Armenia   (help·info) (Armenian: transliterated: Hayastan, IPA: ), officially the Republic of Armenia , Hayastani Hanrapetut’yun, ), is a landlocked mountainous country in the Caucasus region of Eurasia. Situated at the juncture of Western Asia and Eastern Europe, it is bordered by Turkey to the west, Georgia to the north, the de facto independent Nagorno-Karabakh Republic and Azerbaijan to the east, and Iran and the Azerbaijani exclave of Nakhchivan to the south.

A former republic of the Soviet Union, Armenia is a unitary, multiparty, democratic nation-state with an ancient and historic cultural heritage. The Kingdom of Armenia was the first state to adopt Christianity as its religion in the early years of the 4th century (the traditional date is 301). The modern Republic of Armenia recognizes the Armenian Apostolic Church as the national church of Armenia, although the republic has separation of church and state with the Armenian Apostolic Church liable to the laws of the state.

Armenia is a member of more than 40 international organisations, including the United Nations, the Council of Europe, the Asian Development Bank, the Commonwealth of Independent States, the World Trade Organization, the Organization of the Black Sea Economic Cooperation, and La Francophonie. It is a member of the CSTO military alliance, and also participates in NATO's Partnership for Peace (PfP) programme. In 2004 its forces joined KFOR, a NATO-led international force in Kosovo. It is also an observer member of the Eurasian Economic Community and the Non-Aligned Movement. The country is an emerging democracy. Armenia is classified as a country with medium human development and 10.6% of the population live below the international poverty line of US$1.25 a day

Armernia

Armenia

The Kingdom of Armenia at its greatest extent under Tigranes the Great, who reigned between 95 and 66 BC

Armenia lies in the highlands surrounding the Biblical mountains of Ararat, upon which, according to the Bible, Noah's Ark came to rest after the flood. (Gen. 8:4). In the Bronze Age, several states flourished in the area of Greater Armenia, including the Hittite Empire (at the height of its power), Mitanni (South-Western historical Armenia), and Hayasa-Azzi (1500–1200 BC). Then, the Nairi people (twelfth to ninth centuries BC) and the Kingdom of Urartu (1000–600 BC) successively established their sovereignty over the Armenian Highland. Each of the aforementioned nations and tribes participated in the ethnogenesis of the Armenian people. Yerevan, the modern capital of Armenia, was founded in 782 BC by king Argishti I.

 
The historical Orontid site of Karmir Blur (Red Hill), Teishebaini, near YerevanAround 600 BC, the Kingdom of Armenia was established under the Orontid Dynasty. The kingdom reached its height between 95 and 66 BC under Tigranes the Great, becoming one of the most powerful kingdoms of its time within the region. Throughout its history, the kingdom of Armenia enjoyed periods of independence intermitted with periods

The historical Orontid site of Karmir Blur (Red Hill), Teishebaini, near Yerevan

of autonomy subject to contemporary empires. Armenia's strategic location between two continents has subjected it to invasions by many peoples, including the Assyrians, Greeks, Romans, Byzantines, Arabs, Mongols, Persians, Ottoman Turks and Russians.

Armenia was historically Mazdean Zoroastrian (as opposed to the Zurvanite Sassanid dynasty), particularly focused on the worship of Mihr (Avestan Mithra), and Christianity spread into the country as early as AD 40. King Tiridates III (AD 238–314) made Christianity the state religion in AD 301, becoming the first officially Christian state, ten years before the Roman Empire granted Christianity an official toleration under Galerius, and 36 years before Constantine the Great was baptized.

After the fall of the Armenian kingdom in AD 428, most of Armenia was incorporated as a marzpanate within the Sassanid Empire. Following an Armenian rebellion in AD 451, Christian Armenians maintained their religious freedom, while Armenia gained autonomy.

