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ARMENIA

Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 2,367 2,100 1,900 135
         
GNI per capita
 US $ 790 570 530 143
Ranking is given out of 208 nations - (data from the World Bank)

Books on Armenia

REPUBLICAN REFERENCE

Area (sq.km)
29,800

Population
3,326,448

Principal ethnic groups
Armenian 93.3%
Azeri 2.6%
Russian 2%

Capital
Yerevan

Currency
Dram

President
Robert Kocharian
 

 

Update No: 285 - (01/10/04)

Armenia is the unluckiest of the countries of the Caucasus, or for that matter, its surrounds. It is the only one with no outlet to the sea. Land-locked and prone to earthquakes (one such struck in 1988, killing 30,000 people), it has neither the resources nor the access to resources of neighbouring Azerbaijan and Georgia, Iran and Turkey, let alone Russia. Nor does it have the political allies it needs.
It is notching up very high growth rates right now, with GDP estimated to have risen by 13% in 2003 and to be rising by 7% in 2004.But this is from as very low base, indeed, with GDP per capita at only $2,663 the lowest in the region after Georgia, itself a basket case. FDI per capita was a meagre $275 for the entire post-period up to 2003. Not even the extensive Diaspora, larger than the domestic population and often successful at business, feel much like investing.
It is the logical shortest route for all that for Caspian Sea oil to flow westwards; but it is being cold-shouldered by the Azeris in favour of the Georgians. A pipeline is to flow from Baku, via Georgia's Black Sea coast, to Turkey, a gratuitous by-pass, if ever there was one.
Never can there have been a clearer case of geopolitics prevailing over economics. Armenia lies directly between Azerbaijan and Turkey. But the longer transit is preferred.
The explanation is of course the unfinished business between the two former Soviet republics in the shape of the war over Nagorno-Karabakh. This effectively ended in 1992, with the Armenians the victors in de facto control of 20% of Azeri territory. But it did not end for the one and a half million Azeri refugees. The war is still on.

Embattled regime
The Armenian president is the last man to go in for a compromise. He was president of Nagorno-Karabakh before being president of Armenia. He will fight to the death. There is no wisdom in his disposition, only implacable hatred - of the Azeris naturally, whom his supporters have so much wronged, but also of his own opposition.
The Azeris wronged the Armenians too, without a doubt. This is where true statesmanship is needed. Millions have been afflicted on either side, the dead, the amputees without a limb, the exiles without a true home. Never has there been more needed a commission of truth and reconciliation. Robert Kocharian, the president of Armenia, is in total denial about this, an unregenerate fanatic if ever there was one. 
The opposition has taken to the streets. Emboldened by the Rose Revolution in Georgia last year, they denounced him in no uncertain terms. That was in the spring and early summer. 
But that is past history. The opposition has called its forces off the streets and retreated to closed-door strategy sessions. Mr Kocharian has visited France recently, where he taunted his own opposition for failing to realise that his police were, unlike those in Georgia, ready and able 'to maintain public order.' Kocharian has no statesmanlike reputation in the West to protect, of which he is proud, unlike Shevardnadze. He is utterly ruthless and proud of that. He will last the course.

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FOREIGN ECONOMIC RELATIONS

Polish president meets visiting Armenian leader, four documents signed

Polish and Armenian Presidents, Aleksander Kwasniewski, and Robert Kocharian, recently advised businessmen to expand economic and trade relations. Public Television of Armenia reported. 
The meeting between Kocharian and Kwasniewski, which included other officials, was held at the Polish presidential palace. After the talks, the two presidents signed four documents, including one each on defence, on crime, on economic cooperation and others. 
These documents have laid the legal foundations for the Armenian-Polish bilateral relations. Armenian and Polish officials said that economic and trade relations are promising, and Armenian and Polish businessmen need to cooperate closely to expand mutually-beneficial business relations. 
The issue of integration into Europe is on the agenda of the Armenian-Polish negotiations. The road to the European structures experienced by Poland, a full-fledged member of the European Union, could be beneficial for Armenia, which is on its way towards Europe, too. 
The defence issue was also on the agenda of the Armenian-Polish talks. Armenian Defence Minister, Serzh Sarkisyan, was at the Polish Defence Ministry recently. Armenian and Polish defence ministers said that defence cooperation between the two countries was quite extensive, covering both officer training and technical cooperation. Sarkisyan noted the importance of learning from the positive experience of the Polish armed forces.

Danish FM visits Armenia, calls for larger EU role in region

Denmark's Foreign Minister, Per Stig Moeller, was in Yerevan on August 27th. In his meetings with Armenian leaders and at a concluding news conference, Moeller presented the region's recent inclusion in the EU's programme of privileged ties with neighbouring states as far-reaching "European perspectives" for Armenia, Azerbaijan and Georgia. He referred to them as a "part of Europe" and said the bloc must not become an exclusive club of affluent nations, Baku Today reported.
Moeller was among the foreign ministers of the EU member states that formally approved, on June 14th, the three countries' inclusion in the European Neighbourhood Programme (ENP). Each of them now has to negotiate individual "action plans" on political and economic integration into the union.
Officials in Brussels have stressed that Armenia and its ex-Soviet neighbours will not be able to draw any material benefits from the ENP until 2007. They also say that the programme does not automatically pave the way for their membership of the EU.
But Moeller, citing the example of Turkey, said the South Caucasus states can become eligible for EU membership in the future if they meet the EU's strict standards of democratic governance, the rule of law and economic liberalisation, the reports said.
Speaking about Danish-Armenian relations, Moeller singled out energy as a potentially promising area of bilateral economic cooperation. He reiterated in this regard the EU's calls for the closure of the Metsamor nuclear power station and offered Yerevan the opportunity to look into Denmark's growing reliance on renewable sources of electricity such as the wind and the sun.
Prime Minister, Andranik Markarian, was quoted by his office as telling Moeller that Armenia would like to learn from the Danish experience. Yerevan has resisted EU pressure to decommission Metsamor this year and plans to keep the facility operation for another decade.

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MINERALS & METALS

Bayerische Landesbank to fund Armenal overhaul

German bank Bayerische Landesbank has agreed to provide more than 50m in financing for a modernisation programme at Armenal aluminium foil plant in Armenia, it was reported recently. Negotiations with German insurance company Hermes, which will cover the programme should wrap up within a month, Russian Aluminium (RusAl) Director General Alexander Livshits announced at a press conference in Armenia on August 16th.
On top of the German bank's input, RusAl will itself be contributing 20m as working capital, Interfax quoted Livshits as saying. Of that, 1.5m has already been spent on project preparations and readying the plant for modernisation, he said. Armenal will get a factory for making aluminium foils with maximum thickness of 0.57mm.
After the Armenal modernisation work is completed, the plant will be put into operation in 2005, Livshits said. Armenal exported 11.7m worth of product in January-June, 17.9% less year-on-year.
The Armenian Trade and Economic Development Ministry said the products were previously made, since Armenal has been shut down for modernisation since the end of last year.

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