U.S. Department of State
Background Notes: Armenia, March 1996

Official Name: Republic of Armenia

U.S.-Armenian Relations
The dissolution of the Soviet Union in December 1991 brought an end to the Cold War and created the opportunity to build bilateral relations with the New Independent States (NIS) as they began a political and economic transformation. The U.S. recognized the independence of Armenia on December 25, 1991, and opened an embassy in Yerevan in February 1992.

The United States has made a concerted effort to help Armenia and the other NIS during their difficult transition from totalitarianism and a command economy to democracy and open markets. The cornerstone of this continuing partnership has been the Freedom for Russia and Emerging Eurasian Democracies and Open Markets (FREEDOM) Support Act, enacted in October 1992, under which the U.S. to date has provided nearly $500 million in humanitarian and technical assistance for Armenia.

In addition, the U.S. has played a leading role in the Minsk Group, which was created in 1992 by the Conference of Security and Cooperation in Europe -- now the Organization for Security and Cooperation in Europe (OSCE) -- to encourage a peaceful, negotiated resolution to the conflict between Azerbaijan and Armenia over the Nagorno-Karabakh region. That conflict has cost several thousand lives, created nearly one million refugees and displaced persons, and caused economic hardships for Armenia.

U.S.-Armenian Economic Relations
In April 1992, the U.S. and Armenia concluded a trade agreement which provides reciprocal most-favored-nation status to the products of each country and guarantees intellectual property protection.

An Overseas Private Investment Corporation agreement with Armenia, which encourages U.S. private investment by providing direct loans and loan guarantees and by assisting with project/investor matching, entered into force in April 1992. A bilateral investment treaty was signed on September 23, 1992, and was ratified by the Armenian parliament in September 1995. Armenia has also expressed interest in negotiating a tax treaty and is receiving U.S. technical assistance in revising its tax structure.

U.S. Support To Build A Market Economy
The U.S. continues to work closely with international financial institutions like the International Monetary Fund (IMF) and the World Bank to help Armenia in its transition to a free-market economy. Armenia has embarked upon an ambitious reform program, which should eventually allow a move away from humanitarian aid toward more development assistance. U.S. economic assistance programs have three objectives: to help create a legal, regulatory, and policy framework for competition and economic growth in energy, agriculture, housing, and other sectors; to promote fiscal reform; and to develop a competitive and efficient private financial sector. The Peace Corps is also very active in Armenia, with a focus on small business development and English language education.

The U.S. Department of Agriculture's (USDA) Extension Program provides advisory services and support to private farmers in all Armenian provinces, facilitates the formation of farmer associations and marketing initiatives, and has laid the groundwork for several agribusiness associations. USDA's Cochran Fellowship Program provides training to Armenian agriculturists. USDA and USAID have also launched an effort to revive production and export of Armenian vegetables and fruits. Under the Farmer-to-Farmer Program, Volunteers for Overseas Cooperative Assistance provides production and marketing assistance to Armenia's farmers, including the first farmer-owned winery, which is now producing and selling wine under its own label.

USAID's Energy-Sector Reform Project funded technical assistance and training (implemented by a resident energy advisor), feasibility and technical studies, and the purchase of critically needed equipment and commodities to support the Armenian energy sector's transition to a market economy.

The International City/County Manager Association (ICMA), also funded by USAID, facilitates the drafting and enactment of laws that promote the development of a private housing market, including a mortgage law, a condominium law, and a draft real estate law. Largely because of ICMA's efforts, more than half of all public housing in Yerevan has been privatized.

The Eurasia Foundation, working with a local bank in Yerevan, has established the first line of credit for small to medium-sized enterprises in Armenia. Lending began in late 1995, backed by a $2 million grant from USAID.

