Before the dissolution of the Soviet Union in 1991, nearly half of Armenia’s companies had engaged in military production. When the Soviet Union began to cut its defense spending in 1990-91, these industries lost their economic base.
The lack of energy and raw materials, as a result of Azerbaijan’s and Turkey’s blockade against Armenia (see Modern History), contributed to the lowering of industrial production during the 1990s.
The manufacturing industry began to slowly recover from 1995, and later also followed parts of the heavy industry. However, Armenia has had difficulty attracting foreign investors.
The largest industrial branches are the engineering industry and the chemical industry. Otherwise, you make electronics, building materials, food (for example wine and brandy), textiles, jewelry (grinding imported diamonds is an old specialty), carpets, shoes and more. Mining and metal processing have seen a boom since the turn of the millennium, with rising copper prices, among other things.
The construction industry experienced a boom during the first millennium of the new millennium, as a result of assistance from, among others, the World Bank and, in particular, the United States-based Lincy Foundation, a private organization run by exile armies. Then a slowdown occurred. The international economic crisis 2008-2009 had repercussions also in Armenia.
In 2017, industry and construction accounted for 26 per cent of gross domestic product (GDP) – the tendency is that the proportion of patients suffer slightly from year to year – and employed about 15 percent of the country’s labor force.
- COUNTRYAAH: List of top trading partners of Armenia. Includes countries that imported most shipments from and exported most goods to the country.
During the Soviet era (1920–1991), Armenia was extremely dependent on trade within the Soviet Union. The Azerbaijani economic blockade of 1989 forced Armenia to find new avenues for its foreign trade, as all export and import must now be through Georgia in the north or Iran in the south.
Diamond grinding is an old Armenian specialty. However, the raw material, uncut diamonds, has to be imported, which is often done through Belgian and Israeli companies that also handle some of the pre-cut diamonds. That is the reason why Belgium and Israel have leading positions in trade statistics. Exports of cut diamonds have fallen since the turn of the millennium, which is mainly said to be due to the dollar being weak and the Americans therefore not buying as much diamonds as before.
Apart from the diamond trade, Armenia’s main trading partner is Russia, which sells oil, gas and nuclear fuel. Armenia, which is heavily dependent on importing energy raw materials, also wants to buy gas and oil from Iran. From Iran come many of the preservatives and consumer goods that can be found in the stores. Some of these goods are believed to come from Turkey in an earlier stage, from where they reach Armenia via Iran or Georgia.
Armenia’s imports have often been much larger than exports, which has created a trade deficit. The most important export goods besides diamonds include machinery, metals and metal products as well as Armenian brandy. Old Soviet industries have been dismantled and exported as scrap metal. The most important import goods, besides oil, gas and rough diamonds, are food and tobacco, although more than these products are now being produced in the country.
Armenia joined the World Trade Organization (WTO) in 2003.
Since 2015, Armenia belongs to the Euro-Asian Economic Union, along with a handful of other former Soviet states. They are also part of a customs union, with mutual free trade and common customs tariffs in trade with other countries.
FACTS – FOREIGN TRADE
US $ 2,630 million (2018)
US $ 4,420 million (2018)
– US $ 1,165 million (2018)
Commodity trade’s share of GDP
59 percent (2018)
Main export goods
metals, minerals, diamonds, food
Largest trading partner
Russia, Germany, China, Iran
Armenia is scenic. There are also medieval monasteries and churches to see, not least along the shores of Lake Sevan.
During the Soviet era (1920–1991), some visitors came from other Soviet republics. Later, attempts have been made to organize tours from Western Europe. Tourism has grown, but it is still bad for good hotels outside the capital Yerevan. The visitors are largely Armenians in exile; there are large groups of ethnic Armenians in Russia, the USA, France and Lebanon, among others.
In Yerevan, new hotels were built for the anniversary year 2001, when it was celebrated that Armenia as the first country to accept Christianity 1,700 years earlier. In conjunction with it, Armenians in the United States made contributions to repair roads and bridges that led to historical monuments and other attractions.
Several monasteries and churches in Armenia are listed on UNESCO’s World Heritage List.
FACTS – TOURISM
Number of foreign visitors per year
US $ 988,000,000 (2016)
The share of tourist income from exports
28.2 percent (2016)
Prison for Opposition Editor
Editor Nikol Pasjinyan is sentenced to seven years in prison for refusing to organize the mass protests in 2008. He later testifies about prison abuse.
Corrupted deputy ministers are dismissed
Two deputy ministers at the Ministry of Health and a senior government official are dismissed for corruption and incompetence. According to President Sargsyan, the audit authorities have found widespread corruption in the Ministry of Agriculture, Finance, Education and Health.
Border battles against Azerbaijan
New battles are reported from the border with Azerbaijan with casualties on both sides.
Russian military presence is extended
Armenia and Russia agree that the Russian military may stay at the military base in Gjumri until 2044. Armenia sees Russia as an ally in the conflict with Azerbaijan over Nagorno-Karabakh.
Selection in switch state
In the Armenian-dominated breakaway enclave Nagorno-Karabakh in Azerbaijan, parliamentary elections are held, which are won by politicians who demand the independence of the enclave.
The agreement with Turkey is shelved
President Sargsyan announces that Armenia has so far postponed ratification of the agreement with Turkey.
Foreign support for recognizing genocide in 1915
The Foreign Affairs Committee of the United States House of Representatives calls on President Obama to recognize the 1915 genocide of the Armenians.
Agreement with Turkey in the danger zone
Parliament gives President Serzh Sargsyan the power to revoke the preliminary peace agreement, as Turkey opposed the wording of genocide.
Agreement with Turkey is slowed
The normalization of relations with Turkey is slowed when the Armenian Constitutional Court suggests that the agreement requires recognition of the 1915 genocide.