The three republics of Transcaucasia - Armenia, Azerbaijan, and
Georgia - were included in the Soviet Union in the early 1920s after
their inhabitants had passed through long and varied periods as
separate nations and as parts of neighboring empires, most recently
the Russian Empire. By the time the Soviet Union dissolved at the end
of 1991, the three republics had regained their independence, but
their economic weakness and the turmoil surrounding them jeopardized
that independence almost immediately. By 1994 Russia had regained
substantial influence in the region by arbitrating disputes and by
judiciously inserting peacekeeping troops. Geographically isolated,
the three nations gained some Western economic support in the early
1990s, but in 1994 the leaders of all three asserted that national
survival depended chiefly on diverting resources from military
applications to restructuring economic and social institutions.
Location at the meeting point of southeastern Europe with the western
border of Asia greatly influenced the histories of the three national
groups forming the present-day Transcaucasian republics. Especially
between the twelfth and the twentieth centuries, their peoples were
subject to invasion and control by the Ottoman, Persian, and Russian
empires. But, with the formation of the twentieth-century states named
for them, the Armenian, Azerbaijani, and Georgian peoples as a whole
underwent different degrees of displacement and played quite different
roles. For example, the Republic of Azerbaijan that emerged from the
Soviet Union in 1991 contains only 5.8 million of the world's
estimated 19 million Azerbaijanis, with most of the balance living in
Iran across a southern border fixed when Persia and Russia in the
nineteenth century. At the same time, slightly more than half the
world's 6.3 million Armenians are widely scattered outside the borders
of the Republic of Armenia as a result of a centuries-long diaspora
and step-by-step reduction of their national territory. In contrast,
the great majority of the world's Georgian population lives in the
Republic of Georgia (together with ethnic minorities constituting
about 30 percent of the republic's population), after having
experienced centuries of foreign domination but little forcible
alteration of national boundaries.
The starting points and the outside influences that formed the three
cultures also were quite different. In pre-Christian times, Georgia's
location along the Black Sea opened it to cultural influence from
Greece. During the same period, Armenia was settled by tribes from
southeastern Europe, and Azerbaijan was settled by Asiatic Medes,
Persians, and Scythians. In Azerbaijan, Persian cultural influence
dominated in the formative period of the first millennium B.C. In the
early fourth century, kings of Armenia and Georgia accepted
Christianity after extensive contact with the proselytizing early
Christians at the eastern end of the Mediterranean. Following their
conversion, Georgians remained tied by religion to the Roman Empire
and later the Byzantine Empire centered at Constantinople. Although
Armenian Christianity broke with Byzantine Orthodoxy very early,
Byzantine occupation of Armenian territory enhanced the influence of
Greek culture on Armenians in the Middle Ages.
In Azerbaijan, the Zoroastrian religion, a legacy of the early Persian
influence there, was supplanted in the seventh century by the Muslim
faith introduced by conquering Arabs. Conquest and occupation by the
Turks added centuries of Turkic influence, which remains a primary
element of secular Azerbaijani culture, notably in language and the
arts. In the twentieth century, Islam remains the prevalent religion
of Azerbaijan, with about three-quarters of the population adhering to
the Shia branch.
Golden ages of peace and independence enabled the three civilizations
to individualize their forms of art and literature before 1300, and
all have retained unique characteristics that arose during those eras.
The Armenian, Azerbaijani, and Georgian languages also grew in
different directions: Armenian developed from a combination of
Indo-European and non-Indo-European language stock, with an alphabet
based on the Greek; Azerbaijani, akin to Turkish and originating in
Central Asia, now uses the Roman alphabet after periods of official
usage of the Arabic and Cyrillic alphabets; and Georgian, unrelated to
any major world language, use a Greek-based alphabet quite different
from the Armenian.
Beginning in the eighteenth century, the Russian Empire constantly
probed the Caucasus region for possible expansion toward the Black Sea
and the Caspian Sea. These efforts engaged Russia in a series of wars
with the Persian and Ottoman empires, both of which by that time were
decaying from within. By 1828 Russia had annexed or had been awarded
by treaty all of present- day Azerbaijan and Georgia and most of
present-day Armenia. (At that time, much of the Armenian population
remained across the border in the Ottoman Empire.)