History

After the Marzpanate period (428–636), Armenia emerged as the Emirate of Armenia, an autonomous principality within the Arabic Empire, reuniting Armenian lands previously taken by the Byzantine Empire as well. The principality was ruled by the Prince of Armenia, recognised by the Caliph and the Byzantine Emperor. It was part of the administrative division/emirate Arminiyya created by the Arabs, which also included parts of Georgia and Caucasian Albania, and had its center in the Armenian city Dvin. The Principality of Armenia lasted until 884, when it regained its independence from the

The Kingdom of Cilician Armenia, 1199–1375

weakened Arabic Empire.

 
The Kingdom of Cilician Armenia, 1199–1375The re-emergent Armenian kingdom was ruled by the Bagratuni dynasty, and lasted until 1045. In time, several areas of the Bagratid Armenia separated as independent kingdoms and principalities such as the Kingdom of Vaspurakan ruled by the House of Artsruni, while still recognizing the supremacy of the Bagratid kings.

In 1045, the Byzantine Empire conquered Bagratid Armenia. Soon, the other Armenian states fell under Byzantine control as well. The Byzantine rule was short lived, as in 1071 Seljuk Turks defeated the Byzantines and conquered Armenia at the Battle of Manzikert, establishing the Seljuk Empire. To escape death or servitude at the hands of those who had assassinated his relative, Gagik II, King of Ani, an Armenian named Roupen went with some of his countrymen into the gorges of the Taurus Mountains and then into Tarsus of Cilicia. The Byzantine governor of the palace gave them shelter where the Armenian Kingdom of Cilicia was eventually established.

The Seljuk Empire soon started to collapse. In the early 1100s, Armenian princes of the Zakarid noble family established a semi-independent Armenian principality in Northern and Eastern Armenia, known as Zakarid Armenia, lasted under patronages of Seljuks, Georgian Kingdom, Atabegs of Azerbaijan and Khwarezmid Empire. The noble family of Orbelians shared control with the Zakarids in various parts of the country, especially in Syunik and Vayots Dzor

Middle Ages

During the 1230s, the Mongol Empire conquered the Zakaryan Principality, as well as the rest of Armenia. Armenian soldiers formed an important part of the military of the Ilkhanate.[citation needed] The Mongolian invasions were soon followed by those of other Central Asian tribes (Kara Koyunlu, Timurid and Ak Koyunlu), which continued from the 1200s until the 1400s. After incessant invasions, each bringing destruction to the country, Armenia in time became weakened. During the 1500s, the Ottoman Empire and Safavid Persia divided Armenia among themselves. The Russian Empire later incorporated Eastern Armenia (consisting of the Erivan[citation needed] and Karabakh khanates[citation needed] within Persia) in 1813 and 1828

Under Ottoman rule, the Armenians were granted considerable autonomy within their own enclaves and lived in relative harmony with other groups in the empire (including the ruling Turks). However, as Christians under a strict Muslim social system, Armenians faced pervasive discrimination. When they began pushing for more rights within the Ottoman Empire, Sultan ‘Abdu’l-Hamid II, in response, organised state-sponsored massacres against the Armenians between 1894 and 1896, resulting in an estimated death toll of 80,000 to 300,000 people. The Hamidian massacres, as they came to be known, gave Hamid international infamy as the "Red Sultan" or "Bloody Sultan".

As the Ottoman Empire began to collapse, the Young Turk Revolution (1908) overthrew the government of Sultan Hamid. Armenians living in the empire hoped that the Committee of Union and Progress would change their second-class status. Armenian reform package (1914) was presented as a solution by appointing an inspector general over Armenian issues

When World War I broke out leading to confrontation of the Ottoman Empire and the Russian Empire in the Caucasus and Persian Campaigns, the new government in Constantinople began to look on the Armenians with distrust and suspicion. This was due to the fact that the Russian army contained a contingent of Armenian volunteers. On April 24, 1915, Armenian intellectuals were arrested by Ottoman authorities and, with the Tehcir Law (29 May 1915), eventually a large proportion of Armenians living in Anatolia perished in what has become known as the Armenian Genocide.

