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ARMENIA


  
  



In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 2,797 2,367 2,100 139
         
GNI per capita
 US $ 950 790 570 143
Ranking is given out of 208 nations - (data from the World Bank)

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REPUBLICAN REFERENCE

Area (sq.km)
29,800

Population
2,991,360

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

Capital
Yerevan

Currency
Dram

President
Robert Kocharian


 


Update No: 300 - (01/01/06)

Troublesome neighbours
The Armenian question is one of the thorniest on the table for Europe and the European Union (EU). The Turks have a grind with the Armenians, as the Armenians do with them. The Turks deny that they massacred one million or more Armenians in 1915, which they did. A trial is going on in Turkey right now of their great writer, Orhan Pamuk, who has referred to this fact of genocide publicly, an act of treason for the military and other guardians of secular Turkish statehood, for whom no such blemish is tolerable. 
Armenia also has its differences with Azerbaijan. Indeed, the two Turkic countries together operate a trade embargo against their neighbour, Armenia, which is naturally particularly damaging to it. But there is a potential saviour at hand - the European Union (EU).
President Robert Kocharian in December was on a two-day visit to Brussels to press them for a quicker rapprochement with the south Caucasus countries, despite recent problems between the EU and Baku. 

A spanner in the works
Azerbaijan has angered EU member state, Cyprus, by allowing commercial flights to the internationally unrecognised Northern Cyprus. The tussle has thrown a spanner into EU preparations to extend neighbourhood policy "action plans" to the region.
The problems between Azerbaijan and EU-member Cyprus come as a very unwelcome development for Armenia. 
The EU is in the habit of preferring to deal with entire regions, not single countries at a time. As a result, both Armenia and Georgia have discovered that their EU neighbourhood "action plans" -- paving the way for closer political cooperation and greater economic aid -- are held hostage to the spat between Baku and Nicosia.
Initial hopes that the "action plans" could be negotiated and signed by the end of the year have begun to recede. "It would be strange if the start of the planned talks between the [European] Commission and Armenia on the draft action plan remained blocked by the dispute between Cyprus and Azerbaijan over flights to Northern Cyprus, since that dispute does not concern Armenia."
The unhappiness in the reactions of Armenian diplomats has been palpable in recent weeks. The country's president, Robert Kocharian, is making sure that unhappiness is being felt by his hosts.
EU foreign policy chief Javier Solana offered solace, but no guarantees of a quick breakthrough. "I hope very much that the neighbourhood policy that we have established in the European Union will be a constructive and positive help for Armenia in their relations with the European Union," he said. "As you know we have not fully started the negotiations, but we hope very much that will be done in the foreseeable future."
EU member states retain full sovereignty in the area of external relations and a single country can theoretically block any decision. The Greek government of Cyprus held out for a long time before giving its consent to EU membership talks with Turkey. Nicosia is likely to face far lesser pressure in the EU in its dealings with Turkey's more remote ally, Azerbaijan.
Josep Borrell, the president of the European Parliament, has this to say: "It would be strange if the start of the planned talks between the [European] Commission and Armenia on the draft action plan remained blocked by the dispute between Cyprus and Azerbaijan over flights to Northern Cyprus, since that dispute does not concern Armenia. We have been talking about that with the president and I told him of my strong commitment that these talks should be starting at the planned time."
However, Borrell's support is of little practical value to Kocharian, as the parliament has no say in EU foreign policy decisions.
Nevertheless, the parliament has a role to play in shaping the political climate in the EU and thus indirectly helps shape longer term decisions. Borrell pointed to earlier efforts by the parliament that helped secure the southern Caucasus an EU special representative, and forced the EU to include the three countries in the neighbourhood policy.
The European Parliament has also been vocal in calling on Turkey to open its border with Armenia and recognize the Armenian genocide. Borrell recalled that the parliament had adopted a resolution calling for the steps before EU entry talks were launched with Turkey.
"The parliament has already set out a declaration on the opening of negotiations with Turkey," Borrell said. "We have already said whatever we think we should have said. And the opening of the border and the recognition of the Armenian genocide was [mentioned] in that resolution, that the parliament strongly requires these as a condition. But this is the point of view of the parliament, we will have to see."