U.S. Humanitarian Assistance
The United States provided $138 million in assistance to Armenia in FY 1995, the highest per capita amount in the NIS. Humanitarian aid accounted for 85% of this total, reflecting the economic effects caused by Turkish and Azerbaijani embargoes related to the Nagorno- Karabakh conflict, destruction in northern Armenia left from the devastating 1988 earthquake, and the virtual paralysis of most of the country's factories. In 1995, this aid included 138,000 tons of wheat, 25,000 metric tons of kerosene, and 81,000 tons of mazout (low-grade fuel oil), which was especially crucial during the cold winter months when electricity was available for only two to four hours a day in the cities and is virtually unavailable elsewhere. The U.S. Kerosene Program, administered by USAID, targets 210,000 of the most poverty-stricken families throughout Armenia, as well as 1,100 schools. The U.S., in collaboration with U.S.-based private voluntary organizations, also organized nine flights and shipped 202 containers by surface to Armenia to supply food, medicine, and clothing valued at $28 million.

U.S. Support To Achieve Democracy
Technical assistance and training programs have been provided in municipal administration, intergovernmental relations, public affairs, foreign policy, diplomatic training, rule of law, and development of a constitution. Specific programs are targeted at promoting free and fair elections, strengthening political parties, and promoting the establishment of an independent judiciary and independent media. Educational exchange programs play an important role in supporting democratic and free-market reforms. Assistance in the translation and publication of printed information also has been provided.

The U.S. Information Agency (USIA) sponsored in 1995 a range of exchange programs in the U.S. for Armenian lawyers, judges, political party members, and journalists to study the American judicial and political system and participate in programs on privatization, the media, and civil society. USIA continues to support Hai-FM, an independent, privately owned radio station that ran voter education programming before the July 1995 elections. In addition, USIA also funded a project by the National Democratic Institute (NDI) to print several thousand brochures showing people how to participate in the elections.

USAID helped fund international and domestic groups to monitor the parliamentary elections held July 1995. USAID has also funded programs run by NDI to monitor the July elections and strengthen an array of democratic and civic organizations.

The U.S. embassy in Yerevan, Armenia is at 18 Marshal Bagramyan; tel: 3742-151-144 or 3742-524-661; fax: 3742-151-138.

Historical Highlights
After the destruction of the Seleucid Empire, the first Armenian state was founded in 190 BC. At its zenith, from 95 to 55 BC, Armenia extended its rule over the area of what is now eastern Turkey. For a time, Armenia was the strongest state in the Roman East. It became part of the Roman Empire and adopted a Western political, philosophical, and religious orientation.

In 301 AD, Armenia became the first nation to adopt Christianity as a state religion, establishing in the 6th century a church that still exists independently of both the Catholic and the Eastern Orthodox churches. During its later political eclipses, Armenia depended on the church to preserve and protect its unique identity.

Between the 4th and 19th centuries, Armenia was conquered and ruled by, among others, Persians, Byzantines, Arabs, Mongols, and Turks. For a brief period from 1918 to 1920, it was an independent republic. In late 1920, the communists came to power, and in 1922, Armenia became part of the Trans-Caucasian Soviet Socialist Republic. In 1936, it became the Armenian Soviet Socialist Republic. Armenia declared its independence from the Soviet Union on September 23, 1991.

Armenia is the second most densely populated of the former Soviet republics. It is a landlocked country between the Black and the Caspian Seas, bordered on the north and east by Georgia and Azerbaijan and on the south and west by Iran and Turkey. Armenia's economy has been based largely on industry -- chemicals, electronic products, machinery, processed food, synthetic rubber, and textiles -- and highly dependent on outside resources. Agriculture accounted for only 20% of net material product and 10% of employment before the breakup of the Soviet Union in 1991. Armenian mines produce copper, zinc, gold, and lead. About 95% of energy is imported; the main domestic energy source is hydroelectric. Small amounts of gas and petroleum could be developed.

Like other New Independent States, Armenia's economy suffers from the legacy of a centrally planned economy and the breakdown of former Soviet trading patterns. In addition, the effects of the 1988 earthquake, which killed more than 25,000 people and made 500,000 homeless, are still being felt. Finally, the ongoing conflict with Azerbaijan over Nagorno-Karabakh has led to a blockade which has devastated the economy because of Armenia's dependence on outside supplies of energy and most raw materials. Land routes through Azerbaijan and Turkey are closed; routes through Georgia and Iran are inadequate or unreliable. In 1992-93, GDP fell nearly 60% from its 1989 level.