There was local Armenian resistance in the region, developed against the activities of the Ottoman Empire. The events of 1915 to 1917 are regarded by Armenians and the vast majority of Western historians to have been state-sponsored mass killings, or genocide. Turkish authorities, however, maintain that the deaths were the result of a civil war coupled with disease and famine, with casualties incurred by both sides. According to the research conducted by Arnold J. Toynbee an estimated 600,000 Armenians died during the Armenian Genocide in 1915–16.

According to the International Association of Genocide Scholars, the death toll was "more than a million". Armenia and the Armenian diaspora have been campaigning for official recognition of the events as genocide for over 30 years. These events are traditionally commemorated yearly on April 24, the Armenian Martyr Day, or the Day of the Armenian Genocide

World War I and the Armenian Genocide

Although the Russian army succeeded in gaining most of Ottoman Armenia during World War I, their gains were lost with the Bolshevik Revolution of 1917[citation needed]. At the time, Russian-controlled Eastern Armenia, Georgia, and Azerbaijan attempted to bond together in the Transcaucasian Democratic Federative Republic. This federation, however, only lasted from February to May 1918, when all three parties decided to dissolve it. As a result, Eastern Armenia became independent as the Democratic Republic of Armenia (DRA) on May 28.

Democratic Republic of Armenia (DRA)

Political divisions of Europe in 1919 showing the independent Armenian republic.

The DRA's short-lived independence was fraught with war, territorial disputes, a mass influx of refugees from Ottoman Armenia, spreading disease, and starvation. Still, the Entente Powers, appalled by the actions of the Ottoman government, sought to help the newly found Armenian state through relief funds and other forms of support.

The government building of the DRA (1918–1920)

 
The government building of the DRA (1918–1920)At the end of the war, the victorious Entente powers sought to divide up the Ottoman Empire. Signed between the Allied and Associated Powers and Ottoman Empire at Sèvres on August 10, 1920, the Treaty of Sèvres promised to maintain the existence of the DRA and to attach the former territories of Ottoman Armenia to it. Because the new borders of Armenia were to be drawn by United States President Woodrow Wilson, Ottoman Armenia is also referred to as "Wilsonian Armenia."

There was even consideration of possibly making Armenia a mandate under the protection of the United States.

Armenian civilians fleeing Kars after its capture by Kazım Karabekir's forces

The treaty, however, was rejected by the Turkish National Movement, and never came into effect. The movement, under Mustafa Kemal Atatürk, used the treaty as the occasion to declare itself the rightful government of Turkey, replacing the monarchy based in Istanbul with a republic based in Ankara.

 
Armenian civilians fleeing Kars after its capture by Kazım Karabekir's forcesIn 1920, Turkish nationalist forces invaded the fledgling Armenian republic from the east and the Turkish-Armenian War began. Turkish forces under the command of Kazım Karabekir captured Armenian territories that Russia annexed in the aftermath of the 1877–1878 Russo-Turkish War and occupied the old city of Alexandropol (present-day Gyumri). The violent conflict finally concluded with the Treaty of Alexandropol (December 2, 1920).

The coat of arms of Soviet Armenia depicting Mount Ararat in the center.

Armenia was annexed by Bolshevist Russia and along with Georgia and Azerbaijan, it was incorporated into the Soviet Union as part of the Transcaucasian SFSR on March 4, 1922. With this annexation, the Treaty of Alexandropol was superseded by the Turkish-Soviet Treaty of Kars. In the agreement, Turkey allowed the Soviet Union to assume control over Adjara with the port city of Batumi in return for sovereignty over the cities of Kars, Ardahan, and Iğdır, all of which were part of Russian Armenia.

