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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)

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
 

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: 282 - (30/06/04)

Opposition rallies
There has been a two month-long series of rallies by the opposition in Armenia, clearly inspired by the Rose Revolution in Georgia. But they have lacked the focus of a disputed election and have fizzled out.
The main opposition grouping, Arkarutyun, has been urging its supporters to continue to demonstrate, but evidently people cannot see the point of doing so. President Robert Kocharian is not an old man coming to the end of his political life, as was Shevardnadze in Georgia last November, but a vigorous fellow in his forties, determined to hold onto power. He runs a very tight regime and had the good fortune to have got his re-election out of the way earlier last year in May six months before the Rose Revolution.
His position looks strong for the moment, not least because the economy is picking up, albeit from a very low base. His security forces are very alert. Having been the president of Nagorno-Karabakh, the Armenian enclave in Azerbaijan beforehand, he is used to being beleaguered, indeed rather relishes the challenge.

Talks under way with Baku
As a hardliner on the issue, Kocharian is, nevertheless, the one Armenian leader who could just conceivably do a deal with Baku to resolve the crisis over the enclave.
Talks are under way with the new government in Azerbaijan, installed in October under President Ilham Aliyev, the son of his predecessor. But there are rumblings of dissension in Baku in a manner that Haidar Aliyev never had to face. Only a leader in a strong position at home is likely to be able to do a deal. 
There has been no disclosure on the range and nature of the talks, perfectly appropriately in a delicate diplomatic operation of this sort. Both sides could benefit hugely if there was a breakthrough, Azerbaijan having 20% of its territory and one and a half million refugees at stake and Armenia the ending of its diplomatic and economic isolation in the region. Both Turkey and Azerbaijan maintain a blockade at present which certainly is hurting Armenia's economy. 
The one sure way for Kocharian to guarantee that he does not face a revolution against his regime eventually would be to do a deal with the Azeris. But he probably feels that he doesn't have to, his domestic grip on his country being so firm. Time will tell if this is hubris, inviting a nemesis. There are many Armenians who hope so. 

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FOREIGN LOANS & AID

Lemierre says EBRD ready to offer more aid to Armenia

President of the European Bank for Reconstruction and Development (EBRD), Jean Lemierre, is expected to visit Armenia as part of his Caucasian tour. He has proposed an initiative for the support to the poorest countries, a source in the republic's government said recently, Itar-Tass News Agency reported.
Lemierre will probably be meeting with representatives of the republic's authorities and top executives of industrial enterprises. The EBRD president intends to focus attention on the problems of the fight with corruption and strengthening the supremacy of law as factors for encouraging investments. The EBRD projects include the intensification of the national market activities by financing small projects, encouragement of investments and promotion of the process of economic reforms. The bank leadership has asserted that it will provide greater support to the private sector focusing on small and medium business. 
The European Bank for Reconstruction and Development has already invested about 700m in Armenia, Georgia and Azerbaijan for implementing various projects - from banking, infrastructure and energy to the support to small and medium businesses.

U.S. to extend US$700m to Armenia

Armenia expects to receive US$700 million in aid from the United States in 2004-2008 under the Challenges of the Century program, Armenia's Finance Minister, Vardan Khachatryan, said recently, Interfax News Agency reported. 
Armenia hopes to receive US$100m of the aid before the end of 2004. 
The government is currently developing specific projects in order to receive this money. It is anticipated that the money will be used in education, healthcare and social services, and to rebuild the country's infrastructure, such as irrigation systems and rural area roads. 
Armenia also expects to receive US$20m - US$25m from the World Bank under a program to fight poverty, Khachatryan said.