The US is on side - but there is a warning
There is one unswerving supporter of Armenia, the United States (US), where there are more Armenians in the Diaspora than in Armenia itself. Every ethnic Armenian vote counts.
It, nevertheless, lays down conditions for its support.
The US has approved US$235.65 million in additional economic assistance to Armenia but made its release conditional on "corrective steps" that would improve Yerevan's human rights and democracy records. 
A US government agency that administers the Millennium Challenge Account (MCA), a multimillion-dollar scheme designed to reward economic and political reforms in the developing world, expressed concern about the Armenian government's handling of the recent constitutional referendum. In a statement released in Washington, the Millennium Challenge Corporation (MCC) called into question the government's commitment to democracy and good governance, citing serious irregularities reported during the November 27th vote. 
"MCC is concerned about the government's lack of transparency and commitment to open and fair elections in the recent referendum," its chief executive, John Danilovich, was quoted as saying. 
Danilovich conveyed those concerns to President Robert Kocharian recently in a letter that was made public by MCC along with its statement. He told Kocharian that the MCC board, which comprises US Secretary of State, Condoleezza Rice, delayed its decision on Armenia's MCA application in November as a result of "allegations of fraud, electoral mismanagement, mistreatment of individuals from opposition political parties and uneven access to the media." 
"We believe that corrective steps should be taken to demonstrate the Armenian government's commitment to the fundamental principles underpinning Armenia's eligibility for MCA assistance," Danilovich wrote. "The MCC Board is engaged on this issue and we will seek their assessment of any actions taken." 
The MCC chief said the Kocharian administration should respect Armenian citizens' constitutionally guaranteed freedom of assembly and "access to information from independent media and other sources." He also called on the authorities to investigate the latest allegations of electoral fraud and "improve the fairness and transparency of the political and electoral process in Armenia in advance of the 2007-2008 parliamentary and presidential elections." 
"A failure to take such concrete actions could result in a suspension or termination of the Compact pursuant to MCC policy," warned a separate MCC statement. 
However, US officials would not say what specifically the authorities should do in the coming weeks to kick-start the implementation of the five-year aid package aimed at reducing rural poverty in Armenia. They indicated only that the MCC board will await Yerevan's response to Danilovich's letter before meeting to decide how to proceed. 
"Keeping the MCC process on track with Armenia will require the Armenian government to invigorate its commitment to bolstering democratic institutions," the US charge d'affaires in Yerevan, Anthony Godfrey, told RFE/RL. "We hope and we expect that there will be a positive response and we will be able to move forward and implement these projects." 
According to the MCC director for Eastern Europe and Asia, Stephen Groff, such a response would pave the way for the formal launch of the hefty aid scheme at the beginning of next year. "If all of these things happen expeditiously, we could be signing the [MCA] compact with the government of Armenia early next year," he told RFE/RL in Washington. "But at this point, it's in the hands of the government of Armenia as to how expeditiously that will happen." 
The assistance programme, worth nearly one third of Armenia's 2005 state budget, is based on the Armenian government's proposals submitted to MCC last spring. The government initially asked for US$175 million from the corporation. The sum was considerably increased during subsequent US-Armenian negotiations. 
Most of the MCA funds, US$146 million, would be spent on rebuilding and expanding the country's battered irrigation networks. Officials say improved water supply would significantly benefit as many as 250,000 farm households. The government would also like to receive US$67 million for refurbishing about 1,000 kilometres of rural roads that have fallen into disrepair since the Soviet collapse. The project is meant to improve farmers' access to markets and services. The remainder of the sum approved by the U.S. aid agency, US$23 million, would be used for program administration and evaluation. 
The proposed use of extra American aid has been repeatedly praised by US officials. "They have developed an integrated, results-oriented programme that will provide rural residents better access to jobs, social services, and markets and increase the productivity of farmers," said Danilovich. 
One of the authors of that programme, Deputy Finance Minister, Tigran Khachatrian, held a news conference in connection with the decision announced by the corporation. "It is expected that as a result of the implementation of this programme the rural poverty rate will fall from 41 per cent to 35 per cent within five years," he said. 
In Godfrey's words, the assistance projects will also cement growing ties between Armenia and the United States. "The MCC announcement is an important milestone, and it demonstrates a big step forward in our relationship," he said. 
Armenia has already been one of the world's leading per-capita recipients of US economic assistance which has totalled over US$1.5 billion since 1992. It is due to receive at least US$75 million in regular US aid allocated by Congress this year. The effectiveness of its Washington lobbyists is generally held to be second only to those of Israel.
Armenia is among 16 low-income countries of the world that have been eligible for MCA funding ever since the scheme was unveiled by the administration of President George W. Bush in 2004. The Bush administration has already allocated more than US$900 million to five of those nations, including Georgia.