The TSFR existed from 1922 to 1936, when it was divided up into three separate entities (Armenian SSR, Azerbaijan SSR, and Georgian SSR). Armenians enjoyed a period of relative stability under Soviet rule. They received medicine, food, and other provisions from Moscow, and communist rule proved to be a soothing balm in contrast to the turbulent final years of the Ottoman Empire. The situation was difficult for the church, which struggled under Soviet rule. After the death of Vladimir Lenin, Joseph Stalin took the reins of power and began an era of renewed fear and terror for Armenians. As with various other ethnic minorities who lived in the Soviet Union during Stalin's Great Purge, tens of thousands of Armenians were either executed or deported.[citation needed]

Fears decreased when Stalin died in 1953 and Nikita Khruschev emerged as the Soviet Union's new leader. Soon, life in Soviet Armenia began to see rapid improvement. The church which suffered greatly under Stalin was revived when Catholicos Vazgen I assumed the duties of his office in 1955. In 1967, a memorial to the victims of the Armenian Genocide was built at the Tsitsernakaberd hill above the Hrazdan gorge in Yerevan. This occurred after mass demonstrations took place on the tragic event's fiftieth anniversary in 1965.

Soviet Armenia

Armenians gather at Theater Square in central Yerevan to protest Soviet policies and rule in 1988

During the Gorbachev era of the 1980s with the reforms of Glasnost and Perestroika, Armenians began to demand better environmental care for their country, opposing the pollution that Soviet-built factories brought. Tensions also developed between Soviet Azerbaijan and its autonomous district of Nagorno-Karabakh, a majority-Armenian region separated by Stalin from Armenia in 1923. The Armenians of Karabakh demanded unification with Soviet Armenia. Peaceful protests in Yerevan supporting the Karabakh Armenians were met with anti-Armenian pogroms in the Azerbaijani city of Sumgait. Compounding Armenia's problems was a devastating earthquake in 1988 with a moment magnitude of 7.2.

Gorbachev's inability to solve Armenia's problems (especially Karabakh) created disillusionment among the Armenians and only fed a growing hunger for independence. In May 1990, the New Armenian Army (NAA) was established, serving as a defence force separate from the Soviet Red Army. Clashes soon broke out between the NAA and Soviet Internal Security Forces (MVD) troops based in Yerevan when Armenians decided to commemorate the establishment of the 1918 Democratic Republic of Armenia. The violence resulted in the deaths of five Armenians killed in a shootout with the MVD at the railway station. Witnesses there claimed that the MVD used excessive force and that they had instigated the fighting.

Further firefights between Armenian militiamen and Soviet troops occurred in Sovetashen, near the capital and resulted in the deaths of over 26 people, mostly Armenians. Pogrom of Armenians in Baku in January 1990 forced almost all of the 200,000 Armenians in the Azerbaijani capital Baku to flee to Armenia. On March 17, 1991, Armenia, along with the Baltic states, Georgia and Moldova, boycotted a union-wide referendum in which 78% of all voters voted for the retention of the Soviet Union in a reformed form.[

In 1991, the Soviet Union broke apart and Armenia re-established its independence. Declaring independence on August 23, it was the first non-Baltic republic to secede. However, the initial post-Soviet years were marred by economic difficulties as well as the break-out of a full-scale armed confrontation between the Karabakh Armenians and Azerbaijan. The economic problems had their roots early in the Karabakh conflict when the Azerbaijani Popular Front managed to pressure the Azerbaijan SSR to instigate a railway and air blockade against Armenia. This move effectively crippled Armenia's economy as 85% of its cargo and goods arrived through rail traffic. In 1993, Turkey joined the blockade against Armenia in support of Azerbaijan.

The Karabakh war ended after a Russian-brokered cease-fire was put in place in 1994. The war was a success for the Karabakh Armenian forces who managed to secure 14% of Azerbaijan's internationally recognised territory including Nagorno-Karabakh itself. Since then, Armenia and Azerbaijan have held peace talks, mediated by the Organisation for Security and Co-operation in Europe (OSCE). The status over Karabakh has yet to be determined. The economies of both countries have been hurt in the absence of a complete resolution and Armenia's borders with Turkey and Azerbaijan remain closed. By the time both Azerbaijan and Armenia had finally agreed to a ceasefire in 1994, an estimated 30,000 people had been killed and over a million had been displaced.

As it enters the twenty-first century, Armenia faces many hardships. Still, it has managed to make some improvements. It has made a full switch to a market economy and as of 2009, is the 31st most economically free nation in the world. Its relations with Europe, the Middle East, and the Commonwealth of Independent States have allowed Armenia to increase trade. Gas, oil, and other supplies come through two vital routes: Iran and Georgia. Armenia maintains cordial relations with both countries.