Except for about two years of unstable independence following World
War I, the Transcaucasus countries remained under Russian, and later
Soviet, control until 1991. As part of the Soviet Union from 1922 to
1991, they underwent approximately the same degree of economic and
political regimentation as the other constituent republics of the
union (until 1936 the Transcaucasian Soviet Federated Socialist
Republic included all three countries). The Sovietization process
included intensive industrialization, collectivization of agriculture,
and large-scale shifts of the rural work force to industrial centers,
as well as expanded and standardized systems for education, health
care, and social welfare. Although industries came under uniform state
direction, private farms in the three republics, especially in
Georgia, remained important agriculturally because of the inefficiency
of collective farms.
The achievement of independence in 1991 left the three republics with
inefficient and often crumbling remains of the Soviet-era state
systems. In the years that followed, political, military, and
financial chaos prevented reforms from being implemented in most
areas. Land redistribution proceeded rapidly in Armenia and Georgia,
although agricultural inputs often remained under state control. In
contrast, in 1994 Azerbaijan still depended mainly on collective
farms. Education and health institutions remained substantially the
same centralized suppliers as they had in the Soviet era, but
availability of educational and medical materials and personnel
dropped sharply after 1991. The military conflict in Azerbaijan's
Nagorno- Karabakh Autonomous Region put enormous stress on the health
and social welfare systems of combatants Armenia and Azerbaijan, and
Azerbaijan's blockade of Armenia, which began in 1989, caused acute
shortages of all types of materials.
The relationship of Russia to the former Soviet republics in the
Transcaucasus caused increasing international concern in the
transition years. The presence of Russian peacekeeping troops between
Georgian and Abkhazian separatist forces remained an irritation to
Georgian nationalists and an indication that Russia intended to
intervene in that part of the world when opportunities arose. Russian
nationalists saw such intervention as an opportunity to recapture
nearby parts of the old Russian, and later Soviet empire. In the fall
of 1994, in spite of strong nationalist resistance in each of the
Transcaucasus countries, Russia was poised to improve its economic and
military influence in Armenia and Azerbaijan, as it had in Georgia, if
its mediation activities in Nagorno-Karabakh bore fruit.
The countries of Transcaucasia each inherited large state- owned
enterprises specializing in products assigned by the Soviet system:
military electronics and chemicals in Armenia, petroleum- based and
textile industries in Azerbaijan, and chemicals, machine tools, and
metallurgy in Georgia. As in most of the nations in the former Soviet
sphere, redistribution and revitalization of such enterprises proved a
formidable obstacle to economic growth and foreign investment in
Armenia, Azerbaijan, and Georgia. Efforts at enterprise privatization
were hindered by the stresses of prolonged military engagements, the
staying power of underground economies that had defied control under
communist and governments, the lack of commercial expertise, and the
lack of a legal infrastructure on which to base new business
relationships. As a result, in 1994 the governments were left with
oversized, inefficient, and often bankrupt heavy industries whose
operation was vital to provide jobs and to revive the national
economies. At the same time, small private enterprises were growing
rapidly, especially in Armenia and Georgia.
In the early 1990s, the Caucasus took its place among the regions of
the world having violent post-Cold War ethnic conflict. Several wars
broke out in the region once Soviet authority ceased holding the lid
on disagreements that had been fermenting for decades. (Joseph V.
Stalin's forcible relocation of ethnic groups after the redrawing of
the region's political map was a chief source of the friction of the
1990s.) Thus, the three republics devoted critical resources to
military campaigns in a period when the need for internal
restructuring was paramount.
In Georgia, minority separatist movements--primarily on the part of
the Ossetians and the Abkhaz, both given intermittent encouragement by
the Soviet regime over the years--demanded fuller recognition in the
new order of the early 1990s. Asserting its newly gained national
prerogatives, Georgia responded with military attempts to restrain
separatism forcibly. A year-long battle in South Ossetia, initiated by
Zviad Gamsakhurdia, post- Soviet Georgia's ultranationalist first
president, reached an uneasy peace in mid-1992. Early in 1992,
however, the violent eviction of Gamsakhurdia from the presidency
added another opponent of Georgian unity as the exiled Gamsakhurdia
gathered his forces across the border.
