Economic Overview
Since the breakup of the soviet union in 1991, armenia has made progress in implementing many economic reforms including privatization, price reforms, and prudent fiscal policies. the conflict with azerbaijan over the ethnic armenian-dominated region of nagorno-karabakh contributed to a severe economic decline in the early 1990s. by 1994, however, the armenian government launched an ambitious imf-sponsored economic liberalization program that resulted in positive growth rates. economic growth has averaged over 13% in recent years. armenia has managed to reduce poverty, slash inflation, stabilize its currency, and privatize most small- and medium-sized enterprises. under the old soviet central planning system, armenia developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics, in exchange for raw materials and energy. armenia has since switched to small-scale agriculture and away from the large agroindustrial complexes of the soviet era. nuclear power plants built at metsamor in the 1970s were closed following the 1988 spitak earthquake, though they sustained no damage. one of the two reactors was re-opened in 1995, but the armenian government is under international pressure to close it due to concerns that the soviet era design lacks important safeguards. metsamor provides 40 percent of the country's electricity - hydropower accounts for about one-fourth. economic ties with russia remain close, especially in the energy sector. the electricity distribution system was privatized in 2002 and bought by russia's rao-ues in 2005. construction of a pipeline to deliver natural gas from iran to armenia is halfway completed and is scheduled to be commissioned by january 2009. armenia has some mineral deposits (copper, gold, bauxite). pig iron, unwrought copper, and other nonferrous metals are armenia's highest valued exports. armenia's severe trade imbalance has been offset somewhat by international aid, remittances from armenians working abroad, and foreign direct investment. armenia joined the wto in january 2003. the government made some improvements in tax and customs administration in recent years, but anti-corruption measures will be more difficult to implement. despite strong economic growth, armenia's unemployment rate remains high. armenia will need to pursue additional economic reforms in order to improve its economic competitiveness and to build on recent improvements in poverty and unemployment, especially given its economic isolation from two of its nearest neighbors, turkey and azerbaijan.
Environmental Issues
Soil pollution from toxic chemicals such as ddt; the energy crisis of the 1990s led to deforestation when citizens scavenged for firewood; pollution of hrazdan (razdan) and aras rivers; the draining of sevana lich (lake sevan), a result of its use as a source for hydropower, threatens drinking water supplies; restart of metsamor nuclear power plant in spite of its location in a seismically active zone
Government Type
Republic
Population
2,968,586 (july 2008 est.)
Location
Southwestern asia, east of turkey
Area
Total: 29,743 sq km
land: 28,454 sq km
water: 1,289 sq km
Slightly smaller than maryland
Country Aliases
Conventional long form: republic of armenia
conventional short form: armenia
local long form: hayastani hanrapetut'yun
local short form: hayastan
former: armenian soviet socialist republic, armenian republic
Capital
Name: yerevan
geographic coordinates: 40 10 n, 44 30 e
time difference: utc+4 (9 hours ahead of washington, dc during standard time)
daylight saving time: +1hr, begins last sunday in march; ends last sunday in october
Military Service
18-27 years of age for voluntary or compulsory military service; 2-year conscript service obligation (2007)
International Disputes
Armenia supports ethnic armenian secessionists in nagorno-karabakh and since the early 1990s, has militarily occupied 16% of azerbaijan - organization for security and cooperation in europe (osce) continues to mediate dispute; over 800,000 mostly ethnic azerbaijanis were driven from the occupied lands and armenia; about 230,000 ethnic armenians were driven from their homes in azerbaijan into armenia and nagorno-karabakh; azerbaijan seeks transit route through armenia to connect to naxcivan exclave; border with turkey remains closed over nagorno-karabakh dispute; ethnic armenian groups in javakheti region of georgia seek greater autonomy; armenians continue to emigrate, primarily to russia, seeking employment
Sources: Central Intelligence Agency (CIA)