Restoration of independence

The National Assembly of Armenia

Politics of Armenia takes place in a framework of a presidential representative democratic republic. According to the Constitution of Armenia, the President is the head of government and of a multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and parliament. The unicameral parliament (also called the Azgayin Zhoghov or National Assembly) is controlled by a coalition of four political parties: the conservative Republican party, the Prosperous Armenia party, the Rule of Law party and the Armenian Revolutionary Federation. The main opposition party is Raffi Hovannisian's Heritage party, which favors eventual Armenian membership in the European Union and NATO.

The Armenian government's stated aim is to build a Western-style parliamentary democracy as the basis of its form of government. It has universal suffrage above the age of eighteen.

International observers of Council of Europe and U.S. Department of State have questioned the fairness of Armenia's parliamentary and presidential elections and constitutional referendum since 1995, citing polling deficiencies, lack of cooperation by the Electoral Commission, and poor maintenance of electoral lists and polling places. Freedom House categorized Armenia in its 2008 report as a "Semi-consolidated Authoritarian Regime" (along with Moldova, Kosovo, Kyrgyzstan, and Russia) and ranked Armenia 20th among 29 nations in transition, with a Democracy Score of 5.21 out of 7 (7 represents the lowest democratic progress).

Since 1999, Freedom House's Democracy Score for Armenia has been steadily on the decline (from 4.79 to 5.21). Furthermore, Freedom House ranked Armenia as "partly free" in its 2007 report, though it did not categorise Armenia as an "electoral democracy", indicating an absence of relatively free and competitive elections. However, significant progress seems to have been made and the 2008 Armenian presidential election was hailed as largely democratic by OSCE and Western monitors

Government and politics

The ministry of foreign affairs in Yerevan

Embassy of Armenia in Washington, D.C.

Armenia presently maintains good relations with almost every country in the world, with two major exceptions being its immediate neighbours, Turkey and Azerbaijan. Tensions were running high between Armenians and Azerbaijanis during the final years of the Soviet Union. The Nagorno-Karabakh War dominated the region's politics throughout the 1990s. The border between the two rival countries remains closed up to this day, and a permanent solution for the conflict has not been reached despite the mediation provided by organisations such as the OSCE.

Turkey also has a long history of poor relations with Armenia over its refusal to acknowledge the Armenian Genocide of 1915. The Karabakh conflict became an excuse for Turkey to close its land border with Armenia in 1993. It has not lifted its blockade despite pressure from the powerful Turkish business lobby interested in Armenian markets. Since 2001, however, the Armenian airline company Armavia regularly flies between the Zvartnots International Airport of Yerevan and Atatürk International Airport of Istanbul. On October 10, 2009, Armenia and Turkey finally signed a peace deal, which sets a timetable for restoring diplomatic ties and reopening their joint border, which has yet to be approved by their parliaments.

Due to its position between two unfriendly neighbours, Armenia has close security ties with Russia. At the request of the Armenian government, Russia maintains a military base in the northwestern Armenian city of Gyumri as a deterrent against Turkey.[citation needed] Despite this, Armenia has also been looking toward Euro-Atlantic structures in recent years. It maintains good relations with the United States especially through its Armenian diaspora. According to the U.S. Census Bureau, there are 427,822 Armenians living in the country.

Because of the blockades by Azerbaijan and Turkey, Armenia continues to maintain solid relations with its southern neighbor Iran especially in the economic sector. Economic projects such a gas pipeline going from Iran to Armenia are in time being developed.

Armenia is also a member of the Council of Europe, maintaining friendly relations with the European Union, especially with its member states such as France and Greece. A 2005 survey reported that 64% of Armenia's population would be in favor of joining the EU. Several Armenian officials have also expressed the desire for their country to eventually become an EU member state,[46] some predicting that it will make an official bid for membership in a few years.