In mid-1992 Georgian paramilitary troops entered the Abkhazian
Autonomous Republic of Georgia, beginning a new conflict that in 1993
threatened to break apart the country. When Georgian troops were
driven from Abkhazia in September 1993, Georgia's President Eduard
Shevardnadze was able to gain Russian military aid to prevent the
collapse of the country. In mid-1994 an uneasy cease-fire was in
force; Abkhazian forces controlled their entire region, but no
negotiated settlement had been reached. Life in Georgia had
stabilized, but no permanent answers had been found to ethnic claims
and counterclaims.
For Armenia and Azerbaijan, the center of nationalist self- expression
in this period was the Nagorno-Karabakh Autonomous Region of
Azerbaijan. After the Armenian majority there declared unification
with Armenia in 1988, ethnic conflict broke out in both republics,
leaving many Armenians and Azerbaijanis dead. For the next six years,
battles raged between Armenian and Azerbaijani regular forces and
between Armenian militias from Nagorno-Karabakh ("mountainous Karabakh"
in Russian), and foreign mercenaries, killing thousands in and around
Karabakh and causing massive refugee movements in both directions.
Armenian military forces, better supplied and better organized,
generally gained ground in the conflict, but the sides were evened as
Armenia itself was devastated by six years of Azerbaijani blockades.
In 1993 and early 1994, international mediation efforts were stymied
by the intransigence of the two sides and by competition between
Russia and the Conference on Security and Cooperation in Europe for
the role of chief peace negotiator.
Armenia, in the twentieth century the smallest of the three republics
in size and population, has undergone the greatest change in the
location of its indigenous population. After occupying eastern
Anatolia (now eastern Turkey) for nearly 2,000 years, the Armenian
population of the Ottoman Empire was extinguished or driven out by
1915 adding to a diaspora that had begun centuries earlier. After
1915, only the eastern population, in and around Erevan, remained in
its original location. In the Soviet era, Armenians preserved their
cultural traditions, both in Armenia and abroad. The Armenian people's
strong sense of unity has been reinforced by periodic threats to their
existence. When Armenia, Azerbaijan, and Georgia gained their
independence in 1991, Armenia possessed the fewest natural and
man-made resources upon which to build a new state. Fertile
agricultural areas are relatively small, transportation is limited by
the country's landlocked position and mountainous terrain (and,
beginning in 1989, by the Azerbaijani blockade), and the material base
for industry is not broad. A high percentage of cropland requires
irrigation, and disorganized land privatization has delayed the
benefits that should result from reducing state agricultural control.
Although harvests were bountiful in 1993, gaps in support systems for
transport and food processing prevented urban populations from
benefiting.
The intensive industrialization of Armenia between the world wars was
accomplished within the controlled barter system of the Soviet
republics, not within a separate economic unit. The specialized
industrial roles assigned Armenia in the Soviet system offered little
of value to the world markets from which the republic had been
protected until 1991. Since 1991 Armenia has sought to reorient its
Soviet-era scientific-research, military electronics, and chemicals
infrastructures to satisfy new demands, and international financial
assistance has been forthcoming. In the meantime, basic items of
Armenian manufacturing, such as textiles, shoes, and carpets, have
remained exportable. However, the extreme paucity of energy
sources--little coal, natural gas, or petroleum is extracted in
Armenia--always has been a severe limitation to industry. And about 30
percent of the existing industrial infrastructure was lost in the
earthquake of 1988. Desperate crises arose throughout society when
Azerbaijan strangled energy imports that had provided over 90 percent
of Armenia's energy. Every winter of the early 1990s brought more
difficult conditions, especially for urban Armenians.
In the early 1990s, the Armenian economy was also stressed by direct
support of Karabakh self-determination Karabakh, which received
massive shipments of food and other materials through the Lachin
corridor that Karabakh Armenian forces had opened across southwestern
Azerbaijan. Although Karabakh sent electricity to Armenia in return,
the balance of trade was over two to one in favor of Karabakh, and
Armenian credits covered most of Karabakh's budget deficits.
Meanwhile, Armenia remained a command rather than a free-market
economy to ensure that the military received adequate economic
support.
