Republic of Armenia
Hayastani Hanrapetut 'Yun
LOCATION AND SIZE.
Armenia is located in the southwest Caucasus Region, neighboring on Georgia and Azerbaijan to the north, Iran and Turkey to the south, and a separate province of Azerbaijan in the southeast. The total area of the country is 29,800 square kilometers (11,505 square miles), making it about the size of Maryland. The nation's capital is Yerevan, with a population of 1.5 million.
The total population of Armenia was estimated at 3,344,336 people in July 2000. According to the United Nations' Human Development Report , the total population of Armenia in 1993 was estimated at 3.7 million people. Hence the population has dropped since 1993 by more than 350,000 people, or about 10 percent. This decline is the result of a low fertility rate and wide-scale immigration (there are 4.23 migrants per every 1,000 members of the population). Life expectancy at birth for the total population is 66.4 years (61.98 for males and 71.04 for females). The total fertility rate is 1.47 children born per woman, which is below the replacement level, with 10.97 births per 1,000 members of the population. (Replacement level is a term that refers to the number of children a couple must have to replace only themselves. Thus, a man and woman would have 2 children to achieve replacement level. If a society has an overall replacement level of 2, then it has a stable population, neither growing nor shrinking. When women in a society typically have fewer than 2 children on average, this can be a sign of a shrinking population over time.) The infant mortality rate is 41.48 deaths per 1,000 live births.
Ethnic Armenians comprise 93 percent of the population. Other ethnic groups include the Azeris at 3 percent, Russians at 2 percent, and Kurds at 2 percent. Almost 96 percent of the nation's population speak Armenian. Russian is the second most common language, although only 2 percent of the population uses it as their primary form of communication. Orthodox Christianity is the most popular religion. The population density is 137 people per square kilometer (355 per square mile). About 31 percent of the population lives in rural areas and 69 percent in urban areas.
Armenia possesses the second-largest reserves of copper in the world. Other important reserves are molybdenum, zinc, gold, silver, construction stones (mainly granite and marble), and other materials such as betonite, bauxite, perlite, zeolite, and diatomite. In the 19th century, industrial metallurgical mining started in the Alaverdy and Zangezur regions, and during Soviet times these activities increased enormously. In the 1980s, 25 percent of the Soviet molybdenum was supplied by Armenia. In 1991 the mining industry collapsed due to deteriorating conditions in the mines and declines in demand. In 1996, the mining industry started to recover, with production rising 32 percent in the period from 1996-99. From January to June 2000, it rose an additional 16 percent.
After food processing and jewelry and diamond processing, Armenia's mining sector was the third-largest industrial sector and the third-largest exporter. According to the Armenian government, exports of minerals and non-precious metals totaled roughly 23 percent of exports in 1995. Although the mining sector does relatively well, its production and export are well below its potential. The government has prepared a program to increase mining and metal production and to export more semi-finished products because of their higher value added . The major copper-molybdenum companies and the gold company are not yet privatized.
Armenia was the leading chemical producer in the Caucasus in the 1970s, producing synthetic rubber, latex, acids, various glues, and special films mainly for the military sector. In the 1980s the chemical industry employed 24,200 people and accounted for 6.6 percent of the industrial production. The collapse of the Soviet Union, the energy crisis of 1992-93, and the war with Azerbaijan decreased the volume of production by more than 50 percent. In 1999, Armenia imported 6 times as many chemical products and materials as it produced itself. The main chemical export product is rubber, comprising 82 percent of total chemical exports, of which 93 percent went to states of the former Soviet Union. According to expert Jocelyne Decaye, the main weaknesses of Armenia's chemical industry are "high dependence on imported raw materials, obsolete technologies and old production lines, logistical difficulties related to Armenia's location, overstaffing and high costs for transports and electricity."
Armenia's light industry sector was well developed in the 1980s, when it had 115,000 employees and accounted for 25 percent of total industrial production. In the 1990s, however, the share of light industry in the total industrial production declined to under 2 percent. Textile and clothing production make up the most significant activities in this sector.
In 1999, the food processing industry accounted for 39 percent of total industrial output and 61 percent of total manufacturing output. In the 1980s, food processing accounted for only 18 percent of Armenia's total industrial production. The first 5 years of the 1990s saw a rise of nearly 70 percent. The major food products are wine and brandy, with such products as vegetables, fruits, tobacco, potatoes, cotton, grains, and teas making up the rest. Less than 10 percent of the total production is exported (US$16 million in 1999).
The value of services to the Armenian economy increased as a percentage of GDP from 31 percent in 1990 to 35 percent in 1999. The main segments of the service sector include tourism and financial services. Many common Western services do not exist in Armenia. For instance, there are no fast food or retail chains.
During the first 5 years of independence, the tourist industry declined, but since 1996, this trend has reversed itself. Since 1996, the number of tourists has more than tripled but remains low compared to the 1980s (about 21,000 visitors in 1999, including business tourism). The share of tourism as a percentage of GDP was 1.7 percent in 1999. The tourism infrastructure needs substantial development and modernization to keep this industry growing.
During the Soviet period, the State Insurance Company provided mandatory insurance for all citizens. The responsibility to regulate the insurance market now rests in the hands of the Ministry of Finance. The Ministry of Finance provides licenses for insurance companies, and in 2001 some 65 private and state companies were registered. As of 2001, a legal framework concerning the insurance market was still being developed. Domestic and international companies are treated equally under Armenian law.
The banking system accounts for about 10 percent of GDP. In 1999, there were 31 commercial banks. The main foreign banks are Mellat Bank of Iran and Midland Bank of the United Kingdom. Only Midland Bank has established Automated Teller Machines (ATMs), and only a limited number of businesses in the major cities can accept credit cards as a form of payment. The total capital of all commercial banks in Armenia is US$60 million. The largest private bank is HSBC Armenia Bank with assets of US$9 million.
The value of the dram has declined significantly since the 1990s. In 1995, 405.91 drams equaled US$1. However, by 2000 it took 539.53 drams to equal US$1. This decline is the result of the continuing weaknesses in the Armenian economy.
In 1993, the Yerevan Stock Exchange (YSE) was established, which was followed by the establishment of 3 smaller exchanges. However, the total value of these 4 exchanges was only US$1.67 million in 1999.
Armenia has no territories or colonies.
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—Mehdi Parvizi Amineh
Armenian Dram (AMD). One dram equals 100 luma. Coins are in denominations of 1 dram and 50 and 20 luma. Paper currency is printed in denominations of AMD10, 25, 50, 100, 200, 1,000, and 5,000.
Diamonds, scrap metal, machinery and equipment, cognac, and copper ore.
Natural gas, petroleum, tobacco products, foodstuffs, and diamonds.
GROSS DOMESTIC PRODUCT:
US$9.9 billion (purchasing power parity, 1999 est.).
BALANCE OF TRADE:
Exports: US$240 million (1999 est.). Imports: US$782 million (1999 est.).