Eurasian Economic Union

Background

Armenia is mountainous due to its location in the South Caucasus region of Eurasia. Its ancient cultural heritage comes from its highlands being near the biblical mountains of Ararat. Ararat is the location that Noah's Ark came to rest after the flood. (Bible, Gen. 8:4). There is evidence dating to almost 4000 BC that civilization inhabited Armenia. Essentially, the Kingdom of Armenia was the first state in the world to adopt Christianity as its religion, in the early 6th century.

On 23 August 1990, Armenia withdrew from the Soviet Union and declared its independence. However, Azerbaijan SSR established a railway and air blockade against Armenia early during the Karabakh conflict which has generated economic problems. The blockades effectively crippled Armenia's economy. Railways deliver 85% of Armenia’s cargo and goods. Turkey joined the blockade against Armenia to support Azerbaijan in 1993. Accordingly, relations with Turkey and Azerbaijan remain irregular.

Currently, Armenia is a member of the Eurasian Economic Union (EAEU), the Council of Europe, and the Collective Security Treaty Organization (CSTO). Armenia presently has excellent relations with nearly every country in the world. Today, Armenia maintains close security ties with Russia as a result of membership with the CSTO and EAEU. In fact, Russia has a military base in the city of Gyumri to support Armenia with influencing Turkey.  This helps Armenia’s emerging new economic system to thrive. It is designed to sustain its society with a liberal economy. Hence, Armenia has rapidly expanded its political and economic relations.

Macroeconomic Data

Armenian economic ties with Russia remain close for financial stability, especially in the energy sector. The Central Bank of Armenia has defined financial stability as a condition in which its financial system is able to withstand global shocks and public disruptions. Accordingly, Armenia’s financial system thrives from the following:

Correspondingly, the foreign exchange policy of the Central Bank is aimed at promoting the reliability and international credibility of its currency. Accordingly, the Armenian Dram endorses the legal and economic framework for Armenia’s foreign exchange. The Central Bank continues to effectively manage its currency reserves with foreign investments and flow of capital accounts. Meanwhile, the Armenian Central Bank maintains the appropriate exchange rate of foreign currencies based on rates adopted by its regime. The Eurasian Economic Union sets the legislative background for major foreign investments in Armenia in the future.

Armenia has demonstrated strong economic growth since 1995. Inflation remains insignificant as new sectors, such as precious gemstones attract investors. Stone processing and jewelry making continues to offer major economic incentives.  Growth in this vibrant economic sector will depend on the government’s ability to integrate its macroeconomic plans with its liberal economic system. At its Global Policy Forum in 2012, the bank made a commitment under the Maya Declaration to encourage promoting private sector products that respond to economic regression from the West. Since, the Central Bank has emphasized major opportunities from e-commerce. Meanwhile, the Central Bank must implement a new financial mediator office so that consumers have the information, protection, and ability to access these new services.

Since the 2000s, the services sector has been the driving force of Armenia's high economic growth rate along with new construction. In 2010, the volume of services in Armenia increased over 7.4% from January to September as compared to the same period in 2009. Harmoniously, tourism has increased in Armenia. In 2007, a record-high 500,000 tourist visited from mostly Europe, Russia and the US. Meanwhile, there is a noticeable increase in Iranian tourist visiting Armenia. Accordingly, Armenia is a mecca for travelers seeking to bridge cultural differences between Islam and Christianity perpetuated by western led wars in the Middle East.

Socioeconomic Strata

Today, up to 95% of Armenians follow Christianity. Most Armenians are followers of the Armenian Apostolic Church. The Armenian Apostolic Church was founded in the 1st century AD. In 301 AD, it became the first branch of Christianity to become a state religion. The largest religious minority in Armenia are new Protestant converts and Non-Trinitarian Christians which account for 1.3% of population.