In addition to the Karabakh conflict, wage, price, and social welfare
conditions have caused substantial social unrest since independence.
The dram (for value of the dram--see Glossary), the national currency
introduced in 1992, underwent almost immediate devaluation as the
national banking system tried to stabilize international exchange
rates. Accordingly, in 1993 prices rose to an average of 130 percent
of wages, which the government indexed through that year. The scarcity
of many commodities, caused by the blockade, also pushed prices
higher. In the first post-Soviet years, and especially in 1993, plant
closings and the energy crisis caused unemployment to more than
double. At the same time, the standard of living of the average
Armenian deteriorated; by 1993 an estimated 90 percent of the
population were living below the official poverty line.
Armenia's first steps toward democracy were uneven. Upon declaring
independence, Armenia adapted the political system, set forth in its
Soviet-style 1978 constitution, to the short- term requirements of
governance. The chief executive would be the chairman of Armenia's
Supreme Soviet, which was the chief legislative body of the new
republic--but in independent Armenia the legislature and the executive
branch would no longer merely rubber-stamp policy decisions handed
down from Moscow.
The inherited Soviet system was used in the expectation that a new
constitution would prescribe Western-style institutions in the near
future. However, between 1992 and 1994 consensus was not reached
between factions backing a strong executive and those backing a strong
legislature.
At the center of the dispute over the constitution was Levon
Ter-Petrosian, president (through late 1994) of post-Soviet Armenia.
Beginning in 1991, Ter-Petrosian responded to the twin threats of
political chaos and military defeat at the hands of Azerbaijan by
accumulating extraordinary executive powers. His chief opposition, a
faction that was radically nationalist but held few seats in the
fragmented Supreme Soviet, sought to build coalitions to cut the
president's power, then to finalize such a move in a constitution
calling for a strong legislature. As they had on other legislation,
however, the chaotic deliberations of parliament yielded no decision.
Ter-Petrosian was able to continue his pragmatic approach to domestic
policy, privatizing the economy whenever possible, and to continue his
moderate, sometimes conciliatory, tone on the Karabakh issue.
Beginning in 1991, Armenia's foreign policy also was dictated by the
Karabakh conflict. After independence, Russian troops continued
serving as border guards and in other capacities that Armenia's new
national army could not fill. Armenia, a charter member of the
Russian-sponsored Commonwealth of Independent States ( CIS--see
Glossary), forged security agreements with CIS member states and took
an active part in the organization. After 1991 Russia remained
Armenia's foremost trading partner, supplying the country with fuel.
As the Karabakh conflict evolved, Armenia took a more favorable
position toward Russian leadership of peace negotiations than did
Azerbaijan.
The dissolution of the Soviet Union made possible closer relations
with Armenia's traditional enemy Turkey, whose membership in the North
Atlantic Treaty Organization ( NATO) had put it on the opposite side
in the Cold war. In the Karabakh conflict, Turkey sided with Islamic
Azerbaijan, blocking pipeline deliveries to Armenia through its
territory. Most important, Turkey withheld acknowledgment of the 1915
massacre, without which no Armenian government could permit a
rapprochement. Nevertheless, tentative contacts continued throughout
the early 1990s.
In spite of pressure from nationalist factions, the Ter- Petrosian
government held that Armenia should not unilaterally annex Karabakh
and that the citizens of Karabakh had a right to self-determination
(presumably meaning either independence or union with Armenia).
Although Ter-Petrosian maintained contact with Azerbaijan's President
Heydar Aliyev, and Armenia officially accepted the terms of several
peace proposals, recriminations for the failure of peace talks flew
from both sides in 1993.
The United States and the countries of the European Union (EU) have
aided independent Armenia in several ways, although the West has
criticized Armenian incursions into Azerbaijani territory.
Humanitarian aid, most of it from the United States, played a large
role between 1991 and 1994 in Armenia's survival through the winters
of the blockade. Armenia successively pursued aid from the European
Bank for Reconstruction and Development, the International Monetary
Fund ( IMF), and the World Bank. Two categories of assistance,
humanitarian and technical, were offered through those lenders.
Included was aid for recovery from the 1988 earthquake, whose
destructive effects were still being felt in Armenia's industry and
transportation infrastructure as of late 1994.