Eduard Nalbandyan currently serves as the Armenian Minister of Foreign Affairs

Foreign relations

The Armenian Army, Air Force, Air Defence, and Border Guard comprise the four branches of the Armed Forces of the Republic of Armenia. The Armenian military was formed after the collapse of the Soviet Union in 1991 and with the establishment of the Ministry of Defence in 1992. The Commander-in-Chief of the military is the President of Armenia, Serzh Sargsyan. The Ministry of Defence is in charge of political leadership, currently headed by Colonel-General Mikael Harutyunyan, while military command remains in the hands of the General Staff, headed by the Chief of Staff, who is currently Lieutenant-General Seyran Ohanian.

Active forces now number about 81,000 soldiers, with an additional reserve of 32,000 troops. Armenian border guards are in charge of patrolling the country's borders with Georgia and Azerbaijan, while Russian troops continue to monitor its borders with Iran and Turkey. In the case of an attack, Armenia is able to mobilise every able-bodied man between the age of 15 and 59, with military preparedness.

Military

The Treaty on Conventional Armed Forces in Europe, which establishes comprehensive limits on key categories of military equipment, was ratified by the Armenian parliament in July 1992. 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 (NPT) as a non-nuclear weapons state in July 1993.

Armenia is member of Collective Security Treaty Organisation (CSTO) along with Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. It participates in NATO's Partnership for Peace (PiP) program and is in a NATO organisation called Euro-Atlantic Partnership Council (EAPC). Armenia has engaged in a peacekeeping mission in Kosovo as part of non-NATO KFOR troops under Greek command.[48] Armenia also had 46 members of its military peacekeeping forces as a part of the Coalition Forces in Iraq War until October 2008

Armenia is divided into ten provinces (marzer, singular marz), with the city (kaghak) of Yerevan (Երևան) having special administrative status as the country's capital. The chief executive in each of the ten provinces is the marzpet (marz governor), appointed by the government of Armenia. In Yerevan, the chief executive is the mayor, appointed by the president.

Within each province are communities (hamaynkner, singular hamaynk). Each community is self-governing and consists of one or more settlements (bnakavayrer, singular bnakavayr). Settlements are classified as either towns (kaghakner, singular kaghak) or villages (gyugher, singular gyugh). As of 2007, Armenia includes 915 communities, of which 49 are considered urban and 866 are considered rural. The capital, Yerevan, also has the status of a community. Additionally, Yerevan is divided into twelve semi-autonomous districts.

The Republic of Armenia, covering an area of 29,743 square kilometres (11,484 sq mi), is located in the north-east of the Armenian Highland (400,000 square kilometres (154,441 sq mi)), otherwise known as historical Armenia and considered as the original homeland of Armenians. The terrain is mostly mountainous, with fast flowing rivers and few forests. The climate is highland continental, which means that the country is subjected to hot summers and cold winters. The land rises to 4,090 metres (13,419 ft) above sea-level at Mount Aragats, and no point is below 390 metres (1,280 ft) above sea level.

Mount Ararat, which was historically part of Armenia, is the highest mountain in the region. Now located in Turkey, but clearly visible in Armenia, it is regarded by the Armenians as a symbol of their land. Because of this, the mountain is present on the Armenian national emblem today.

Geography

Topography

Armenia has established a Ministry of Nature Protection and introduced taxes for air and water pollution and solid waste disposal, whose revenues are used for environmental protection activities. Waste management in Armenia is underdeveloped as no waste sorting or recycling takes place at Armenia's 60 landfills.

Despite the availability of abundant renewable energy sources in Armenia (especially hydroelectric and wind power) the Armenian Government is working toward building a new Nuclear Power Plant at Medzamor near Yerevan.

Climate
See also: Climate of Armenia

The climate in Armenia is markedly continental. Summers are dry and sunny, lasting from June to mid-September. The temperature fluctuates between 22 and 36 degree Celsius (72 and 97 °F). However, the low humidity level mitigates the effect of high temperatures. Evening breezes blowing down the mountains provide a welcome refreshing and cooling effect. Springs are short, while falls are long. Autumns are known for their vibrant and colorful foliage.