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ENERGY

Armenia's first nuclear power plant resumes 

Armenia's only nuclear power plant resumed after a six-week shutdown for maintenance and refuelling, the plant's General Director, Gagik Markosyan, announced on November 17th, Interfax News Agency reported.
Markosyan said the plant's sole working reactor started on November 16th without difficulties after being refuelled with US$14.5 million in nuclear fuel supplied by Russia. Immediately after startup, Armenian security forces conducted an exercise at the plant to train against a hypothetical terrorist threat, he said. Armenia was under international pressure from the European Union to shut the plant down due to safety concerns, but officials resisted the call as the plant supplies nearly 40 per cent of the nation's electricity. President Robert Kocharian said recently that the country intended to build a new nuclear plant.

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FOREIGN COOPERATION

Yerevan, Moscow to boost scientific cooperation 

A scientific practical conference titled "Armenia-Russia - Sight to the Future - Cooperation Technology" opened on November 29th in Yerevan, Interfax News Agency reported.
At the inauguration ceremony, Russian ambassador to Armenia, Nikolay Pavlaov, said that the conference, which was organised as part of the Year of Russia in Armenia, is unusual for its idea to increase cooperation between Armenian and Russian NGOs. The event was organised by the Russian Centre for International Scientific and Cultural Cooperation affiliated to the Russian Foreign Ministry in association with the Armenian Society for Cultural Cooperation with Foreign Countries and European Forum. Pavlov said the participants had plenty to discuss regarding the situation in South Caucasus, ways in which to solve problems and about their perception of the part NGOs play in these processes.

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FOREIGN TRADE

Iranians, Armenians meet on trade in Yerevan 

Mazandarani businessmen from the private sector recently held a seminar with their Armenian counterparts and officials in Yerevan on the sidelines of an exclusive Mazandaran exhibition, Interfax News Agency reported. 
Officials from both countries' chambers of commerce as well as businessmen and participants in the exhibition surveyed grounds for cooperation and establishment and development of trade and economic ties. The one-week exhibition was held in seven specialised groups like tourism and handicrafts, food industries, machinery, home appliances, animal husbandry and construction industries. 

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INFORMATION TECHNOLOGY

Alcatel to open centre in Armenia 

A summit on the future of the Internet opened in Tunisia with a welcome speech by Zine El Abidine Ben Ali, president of Tunisia, where the UN-organised World Summit on the Information Society (WSIS) brought together government delegations from around 170 countries. At the summit, Armenia was represented by a delegation led by Prime Minister, Andranik Margarian. On the sidelines of the summit, Alcatel, the world's leading telecom equipment supplier under ethnic Armenian Serge Tchuruk, announced theopening of a regional centre in Armenia. Alcatel and the Armenian Enterprise Incubator Foundation (EIF) recently signed a memorandum to this effect in Tunis. Tchuruk and Armenian Deputy Trade and Economic Development Minister, Tigran Davtian, signed the memorandum. Tchuruk, who has managed the French group for the past decade, met with President Robert Kocharian and Margarian in Yerevan. He was quoted by official sources as saying that he was ready to help launch "certain programmes on the research and introduction of innovative technologies" in Armenia, New Europe reported.

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