Country Profile: Armenia

Armenia's birth as a modern independent nation began with the implosion of the old Soviet Union in 1991.

Despite close ties with the United States since its independence on Dec. 25, 1991, Armenia has been racked by political strife, economic woes and natural calamities.

Chief among its concerns is a continuing conflict with neighboring Azerbaijan over a mountainous region called Nagorno-Karabakh. Although the contested area is populated mainly by Orthodox Christian Armenians, the Soviets had assigned the area to Azerbaijan — a predominantly-Muslim republic.

When both former Soviet satellite countries gained their independences in 1991, fighting in the region increased when Armenians in Nagorno-Karabakh voted to secede from Azerbaijan. By 1993, Armenia had gained control of about one-fifth of Azerbaijan territory — including the contested region.

Both countries are abiding by a 1994 United Nations cease-fire, enforced by a multinational peacekeeping force, which includes troops from the United States. But the economic damage to both countries — especially to Armenia — has been done.

Although Armenia had been able to develop a modern industrial sector while under the Soviet economic system, moving away from the old central planning system favored by its former Communist masters has been difficult at best.

Also, the small nation (about the size of Maryland) has precious little natural resources and is landlocked — blocked from importing goods by open sea ports in neighboring Azerbaijan, Turkey, and Georgia.

Adding to the woes is Armenia's natural disasters. A major earthquake in 1988 left an estimated 25,000 dead and 500,000 homeless. Armenia has been able to survive such disasters only through generous aid from other countries, such as the United States, and international relief organizations.

An ambitious economic program, sponsored by the International Monetary Fund in 1994, has helped Armenia population of 3.3 million realize positive growth.

However, the challenges for the Armenian government will remain large. President Robert Kocharian, elected in a special election in March 1998, will need to continue to build upon economic reforms to reduce the estimated $862.7 million in foreign debt.