Winters are quite cold with plenty of snow, with temperatures ranging between -10 and -5 °C (14 and 23 °F). Winter sports enthusiasts enjoy skiing down the hills of Tsakhkadzor, located thirty minutes outside Yerevan. Lake Sevan nestled up in the Armenian highlands, is the second largest lake in the world relative to its altitude, 1,900 metres (6,234 ft) above sea level.

Environment

The Armenian economy heavily relies on investment and support from Armenians abroad. Before independence, Armenia's economy was largely industry-based – chemicals, electronics, machinery, processed food, synthetic rubber, and textile – and highly dependent on outside resources. The republic had developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics in exchange for raw materials and energy.

Agriculture accounted for less than 20% of both net material product and total employment before the dissolution of the Soviet Union in 1991. After independence, the importance of agriculture in the economy increased markedly, its share at the end of the 1990s rising to more than 30% of GDP and more than 40% of total employment. This increase in agriculture's share was attributable to food security needs of the population in the face of uncertainty during the first phases of transition and the collapse of the non-agricultural sectors of the economy in the early 1990s. As the economic situation stabilized and growth resumed, the share of agriculture in GDP dropped to slightly over 20% (2006 data), although the share of agriculture in employment remained more than 40%.

 
Modern companies in Yerevan.Armenian mines produce copper, zinc, gold, and lead. The vast majority of energy is produced with fuel imported from Russia, including gas and nuclear fuel (for its one nuclear power plant); the main domestic energy source is hydroelectric. Small amounts of coal, gas, and petroleum have not yet been developed.

Like other newly independent states of the former Soviet Union, 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 Spitak Earthquake, which killed more than 25,000 people and made 500,000 homeless, are still being felt. The conflict with Azerbaijan over Nagorno-Karabakh has not been resolved. The closure of Azerbaijani and Turkish borders has devastated the economy, because Armenia depends on outside supplies of energy and most raw materials. Land routes through Georgia and Iran are inadequate or unreliable. GDP fell nearly 60% from 1989 until 1993, and then resumed its robust growth.The national currency, the dram, suffered hyperinflation for the first years after its introduction in 1993.

Nevertheless, the government was able to make wide-ranging economic reforms that paid off in dramatically lower inflation and steady growth. The 1994 cease-fire in the Nagorno-Karabakh conflict has also helped the economy. Armenia has had 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 jewellery making, information and communication technology, and even tourism are beginning to supplement more traditional sectors in the economy, such as agriculture.

This steady economic progress has earned Armenia increasing support from international institutions. The International Monetary Fund (IMF), World Bank, European Bank for Reconstruction and Development (EBRD), and other international financial institutions (IFIs) and foreign countries are extending considerable grants and loans. Loans to Armenia since 1993 exceed $1.1 billion. These loans are targeted at reducing the budget deficit, stabilizing the currency; developing private businesses; energy; the agriculture, food processing, transportation, and health and education sectors; and ongoing rehabilitation in the earthquake zone. The government joined the World Trade Organization on February 5, 2003. But one of the main sources of foreign direct investments remains the Armenian diaspora, which finances major parts of the reconstruction of infrastructure and other public projects. Being a growing democratic state, Armenia also hopes to get more financial aid from the Western World.

A liberal foreign investment law was approved in June 1994, and a Law on Privatisation was adopted in 1997, as well as a program on state property privatisation. Continued progress will depend on the ability of the government to strengthen its macroeconomic management, including increasing revenue collection, improving the investment climate, and making strides against corruption. However unemployment still remains a major problem due to the influx of thousands of refugees from the Karabakh conflict, which currently stands at around 15%.

Armenia ranked 83rd on the 2007 UNDP Human Development Index, the highest among the Transcaucasian republics. In the 2007 Transparency International Corruption Perceptions Index (CPI), Armenia ranked 99 of 179 countries. In the 2008 Index of Economic Freedom, Armenia ranked 28th, ahead of countries like Austria, France, Portugal and Italy

Economy

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