Landlocked in the Lesser Caucasus Mountains, Armenia is the smallest of the former Soviet Union's republics. It was the first country to adopt Christianity as its state religion. It is bordered by Muslim states to the south, east, and west. Keen to deepen links with the rest of the CIS, Armenia has kept to a path of radical economic reform, including privatization. The confrontation with Azerbaijan over the enclave of Nagorno Karabakh has dominated national life since 1988.

Minority nationalities are well integrated in Armenia. There are strong contacts with the many Armenian emigrants, numbering nine million in the USA, France, and Syria.

Conflict with Azerbaijan forced 350,000 Armenians in Azerbaijan to return to Armenia and 190,000 Azeris in Armenia to return to Azerbaijan.

Strengths

Strong ties with Armenian emigrants. Deposits of rare metals, currently unexploited. Machine building and manufacturing – includes textiles and bottling of mineral water.

Weaknesses

Dependent on imported energy, raw materials, and semi-finished goods. High unemployment and economic stagnation. Widespread corruption.

Armenia became an independent multiparty democracy in 1991 and held its first parliamentary elections in July 1995. A new constitution approved by referendum set up a presidential republic, and in 1996 President Levon Ter-Petrossian was reelected for a five-year term. The war with Azerbaijan, over the issue of whether the Armenian enclave of Nagorno Karabakh inside Azerbaijan should become part of Armenia, has simmered since a 1994 cease-fire. Ter-Petrossian resigned in 1998, after parliament opposed his softer line in search of peace. He was succeeded by Robert Kocharian, a former premier and ex-governor of Nagorno Karabakh. In 1999 the prime minister, RPA leader Vazgen Sarkissian, was shot dead in a dramatic attack on parliament. He was succeeded first by his brother Aram, then in 2000 by Andranik Markarian.

Armenia joined the Council of Europe in 2001. The continuing conflict with Azerbaijan is diplomatically damaging. A Turkish trade embargo has been in place since 1988. Russia signed a treaty of friendship in 1997 but has been less pro-Armenian since the Azeris rejoined the CIS. Work began on a gas pipeline between Iran and Armenia in 1998.

Successes in the fighting over Nagorno Karabakh have increased the profile and autonomy of the army, which includes conscripts on 24-month national service. A cease-fire has broadly held since 1994, but peace talks, revived in 1999–2000, remain inconclusive.

Energy resources are negligible, and mismanagement of the energy industry was deemed to have cost the country $200 million in the 1990s. Vegetables and fruit are grown in fertile lowlands, and grains in the hills; agriculture accounts for as much as a third of GDP.

Environmental groups, backed by the EU, demand the closure of the Medzamor nuclear power plant, declared unsafe after the 1988 earthquake, but reopened in 1995 owing to the energy crisis. HEP generation near Lake Sevan has seriously lowered its water level.

Public transportation was badly hit by a war-induced fuel crisis. Road and rail links with Georgia, connecting with the main east–west corridor, need upgrading.

Hospitals suffer from the erratic electricity supply. Poor sewerage and other services have led to a rise in hepatitis, tuberculosis, and cholera.

The education system, previously conforming to that of the USSR, now emphasizes Armenian history and culture; 12% of the population have received higher education.

Reforms to the legal system introduced in 1999 included the replacement of the Supreme Court by an appeals court. Assassinations of political figures are common.

The richest Armenian people are those living away from Armenia itself, particularly in the USA and France. The many refugees from Baku, Azerbaijan, are the poorest.

The 1700th anniversary of Armenian Christianity in 2001 boosted the war-damaged tourist industry. Most visitors are diaspora Armenians.

Armenia lost its autonomy in the 14th century. In 1639, Turkey took the west and Persia the east; Persia ceded its part to Russia in 1828.

• 1877–1878 Massacre of Armenians during Russo-Turkish war.
• 1915 Ottomans exile 1.75 million Turkish Armenians; most die.
• 1920 Independence.
• 1922 Becomes a Soviet republic.
• 1988 Earthquake kills 25,000. Conflict with Azerbaijan over Nagorno Karabakh begins.
• 1991 Independence from USSR.
• 1994 Cease-fire with Azerbaijan.
• 1995 First parliamentary elections.
• 1998 Kocharian elected president.
• 1999 Shooting of prime minister in attack on parliament.