Background: An Orthodox Christian country Armenia was incorporated into Russia in 1828 and the USSR in 1920. Armenian leaders remain preoccupied by the long conflict with Azerbaijan over Nagorno-Karabakh a primarily Armenian-populated exclave assigned to Soviet Azerbaijan in the 1920s by Moscow. Armenia and Azerbaijan began fighting over the exclave in 1988; the struggle escalated after both countries attained independence from the Soviet Union in 1991. By May 1994 when a cease-fire took hold Armenian forces held not only Nagorno-Karabakh but also a significant portion of Azerbaijan proper. The economies of both sides have been hurt by their inability to make substantial progress toward a peaceful resolution.
Environment Current issues: soil pollution from toxic chemicals such as DDT; energy blockade the result of conflict with Azerbaijan has 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 without adequate (IAEA-recommended) safety and backup systems
Political parties and leaders: Armenian Communist Party or ACP [Vladimir DARBINIAN]; Armenian National Movement or ANM [Vano SIRADEGIAN chairman]; Armenian Revolutionary Federation ('Dashnak' Party) or ARF [Vahan HAVHANNISIAN]; Christian Democratic Union or CDU [Azat ARSHAKYN chairman]; Democratic Liberal Party [Ramkavar AZATAKAN chairman]; Free Armenian's Mission [Ruben MNATSANIAN chairman]; Law and Unity Party [Artashes GEGAMIAN chairman]; Law-Governed Party [Artur BAGDASARIAN chairman]; Mission Party [Artush PAPOIAN chairman]; National Democratic Union or NDU [Vazgen MANUKIAN]; National State Party [Samvel SHAGINIAN]; People's Party of Armenia [Stepan DEMIRCHYAN]; Republican Party [Andranik MARKARYAN]; Shamiram Women's Movement or SWM [Maria NERSISSIAN]; Social Democratic (Hnchakian) Party [Yeghia NACHARIAN]; Stability Group [Vartan AYVAZIAN chairman]; Union of National Self-Determination or NSDU [Paruir HAIRIKIAN chairman]
International organization participation: BSEC CCC CE (guest) CIS EAPC EBRD ECE ESCAP FAO IAEA IBRD ICAO ICRM IDA IFAD IFC IFRCS ILO IMF Intelsat Interpol IOC IOM ISO ITU NAM (observer) OPCW OSCE PFP UN UNCTAD UNESCO UNIDO UPU WFTU WHO WIPO WMO WToO WTrO (applicant)
Economy overview: Under the old Soviet central planning system Armenia had developed a modern industrial sector supplying machine tools textiles and other manufactured goods to sister republics in exchange for raw materials and energy. Since the implosion of the USSR in December 1991 Armenia has switched to small-scale agriculture away from the large agroindustrial complexes of the Soviet era. The agricultural sector has long-term needs for more investment and updated technology. The privatization of industry has been at a slower pace but has been given renewed emphasis by the current administration. Armenia is a food importer and its mineral deposits (gold bauxite) are small. The ongoing conflict with Azerbaijan over the ethnic Armenian-dominated region of Nagorno-Karabakh and the breakup of the centrally directed economic system of the former Soviet Union contributed to a severe economic decline in the early 1990s. By 1994 however the Armenian Government had launched an ambitious IMF-sponsored economic program that has resulted in positive growth rates in 1995-99. Armenia also managed to slash inflation and to privatize most small- and medium-sized enterprises. The chronic energy shortages Armenia suffered in recent years have been largely offset by the energy supplied by one of its nuclear power plants at Metsamor. Continued Russian financial difficulties have hurt the trade sector especially but have been offset by international aid domestic restructuring and foreign direct investment.
Exports: $240 million (1999 est.) Commodities: diamonds scrap metal machinery and equipment cognac copper ore Partners: Belgium Russia Iran Turkmenistan US Georgia (1998)
Imports: $782 million (1999 est.) Commodities: natural gas petroleum tobacco products foodstuffs diamonds Partners: Russia US UK Iran Turkey Belgium (1998)
Disputes international: Armenia supports ethnic Armenians in the Nagorno-Karabakh region of Azerbaijan in the longstanding separatist conflict against the Azerbaijani Government; traditional demands regarding former Armenian lands in Turkey have subsided
Illicit drugs: illicit cultivator of cannabis mostly for domestic consumption; increasingly used as a transshipment point for illicit drugs - mostly opium and hashish - to Western Europe and the US via Iran Central Asia and Russia