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armenia

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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)

REPUBLICAN REFERENCE

Area (sq.km)
29,800

Population
3,336,100

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

Capital
Yerevan

Currency
Dram

President
Robert Kocharian
 

  

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. 

Update No: 276 - (01/01/04)

Troubles in Georgia
The alarm bells are ringing in Yerevan. A most embarrassing example of democracy in action is being set in Georgia. The Armenian leadership, and particularly President Robert Kocharian, must be deeply worried by the downfall of Eduard Shevardnadze, the longstanding president of the Caucusus state, just next door. The exposure of a fraudulent election and the forced resignation of the president set awkward precedents for Armenia. 
Armenia is a Christian country like Georgia. Indeed, it underwent official conversion at state level before any other country, and even the Roman Empire, in 300 AD. It sees itself, therefore, as part of the West, which was artificially swallowed up by Russia. That heritage involves an appreciation and respect for liberal and democratic values. But that is hardly what the regime in Yerevan exemplifies.
Kocharian was re-elected in May 2003 in a highly dubious manner, contested by the opposition. He is a thuggish dictator, who merely pretends to lead a democracy. He learnt his political trade as president of Nagorno-Kharabak, the Armenian enclave in Azerbaijan, when it was the stake in a war with the Azeris, which the Armenians won.
The equally dubious election of President Ilham Aliyev of Azerbaijan on October 15th was not a pleasant prospect either, but at least the West went along with the fraud. They have good reason to do so - oil. No such consideration obtains for complaisance to Armenia.

Turning to Russia
The natural ally for the repressive regime in Yerevan is Moscow. The Armenians are allowing the Russians to augment their military presence in the republic. 
The Armenian side has agreed to joint use of military facilities with Russia, including airfields, bridges and roads. Armenia is in 'a special relationship' with Russia, much as the UK is with the US. If it won the war it was due to this fact above all others. The Armenian forces are closely intertwined with Russia's.
This 'special relationship' extends beyond military matters. Armenians have long played a prominent role in Russian affairs. The oil baron, Gulbenkian, and the brothers, Mikoyan, stand out here, one a top Soviet politician for decades, the other a brilliant engineer and inventor of MiG planes.
Putin is keen to show his appreciation here. Russia has become a second homeland for many Armenians, Putin siad at the founding congress of the World Armenian Organisation in Moscow on October 6th. "We highly appreciate the contribution of the Armenian community to all spheres of Russian life," the Kremlin leader continued. Russian and Armenians "feel equally comfortable and welcome both in Russia and Armenia," he said.
The contribution of the Armenian community to the development of its ancestral homeland and to the Russian-Armenian business relationship will only grow and expand, the Russian president said. He noted how Russia is eager to develop equal ties and cooperation agreements with Armenia. Putin expressed confidence that the World Armenian Organisation will contribute to the development of "the principal stance of society and attitudes of citizens of different countries to such threats as terrorism and national and religious extremism.

Economy booming
One comfort for the regime is a booming economy. It has the highest figures for growth of both industrial production and GDP in the CIS.
Industrial output rose by 20.5% in the first nine months of 2003 on an annual basis, while GDP rose by 15.2 % in the same period. The growth is coming after a drastic contraction in the 1990s. But it is coming and highly welcome for that.

Guarded approval of IMF
The IMF is administering a $95m three-year credit programme, with a new tranche of $14m on the way. The IMF Managing director himself, Horst Koehler visited Armenia in November to discuss matters, showing the high priority accorded to Armenia by the fund. But he had some critical things to say.
After visiting with leaders in the capital city of Yerevan, Koehler said the country must improve tax and customs collections and boost private-sector development despite an "impressive economic performance since 2000 and substantial progress" in the transition to a "dynamic" market economy. According to Koehler, "prudent budgetary and monetary policies to ensure high economic growth and low inflation" and a harder crackdown on corruption and other barriers to the private business sector are vital for Armenia.

US and EU urge closure of nuclear plant
The country had a devastating earthquake in 1989, which could have had even worse repercussions if a nuclear power plant had been affected. Since the republic is in a disturbed seismic zone it makes sense to close the nation's one nuclear plant down.
This is precisely what the US and EU are urging. Its recent transfer into the hands of a Russian company, United Energy Systems, is not a sufficient guarantee of its safety. The EU is offering 100m Euro for the purpose. 

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FOREIGN INVESTMENT

Envoy calls on Armenia to encourage British investment

An exhibition of British goods opened at the Hotel Congress on 8th December, Noyan Tapan News Agency has reported.
The British ambassador extraordinary and plenipotentiary to Armenia, Thorda Abbott Watt, has noted that despite the growing interest of British businessmen in Armenia, the level of bilateral trade and economic relations is not satisfactory. The ambassador said that a favourable investment climate had to be created in Armenia and steps had to be taken to establish the judicial system in order to further encourage the development of these relations.
The trade turnover between the UK and Armenia in the first six months of 2003 totalled about US$69m, which was 34 per cent more than last year.

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FOREIGN LOANS

IFC covers Baku-Tbilisi pipe cost with US$125m

The World Bank's lending subsidiary, International Finance Corp, said in early November that it would offer a US$125m credit to help cover the development costs of the Baku-Tbilisi-Ceyhan oil export pipeline, the Washington Post reported.
The IFC will subsidise a second, commercial syndicated loan worth US$125m, the report said. The project is due to finish in late 2004, and the first oil should reach Ceyhan in April 2005.

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FOREIGN ECONOMIC RELATIONS

Armenian PM and Tajik president discuss trade-economic relations

Armenian Prime Minister Andranik Markaryan received Tajik President Emomali Rahmonov on 26th November, Public Television of Armenia has reported. The Armenian prime minister said that the Tajik president's visit will give a boost to the development of relations and implementation of the bilateral agreements as soon as possible. The Armenian prime minister outlined the importance of the intergovernmental commission which will hold a session in Yerevan next February. The sides noted the need for holding joint business forums and exhibitions in order to strengthen relations and the need for establishing a trade centre. 
For his part, Rahmonov once again confirmed his country's readiness for long-term and strong cooperation with Armenia. The sides also noted that a high level of political relations would enable them to cooperate more productively within the framework of international organizations. 
The Tajik president also visited Matenadaran [Institute of ancient manuscripts]. The director of Matenadaran, Sen Arevshatyan, showed Rahmonov some manuscripts about the history of Armenia and Armenian-Tajik relations. The Tajik president spoke about his appreciation of the fact that Armenia was taking such good care of its historic and cultural manuscripts. 

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TRANSPORT

Karabakh raises over US$6m in USA to build major road

A 12-hour telethon has finished in the USA to raise funds for continuing the construction of the North-South highway in Nagornyy Karabakh. The fund-raising for the construction of the North-South highway started in France on 12th November and US$900,000 were collected, Public Television of Armenia has reported.
American benefactors of Armenian origin, Albert Boyadzhyan and Louis Simon Manukyan, made the first biggest donation - a million dollars - in a telethon which started in Los Angeles on 27th November. Artsakh [Karabakh], for which the funds were raised, also took part in the telethon and collected US$84,000. Armenia collected US$620,000. According to preliminary results of the telethon, more than US$6,720,557 were collected.
The total length of the highway is 170 km. A total of 44 km of the highway in Artsakh [Karabakh] has already been constructed, 26 km of the highway is under construction. In order to complete the construction of the highway, a 100-km section has to be built. The collected sum will be sufficient to build a 40-km section of the highway.
The CEO of the All-Armenian Foundation Ayastan, Naira Melkumyan, has said that she assesses highly the results of the telethon and noted that for the first time they have achieved such an unexpected result.

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