Nevertheless, the Government of Armenia, helped by the cease-fire that has been in effect in Nagorno-Karabakh since 1994, has been able to carry out wide-ranging economic reforms which paid off in dramatically lower inflation. Armenia also registered strong economic growth in 1995, building on the turnaround that began the previous year.

In December 1994, the IMF approved the first tranche of a systemic transformation facility to support Armenia's macroeconomic reform program. As part of the program, the government pledged to strengthen its macroeconomic management (including increasing revenue collection), move toward full price liberalization, eliminate most exchange and trade restrictions, and accelerate the privatization process.

Privatization in agriculture has gone furthest. About 87% of farm land has been distributed, and the sale of land has been permitted since February 1994. Privatization in other areas of the economy is moving more slowly. Distribution of privatization vouchers began in October 1994; the government accelerated the pace of small-scale privatization and began to convert larger enterprises to joint stock companies as a first step toward full privatization. More than half of the housing stock has been privatized. Most prices have now been completely liberalized.

A liberal foreign investment law was approved in June 1994. A national currency, the dram, was introduced in late November 1993 and was very stable in 1995.

Environmental Issues
Armenia is trying to address its environmental problems. It has established a Ministry of Environment and has introduced a pollution fee system by which taxes are levied on air and water emissions and solid waste disposal, with the resulting revenues used for environmental protection activities. Armenia is interested in cooperating with other members of the Commonwealth of Independent States (a group of 12 former Soviet republics) and with members of the international community on environmental issues.

Government And Political Conditions
Armenians voted overwhelmingly for independence in a September 1991 referendum, followed by a presidential election in October 1991 that gave 83% of the vote to Levon Ter-Petrossian. Ter-Petrossian had been elected head of government in 1990, when the Armenian National Movement defeated the Communist Party. The next presidential elections are slated for the fall of 1996.

The government is dominated by the anti-communist, nationalist Armenian National Movement, which is the largest party in the parliament. Opposition parties exist but have limited support. In November 1990, the Armenian Communist Party declared itself independent. In 1991, after the August coup in Moscow, a large group of party members split from the Armenian Communist Party and formed a separate Democratic Party.

The Government of Armenia's stated aim is to build a Western-style parliamentary democracy as the basis of its form of government. However, international observers questioned the inherent fairness of the parliamentary elections and constitutional referendum conducted in July 1995, citing polling deficiencies, lack of cooperation by the electoral commission, and the failure to register opposition parties and candidates. Observers noted, though, that several opposition parties and candidates were able to mount credible campaigns and proper polling procedures were generally followed. The new constitution greatly expands the powers of the executive branch and gives it much more influence over the judiciary and municipal officials.

The observance of human rights in Armenia is uneven and was marked by serious shortcomings in 1995. Police brutality goes largely unreported, while observers note that defendants are often beaten to extract confessions and are denied visits from relatives and lawyers. Public demonstrations usually take place without government interference, though one rally in June 1995 by opposition parties was broken up by paramilitary troops. Freedom of religion is not protected under existing law. Non-apostolic churches have been subjected to harassment, sometimes violently. Non-apostolic churches must register with the government, and proselytizing is forbidden by law. Most of Armenia's ethnic Azeri population was deported in 1988-89 and remain refugees, largely in Azerbaijan. Armenia's record on discrimination toward the few remaining national minorities is generally good. The government does not restrict internal or international travel. Although freedom of the press and speech are guaranteed, the government maintains its monopoly over television and radio broadcasting.

Armenia's embassy in the U.S. is at 2225 R Street, NW, Washington, DC, 20008; tel: 202-319-1976 or 202-319-2983; fax: 202-319-2984.

Defense And Military Issues
Armenia established a Ministry of Defense in 1992. Border guards subject to the ministry patrol Armenia's borders with Georgia and Azerbaijan, while Russian troops continue to monitor its borders with Iran and Turkey.

The Conventional Armed Forces in Europe (CFE) Treaty was ratified by the Armenian parliament in July 1992. The treaty establishes comprehensive limits on key categories of military equipment, such as tanks, artillery, armored combat vehicles, combat aircraft, and combat helicopters, and provides for the destruction of weaponry in excess of those limits. Armenian officials have consistently expressed determination to comply with its provisions. Armenia has provided data on armaments as required under the CFE Treaty. There are indications that Armenia is trying to establish mechanisms to ensure fulfillment of its arms control obligations. Armenia is not a significant exporter of conventional weapons, but it has provided substantial support, including materiel, to separatists in the Nagorno-Karabakh region of Azerbaijan.