After the Soviet Union collapsed, Armenia's national security
continued to depend heavily on the Russian military. The officer corps
of the new national army created in 1992 included many Armenian former
officers of the Soviet army, and Russian institutes trained new
Armenian officers. Two Russian divisions were transferred to Armenian
control, but another division remained under full Russian control on
Armenian soil.
Internal security was problematic in the transitional years. The
Ministry of Internal Affairs, responsible for internal security
agencies, remained outside regular government control, as it had been
in the Soviet period. This arrangement led to corruption, abuses of
power, and public cynicism, a state of affairs that was especially
serious because the main internal security agency acted as the
nation's regular police force. The distraction of the Karabakh crisis
combined with security lapses to stimulate a rapid rise in crime in
the early 1990s. The political situation was also complicated by
charges of abuse of power exchanged by high government officials in
relation to security problems.
By the spring of 1994, Armenians had survived a fourth winter of acute
shortages, and Armenian forces in Karabakh had survived the
large-scale winter offensive that Azerbaijan launched in December
1993. In May 1994, a flurry of diplomatic activity by Russia and the
CIS, stimulated by the new round of fighting, produced a cease-fire
that held, with some violations, through the summer. A lasting treaty
was delayed, however, by persistent disagreement over the nationality
of peacekeeping forces that would occupy Azerbaijan. Azerbaijan
resisted the return of Russian troops to its territory, while the
Russian plan called for at least half the forces to be Russian. On
both diplomatic and economic fronts, new signs of stability caused
guarded optimism in Armenia in the fall of 1994.
The failure of the CSCE peace plan, which Azerbaijan supported, had
caused that country to mount an all-out, human- wave offensive in
December 1993 and January 1994, which initially pushed back Armenian
defensive lines in Karabakh and regained some lost territory. When the
offensive stalled in February, Russia's minister of defense, Pavel
Grachev, negotiated a cease- fire, which enabled Russia to supplant
the CSCE as the primary peace negotiator. Intensive Russian-sponsored
talks continued through the spring, although Azerbaijan mounted air
strikes on Karabakh as late as April. In May 1994, Armenia,
Azerbaijan, and Nagorno-Karabakh signed the CIS-sponsored Bishkek
Protocol, calling for a cease-fire and the beginning of troop
withdrawals. In July the defense ministers of the three jurisdictions
officially extended the cease-fire, signaling that all parties were
moving toward some combination of the Russian and the CSCE peace
plans. In September the exchange of Armenian and Azerbaijani prisoners
of war began.
Under these conditions, Russia was able to intensify its three-way
diplomatic gambit in the Transcaucasus, steadily erasing Armenians'
memory of airborne Soviet forces landing unannounced as a show of
strength in 1991. In the first half of 1994, Armenia moved closer to
Russia on several fronts. A February treaty established bilateral
barter of vital resources. In March Russia agreed to joint operation
of the Armenian Atomic Power Station at Metsamor, whose scheduled 1995
reopening is a vital element in easing the country's energy crisis.
Also in March, Armenia replaced its mission in Moscow with a full
embassy. In June the Armenian parliament approved the addition of
airborne troops to the Russian garrison at Gyumri near the Turkish
border. Then in July, Russia extended 100 billion rubles (about US$35
million at that time) for reactivation of the Metsamor station, and
Armenia signed a US$250 million contract with Russia for Armenia to
process precious metals and gems supplied by Russia. In addition,
Armenia consistently favored the Russian peace plan for
Nagorno-Karabakh, in opposition to Azerbaijan's insistence on reviving
the CSCE plan that prescribed international monitors rather than
combat troops (most of whom would be Russian) on Azerbaijani soil.
Armenia was active on other diplomatic fronts as well in 1994.
President Ter-Petrosian made official visits to Britain's Prime
Minister John Major in February (preceding Azerbaijan's Heydar Aliyev
by a few weeks when the outcome of the last large- scale campaign in
the Karabakh conflict remained in doubt) and to President William J.
Clinton in the United States in August. Clinton promised more active
United States support for peace negotiations, and an exchange of
military attache was set. While in Washington, Ter-Petrosian
expressed interest in joining the NATO Partnership for Peace, in which
Azerbaijan had gained membership three months earlier.