Fresh WB loan will shore up Armenian agro sector

The World Bank has released 35m Euro in additional low-interest loans to the republic of Armenia, designed to improve the country's public services and to shore up its struggling agriculture, Armenia Country Manager, Roger Robinson, announced recently, New Europe reported.
According to Robinson, this decision was taken by the World Bank's governing body in Washington, where the Armenian government's economic policies were rewarded with a fresh 15m Euro credit from the International Monetary Fund.
The largest of the World Bank loans, worth 23m Euro, is aimed at improving supplies of drinking water and wastewater disposal in the regions outside Yerevan. "It will improve the reliability and quality of drinking water, increase hours of service, and provide for greater operating efficiency," Brian Steven smith, head of the bank's team designing the project, said in a statement from Washington. Smith said the project will build on "improvements" which have been achieved with a similar 30m Euro project implemented by the World Bank in Yerevan since 1999.
The money has been used for the modernisation and restructuring of the city's hugely inefficient water network which has been managed by an Italian firm in the last three years.
The Armenian government stated that the average Yerevan household will enjoy round-the-clock supplies by the end of the year.
The second World Bank loan, worth 10.15m Euro, is meant to "improve the transparency, accountability, effectiveness and efficiency in public sector management," the World Bank statement said.
The World Bank also disbursed 1.74m Euro for the Armenian agriculture sector. Most of that will be used for partly compensating up to 10,000 farmers in the fruit-growing Ararat valley who were hit particularly hard by a severe frost in December 2002.
Robinson said the bank's board will likely lend a further 30m Euro for the government's ongoing reforms of the social security and healthcare sectors at a meeting in the near future. The meeting is also expected to approve the bank's new four year country assistance strategy (CAS) for Armenia. The government hopes to secure 200m Euro in fresh loans under that programme.

Germany approves 3.5m Euro grant to Armenia

Germany will lend Armenia 3.5m Euro to strengthen its credit guarantee fund, Karapet Gevorkian, a representative of Germany's KfW, which will disburse the money, said recently, Interfax News Agency reported.
So far, Germany has issued 110m Euro in credits and grants to the Armenian republic.
KfW will release the money after it has approved a feasibility study, which was due to be completed by the end of June. In addition, the bank is waiting for Armenia's parliament to pass a law on guaranteeing personal bank deposits, Gevorkian said. Armenia started its deposit guarantee fund on July 1st, 2003, but this will not be in a position to start payments until July 1st, 2005. The guarantee fund will receive the credit, which will be repayable in 40 years, at 0.75% year-on-year. The credit will enable banks to lower mandatory deductions to the fund from 0.5% to 0.2% of the deposits they receive.

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FOREIGN RELATIONS

Armenia, Russia to boost relations in all spheres

The fate of five Armenian enterprises handed over to Russia under the property-for-debt agreement was the key issue which was discussed on June 2nd during a sitting of the Armenian-Russian interparliamentary commission in Yerevan, Public Television of Armenia reported.
The members of the commission stressed the importance of developing these enterprises. The main obstacle to the development of Armenian-Russian economic relations - transport communications - was also the key issue of the Yerevan meeting. The Armenian and Russian parliamentarians suggested that the Armenian, Russian and Georgian leaders sign a trilateral agreement and create a transport corridor.
The seventh session of the Armenian-Russian interparliamentary commission discussed mainly economic issues. The commodity turnover increased by 30 per cent last year. According to the assessments of the commission's co-chairmen, there are various issues of cooperation in the regional small and medium-sized business sphere. "Yes, there are problems, first of all there are discrepancies in legislation. The enterprises have been handed over to the Russian side, but Armenian laws are valid there, which is creating problems. There are also technical problems," Russian co-chairman of the commission, Nikolay Ryzhkov, said.
"Transport communications are not at a good level. Russia has made serious investments in Armenia, especially in the aviation sphere. At the same time, they do not ensure a qualitative improvement, and I think that there is a lot to do to ensure cooperation," National Assembly deputy chairman, Vaan Ovanesyan, said.
Transport issues were also discussed separately during the session. According to the sides' assessments, the main obstacle in this field is the closure of the Abkhaz railway section which connects the two countries.
"It is known that Azerbaijan is pursuing a policy of hindering Armenia's participation in all the transport and economic programmes of regional importance. But our partners have no such problems. Armenia will finally join the programme on establishing the Russian-Azerbaijani-Iran transit communications line, which was first designed as a Russia-Armenia-Iran one," Vaan Ovanesyan said.
The agreement adopted at the end of the Yerevan session of the interparliamentary commission envisages setting up five working groups which will be engaged in economic, political, educational-cultural international parliamentary organizations and deal with interregional cooperation issues. They also suggested that the Armenian, Russian and Georgian governments sign a trilateral agreement on establishing a transport corridor. In order to develop Armenian-Russian cooperation, the session also approved the decision to set up an Armenian-Russian Business Cooperation Association. A member of the Armenian National Assembly, Volodya Badalyan, was elected chairman of the Armenian-Russian cooperation association.

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