Armenia is located between the Black Sea and the Caspian Sea. It borders Georgia, Azerbaijan, Iran, and Turkey. Its economy is at position 132 worldwide whereas, in terms of purchasing power parity, it is ranked 129th. It is the second most densely populous state of the former Soviet states. Armenia was admitted to IMF in 1992 and to the World Bank also in 1992.The economy is largely based on industries such as mining, jewelry, agriculture, textile, and tourism. The Armenian chamber of commerce and industry plays a vital role in supporting and regulating the industries. There are also other industries such as the agro-industry, the software manufacturers and the drug and pharmaceutical industries which have a huge impact on the economy. The following are some of the most important industries in Armenia.
Armenia’s economy is largely supported by the mining industry, with the sector having contributed 50% of the country’s exports in 2011. Major minerals include molybdenum, diamond, and copper which are found in Lori province. Gold deposits are also mined. Other minerals found in smaller quantities are lead, silver Zinc, granite, gypsum, limestone, basalt, and diatomite. In 2011, Chinese investors applied for a go-ahead to invest $500M in the Armenian mineral industry. Despite the economic recession in 2011, the revenues have grown significantly.
Armenia has 2.1 million hectares of arable land for both crop and livestock production. Orchards, as well as vineyards, occupy 16% of the land. Of all the employed people in 2006, 46% were in the agriculture industry. This was a huge turnaround from 1991 when the country imported more than 65% of food requirements. The growth in agriculture had been contributed by the 1990 laws which gave land to private farmers. In 2010 agriculture contributed up to 25% of the country’s GDP. In 2006, the contribution was 20% of the GDP. The drop was due to adverse weather and the government’s failure to offer stimulus initiatives to farmers. The soil which is basically volcanic supports the growth of wheat, barley, and fruits like figs, apricot, olives, and Pomegranates. In 2006, the production of grains was 212,500 tons, fruits 286,000 tons while vegetables 915,000 tons. Livestock like sheep, goats, and horses are common in the country.
Tourists visiting Armenia every year have reached millions since 1990. Most of these tourists are from Russia, Iran, Georgia, and the United States. The main attractions are the UNESCO accredited heritage sites namely Monastery of Geghard and Upper Azat Valley which contains many churches and tombs including the Echmiatsin cathedral which greatly influences modern architecture and the Haghpat and Sanahim Monasteries. Armenians organizes events and festivals to promote tourism such as Golden Apricot and Pan – Armenian games. Tourists also enjoy site seeing as well as relaxing in modern hotels. However, tourism sector faced numerous challenges in the 1990s due to the Spitak earthquake and shortage of energy not to forget the Karabakh- Nagorno War which led to the closure of the airports.
The Textiles And Apparel Industry
The textile industry is among the most ancient economy drivers that were based on knitting, clothing technology and dressmaking. Carpet and leather shoes are also produced. On February 16, 2017, the United Nations Industrial Development Organization (UNIDO) agreed to finance the textile and apparel industry to the tune of $ 2 million to boost small and medium enterprises SME to increase sales and enhance the growth of the leatherwork and shoe production. In 2014, many young people were trained on design and large-scale production of high-end garments.
Information Technology Industry
Despite the slow growth after the collapse of the Soviet Union, the IT industry has recorded a growth due to the highly competent workforce and the several ICT companies investing highly in Armenia. Education is highly enhanced up to university level with modern institutions such as Yerevan State University and the American University in Armenia. Microsoft Innovation Center (MIC) has also established an office to impact skills, offer job vacancies, and enhance research and development. IBM innovation solutions and technology center and the Gyumri technology center also build expertise and knowledge to upcoming IT companies.
Due to vast deposits of gold and diamond, Armenia makes and exports numerous ornaments. In 1998, Armenia Jewelers Association (AJA) was formed with the mandate to ensure production of quality and competitive ornaments, look for favorable markets globally and legislative aspect of the industry. In 2007, Jewelry contributed $72.7 million to the economy.
Armenia imports most of its energy because it does not have oil fossils reserves. Electrical energy is in excess largely due to the contribution of the nuclear energy and imports from Russia. The Metsamor nuclear power plant contributes 42.9% of the electricity requirements. The wind power, hydropower, and natural gas also add to the national grid. Partnership with Iran through the Iran–Armenian oil pipelines have also added to the energy levels. Thermal power stations contributed 24% of the electricity requirements. By the year 2020, the Ministry of Energy is hoping to have completed the Meghri HPP project which will add another 140 watts. The Jarmaghbyur Geothermal Power Plant will also add another 150 Watts.
Statistics indicate that in June 2004 there were over three million Armenians connected to mobile telephony, translating to 120% access. The three big telecommunication companies are Viv cell MTS, Ucom, and Beeline. Each offers up to the fastest 4G services. The telecommunication industry is well developed and one can get all services including sim cards, mobile phones, and access and tariffs. There is also the trans-Asia Europe fiber optic cable. Radio and television services are also available through a network of private operators. Internet services are also available with over 1.4 million users. By the year 2010, there were in excess of 100,000 broadband subscribers.
Armenia has the ability to produce chemicals such as technical rubber, painting chemicals, cosmetics and perfumes, household and industrial chemicals as well as acids and oxides.For instance, in 2003, manufacture of paint materials increased by 25% though there was a drop by half of synthetic rubber and washing chemicals. Nairit Company was the first chemical production industry that went down after the Soviet Union crushed. Currently, the government is wooing foreign investors to assist in promotion of the chemical industry.
There are more than 21 commercial banks employing thousands of people in Armenia. In 2005, the total banking assets grew by 10.3%. Over the years, there has been an increase in loans granted by the banks and deposits mobilized, hence an upward trend in profitability. The banks have modern systems with stringent laws that regulate and license the industry under the watch of the regulator - the Central Bank of Armenia.