In March 1993, Armenia signed the multilateral Chemical Weapons Convention, which calls for the eventual elimination of chemical weapons. Armenia acceded to the Nuclear Non-Proliferation Treaty as a non-nuclear weapons state in July 1993. The U.S. and other Western governments have discussed efforts to establish effective nuclear export control systems with Armenia.

Foreign Relations
Armenia is a member of the Commonwealth of Independent States, the United Nations, the Organization for Security and Cooperation in Europe, NATO's Partnership for Peace, the North Atlantic Cooperation Council, the International Monetary Fund, and the International Bank for Reconstruction and Development.

In 1988, the territory of Nagorno-Karabakh, a predominantly ethnic Armenian enclave within Azerbaijan, voted to secede and join Armenia. This eventually developed into a full-scale armed conflict. Armenian support for the separatists led to an economic embargo by Azerbaijan, which has crippled Armenia's foreign trade and restricted its imports of food and fuel, three-quarters of which transited Azerbaijan under Soviet rule.

Peace talks in early 1993 were disrupted by the seizure of Azerbaijan's Kelbajar district by Nagorno-Karabakh Armenian forces and the forced evacuation of thousands of ethnic Azeris. Turkey in protest then followed with an embargo of its own against Armenia. President Ter- Petrossian has thus far resisted domestic pressure to recognize the self- proclaimed independence of the "Nagorno-Karabakh Republic." Some 750,000 ethnic Azeris who fled during the Karabakhi offensives still live as internally displaced persons in Azerbaijan, while roughly 400,000 ethnic Armenians who fled Azerbaijan since 1988 remain refugees.

Negotiations to peacefully resolve the conflict have been ongoing since 1992 under the aegis of the Minsk Group of the OSCE. The Minsk Group is currently co-chaired by Finland and Russia and comprises Armenia, Azerbaijan, Turkey, the U.S., several Western European nations, and representatives of the Armenian and Azeri communities of Nagorno-Karabakh. The talks have focused on the status of Nagorno- Karabakh, the return of refugees, the lifting of blockades, the withdrawal from occupied territories, and the status of the Lachin corridor, which connects Nagorno-Karabakh to Armenia.

Karabakhi Armenians, supported by the Republic of Armenia, now hold about one-fifth of Azerbaijan and have refused to withdraw from occupied territories until an agreement on the status of Nagorno- Karabakh is reached. Armenia and Azerbaijan continue to observe the cease-fire which has been in effect since May 1994, and in late 1995 both also agreed to OSCE field representatives based in Tbilisi, Georgia to help facilitate the peace process. The United States has supported OSCE efforts to work toward deploying a multinational peacekeeping operation for the region as part of a broader political settlement.

Travel And Business Information
The U.S. Department of State's Consular Information Program provides Travel Warnings and Consular Information Sheets. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country. Consular Information Sheets exist for all countries and include information on immigration practices, currency regulations, health conditions, areas of instability, crime and security, political disturbances, and the addresses of the U.S. posts in the subject country. They can be obtained by telephone at (202) 647- 5225 or by fax at (202) 647-3000. To access the Consular Affairs Bulletin Board by computer, dial (202) 647-9225, via a modem with standard settings. Bureau of Consular Affairs' publications on obtaining passports and planning a safe trip abroad are available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Emergency information concerning Americans traveling abroad may be obtained from the Office of Overseas Citizens Services at (202) 647-5225.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at (404) 332-4559 gives the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled Health Information for International Travel (HHS publication number CDC- 95-8280, price $14.00) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and customs regulations, legal holidays, and other items of interest to travelers also may be obtained before your departure from a country's embassy and/or consulates in the U.S.

Upon their arrival in a country, U.S. citizens are encouraged to register at the U.S. embassy (see "Principal U.S. Embassy Officials" listing in this publication). This may help family members contact you en route in case of an emergency.