Armenias economy Essay

Submitted By sweetery
Words: 627
Pages: 3

Armenia is a mountainous country in the south caucuses region of Eurasia. It is a unitary, multi-party, democratic nation-state with an ancient cultural heritage, and often times is referred to as the “first Christian nation”. However, from 1920-1991, Armenia enjoyed little to zero prosperity culturally, economically, and socially under the presiding USSR. Economically, as this is the main focus of this report, the centralized system under the Soviets banned private ownership of income producing property. Agriculture made up more than 100% of the economy, as privately owned farms were collectivized and put in the hands of the state, which was often resisted by opposing peasants. Overall, Armenia’s economy showed little to no progress, until its final independence in 1991, which in turn brought about a new day in the economic chapter of Armenia.
Until independence, in the 80’s to 90’s, Armenia's economy was based largely on an industrial run agenda via the Soviet Union. Chemicals, electronic products, machinery, processed food, synthetic rubber, and textiles made up a vast majority of the economy, as it was it highly dependent on outside resources. By the 1980’s, agriculture accounted for only 20% of net material product and 10% of employment before the breakup of the Soviet Union in 1991. This of course a drastic decrease since the USSR”s initial takeover in 1920, which may have been an early indicator of successful resistance of peasants. When the USSR finally gained independence in 1991, the economy reacted erratically. Stock increased and decreased as free capitalism was instilled for the first time in Armenia’s history. The national currency, the dram, suffered hyperinflation for the first few years after its introduction in 1993. (Excitement, strong sense of nationalism). By 1994, however, the Armenian Government had launched an ambitious IMF-sponsored economic program that in turn resulted in positive growth rates in 1995-99. Armenia registered strong economic growth with a steady GDP growth rate of 5% from 1995-2000, while keeping inflation negligible for the past several years. Since then, new sectors, such as precious stone processing and jewelry making and communication technology have helped the economy.
The present economy relies on manufacturing, services, remittances, and agriculture. Armenia has also since joined the World Trade Organization (WTO) (January 2003). According to official figures, Armenia’s economy grew by 12.7 percent in 2005, and 13.8 percent in 2007. Germany is Armenia’s largest trading partner among EU member states to date, accounting for 7.2 percent of trade; due largely to mining exports. Furthermore, in 2007, cash