture, food processing, transportation, and health and education sectors; and ongoing rehabilitation work in the earthquake zone.
Continued progress will depend on the ability of the government to strengthen its macroeconomic management, including increasing revenue collection, improve the investment climate, and accelerate the privatization process. A liberal foreign investment law was approved in June 1994, and a Law on Privatization was adopted in 1997, as well as a program on state property privatization. The government has made major strides toward joining the World Trade Organization.
Armenia is trying to address its environmental problems. It has established a Ministry of Environment and has introduced a pollution fee system by which taxes are levied on air and water emissions and solid waste disposal, with the resulting revenues used for environmental protection activities. Armenia is interested in cooperating with other members of the Commonwealth of Independent States (a group of 12 former Soviet republics) and with members of the international community on environmental issues. The Armenian Government is working toward closing the Armenian Nuclear Power Plant as soon as alternate energy sources can be identified.
DEFENSE AND MILITARY ISSUES
Armenia established a Ministry of Defense in 1992. Border guards subject to the Ministry patrol Armenia's borders with Georgia and Azerbaijan, while Russian troops continue to monitor its borders with Iran and Turkey.
The Conventional Armed Forces in Europe (CFE) Treaty was ratified by the Armenian parliament in July 1992. The treaty establishes comprehensive limits on key categories of military equipment, such as tanks, artillery, armored combat vehicles, combat aircraft, and combat helicopters, and provides for the destruction of weaponry in excess of those limits. Armenian officials have consistently expressed determination to comply with its provisions. Armenia has provided data on armaments as required under the CFE Treaty. There are indications that Armenia is trying to establish mechanisms to ensure fulfillment of its arms control obligations. Armenia is not a significant exporter of conventional weapons, but it has provided substantial support, including materiel, to separatists in Nagorno-Karabakh.
In March 1993, Armenia signed the multilateral Chemical Weapons Convention, which calls for the eventual elimination of chemical weapons. Armenia acceded to the nuclear Non-Proliferation Treaty as a non-nuclear weapons state in July 1993. The U.S. and other Western governments have discussed efforts to establish effective nuclear export control systems with Armenia.
Armenia is a member of the Commonwealth of Independent States, the United Nations, the Council of Europe, the Organization for Security and Cooperation in Europe, NATO's Partnership for Peace, the North Atlantic Cooperation Council, the International Monetary Fund, and the International Bank for Reconstruction and Development.
In 1988, the territory of Nagorno-Karabakh, a predominantly ethnic Armenian enclave within Azerbaijan, voted to secede and join Armenia. This eventually developed into a full-scale armed conflict. Armenian support for the separatists led to an economic embargo by Azerbaijan, which has crippled Armenia's foreign trade and restricted its imports of food and fuel, three-quarters of which transited Azerbaijan under Soviet rule.
Peace talks in early 1993 were disrupted by the seizure of Azerbaijan's Kelbajar district by Nagorno-Karabakh Armenian forces and the forced evacuation of thousands of ethnic Azeris. Turkey in protest then followed with an embargo of its own against Armenia. A cease-fire was declared between Azeri and Armenian/N-K forces in 1994 and has been maintained by both sides since then in spite of occasional shooting along the line of contact between the two. All Armenian governments have thus far resisted domestic pressure to recognize the self-proclaimed independence of the "Nagorno-Karabakh Republic," while at the same time announcing they would not accept any peace accords that returned the enclave to Azerbaijani rule. Some 750,000 ethnic Azeris who fled during the Karabakhi offensives still live as internally displaced persons in Azerbaijan, while roughly 400,000 ethnic Armenians who fled Azerbaijan since 1988 remain refugees, although around 35,000 have accepted Armenian citizenship since 1998.
Negotiations to peacefully resolve the conflict have been ongoing since 1992 under the aegis of the Minsk Group of the OSCE. The Minsk Group is currently co-chaired by the U.S., France, and Russia and comprises Armenia, Azerbaijan, Turkey, the U.S., several western European nations, and representatives of the Armenian and Azeri communities of Nagorno-Karabakh. The talks have focused on the status of Nagorno-Karabakh, the return of refugees, the lifting of blockades, the withdrawal from occupied territories, and the status of the Lachin corridor, which connects Nagorno-Karabakh to Armenia.
Karabakhi Armenians, supported by the Republic of Armenia, now hold about 15% of Azerbaijan and have refused to withdraw from occupied territories until an agreement on the status of Nagorno-Karabakh is reached. Armenia and Azerbaijan continue to observe the cease-fire which has been in effect since May 1994, and in late 1995 both also agreed to OSCE field representatives being based in Tbilisi, Georgia, to monitor the cease-fire and facilitate the peace process.