Economic issues. The Armenian economy is beginning to recover from the collapse it suffered in 1992-93. The GDP is growing in the 4-6 per cent range. There is some foreign investment (approximately 150-200 million dollars in 1998), but the country survives, on the whole, on economic assistance from the West (Worldbank, IMF, EBRD, etc. loans and humanitarian grants): As of 1 January 1999, the total foreign debt was 720 million dollars. Armenia`s major trading partners are Russia, the USA, Belgium, Iran, and Great Britain (75 million dollars). With all of these partners Armenia has a negative trade balance. There is also a lot of money coming into the country (200-300 million dollars per year) from expatriates who work abroad (mostly in Russia and send money home. As to industry, most of the Soviet industrial complex is either idle or already dismantled and sold as scrap metal. A few factories do operate, producing electrical goods, machinery, etc. Foreign investment tends to go to the service sector as opposed to production. There is a fairly stable banking sector. Inflation and the currency rate are kept stable as well due to the monetary policies of the government. Official unemployment is around 10 per cent, but in reality it is close to 50-60 per cent, if not more. At this point, the economy is largely privatised. Seventy five per cent of the GDP is in private hands, with trade and agriculture leading the way at the rate of 97 per cent privatisation. Industry is 85 per cent privatised, but transport and other element of infrastructure remain in the hands of the state.

Analysis and Future Prospects