Relations with Turkey remained cool, however. In 1994 Turkey continued
its blockade of Armenia in support of Azerbaijan and accused Armenia
of fostering rebel activity by Kurdish groups in eastern Turkey; it
reiterated its denial of responsibility for the 1915 massacre of
Armenians in the Ottoman Empire. In June these policies prompted
Armenia to approve the security agreement with Russia that stationed
Russian airborne troops in Armenia near the Turkish border. In July
Armenia firmly refused Turkey's offer to send peacekeeping forces to
Nagorno-Karabakh. Thus, Armenia became an important player in the
continuing contest between Russia and Turkey for influence in the
Black Sea and Caucasus regions. Armenians considered the official
commemoration by Israel and Russia of the 1915 Armenian massacre a
significant advancement in the country's international position.
Early in 1994, Armenia's relations with Georgia worsened after
Azerbaijani terrorists in Georgia again sabotaged the natural gas
pipeline supplying Armenia through Georgia. Delayed rail delivery to
Armenia of goods arriving in Georgian ports also caused friction.
Underlying these stresses were Georgia's unreliable transport system
and its failure to prevent violent acts on Georgian territory.
Pipeline and railroad sabotage incidents continued through mid-1994.
The domestic political front remained heated in 1994. As the
parliamentary elections of 1995 approached, Ter-Petrosian's centrist
Armenian Pannational Movement (APM), which dominated political life
after 1991, had lost ground to the right and the left because
Armenians were losing patience with economic hardship. Opposition
newspapers and citizens' groups, which Ter- Petrosian refused to
outlaw, continued their accusations of official corruption and their
calls for the resignation of the Ter-Petrosian government early in the
year. Then, in mid-1994 the opposition accelerated its activity by
mounting antigovernment street demonstrations of up to 50,000
protesters.
In the protracted struggle over a new constitution, the opposition
intensified rhetoric supporting a document built around a strong
legislature rather than the strong-executive version supported by
Ter-Petrosian. By the fall of 1994, little progress had been made even
on the method of deciding this critical issue. While opposition
parties called for a constitutional assembly, the president offered to
hold a national referendum, following which he would resign if
defeated.
Economic conditions were also a primary issue for the opposition. The
value of the dram, pegged at 14.5 to the United States dollar when it
was established in November 1993, had plummeted to 390 to the dollar
by May 1994. In September a major overhaul of Armenia's financial
system was under way, aimed at establishing official interest rates
and a national credit system, controlling inflation, opening a
securities market, regulating currency exchange, and licensing lending
institutions. In the overall plan, the Central Bank of Armenia and the
Erevan Stock Exchange assumed central roles in redirecting the flow of
resources toward production of consumer goods. And government
budgeting began diverting funds from military to civilian production
support, a step advertised as the beginning of the transition from a
command to a market economy. This process included the resumption of
privatization of state enterprises, which had ceased in mid-1992,
including full privatization of small businesses and cautious partial
privatization of larger ones. In mid-1994 the value of the dram
stabilized, and industrial production increased somewhat. As another
winter approached, however, the amount of goods and food available to
the average consumer remained at or below subsistence level, and
social unrest threatened to increase.
In September Armenia negotiated terms for the resumption of natural
gas deliveries from its chief supplier, Turkmenistan, which had
threatened a complete cutoff because of outstanding debts. Under the
current agreement, all purchases of Turkmen gas were destined for
electric power generation in Armenia. Also in September, the IMF
offered favorable interest rates on a loan of US$800 million if
Armenia raised consumer taxes and removed controls on bread prices.
Armenian officials resisted those conditions because they would
further erode living conditions.
Thus in mid-1994 Armenia, blessed with strong leadership and support
from abroad but cursed with a poor geopolitical position and few
natural resources, was desperate for peace after the Karabakh
Armenians had virtually won their war for self- determination. With
many elements of post-Soviet economic reform in place, a steady flow
of assistance from the West, and an end to the Karabakh conflict in
sight, Armenia looked forward to a new era of development.
Reproduced with permission from the United States Library of Congress. (03/94)
ARMENIA FACTBOOK