The dissolution of the Soviet Union in December 1991 brought an end to the Cold War and created the opportunity to build bilateral relations with the New Independent States (NIS) as they began a political and economic transformation. The U.S. recognized the independence of Armenia on December 25, 1991, and opened an Embassy in Yerevan in February 1992.

The United States has made a concerted effort to help Armenia and the other NIS during their difficult transition from totalitarianism and a command economy to democracy and open markets. The cornerstone of this continuing partnership has been the Freedom for Russia and Emerging Eurasian Democracies and Open Markets (FREEDOM) Support Act, enacted in October 1992. Under this and other programs, the U.S. to date has provided nearly $1.5 billion in humanitarian and technical assistance for Armenia. U.S. assistance programs in Armenia are described in depth on Embassy Yerevan's website at: www.usa.am/assistance/.

In addition, the U.S. has played a leading role in the Minsk Group, which was created in 1992 by the Conference on Security and Cooperation in Europe--now the Organization for Security and Cooperation in Europe (OSCE)--to encourage a peaceful, negotiated resolution to the conflict over the Nagorno-Karabakh region. That conflict has cost several thousand lives, created nearly one million refugees and displaced persons, and caused economic hardships for Armenia.

U.S.-Armenian Economic Relations
In 1992 Armenia signed three agreements with the U.S. affecting trade between the two countries. The agreements were ratified by the Armenian parliament in September 1995 and entered into force in the beginning of 1996. They include an "Agreement on Trade Relations," an "Investment Incentive Agreement," and a treaty on the "Reciprocal Encouragement and Protection of Investment" (generally referred to as the Bilateral Investment Treaty, or BIT). Armenia does not have a bilateral taxation treaty with the U.S. The 1994 Law on Foreign Investment governs all direct investments in Armenia, including those from the U.S.

Approximately 70 U.S.-owned firms currently do business in Armenia, including such multinationals as Procter & Gamble, M&M-Mars, Xerox, Dell, and IBM. Recent major U.S. investment projects include the Hotel Armenia; the Hotel Ani; Tufenkian Holdings (carpet and furnishing production, hotels, and construction); several subsidiaries of U.S.-based information technology firms, including Viasphere Technopark, an IT incubator; a Greek-owned Coca-Cola bottling plant; petroleum exploration by the American-Armenian Exploration Company; jewelry and textile production facilities; a large perlite mining and processing plant; and the joint venture Jermuk, which produces one of the more popular brands of mineral water in Armenia.

U.S. Support To Build A Market Economy
The U.S. continues to work closely with international financial institutions like the International Monetary Fund and the World Bank to help Armenia in its transition to a free-market economy. Armenia has embarked upon an ambitious reform program, which has allowed a gradual transition from humanitarian aid toward more developmental assistance. U.S. economic assistance programs, primarily under the administration of the U.S. Agency for International Development (USAID), have three objectives: to help create a legal, regulatory, and policy framework for competition and economic growth in energy, agriculture, housing, and other sectors; to promote fiscal reform; and to develop a competitive and efficient private financial sector. Other agencies, including the Departments of State, Agriculture, Treasury, Defense, Commerce, and the Peace Corps sponsor various assistance projects. The U.S.-Armenia Task Force, established in 2000, is a bilateral commission that meets every 6 months to review the progress and objectives of U.S. assistance to Armenia.

Specific USAID programs focus on the development of a private sector and small and medium-size enterprises, including microcredit programs; energy sector reform, including preparation for privatization of energy distribution companies; democracy and good governance programs, including the promotion of a well-informed and active civil society; social sector reform, including funding for medical partnerships and social insurance programs; and earthquake zone assistance, which provides housing and economic reactivation for victims of the 1988 earthquake.

The U.S. Department of Agriculture Marketing Assistance Project (MAP) provides advisory services and support to private farmers in all Armenian provinces, facilitates the formation of farmer associations and marketing initiatives, provides micro-credits for agricultural producers, and has laid the groundwork for several agribusiness associations. The U.S. Department of Agriculture's (USDA) Cochran Fellowship Program provides training to Armenian agriculturists. USDA and USAID also have launched efforts to revive production and export of Armenian vegetables, fruits, and other agricultural products.

U.S. Humanitarian Assistance
Over the past decade the U.S. has provided over $1.4 billion in assistance to Armenia, the highest per capita amount in the NIS. Humanitarian aid originally accounted for up to 85% of this total, reflecting the economic effects caused by closed borders with Turkey and Azerbaijan related to the Nagorno-Karabakh conflict, destruction in northern Armenia left from the devastating 1988 earthquake, and the virtual paralysis of most of the country's factories.

As conditions in Armenia have improved, with the stabilization of the economy and increased energy production--including the restarting of the Armenian Nuclear Power Plant at Metsamor--U.S. assistance programs have moved away from humanitarian goals to longer-term development ones.

U.S. Support To Achieve Democracy
Technical assistance and training programs have been provided in municipal administration, intergovernmental relations, public affairs, foreign policy, diplomatic training, rule of law, and development of a constitution. Specific programs are targeted at promoting free and fair elections, strengthening political parties, and promoting the establishment of an independent judiciary and independent media. This includes financing for programs that support civil society organizations, local non-governmental organizations (NGO) capacity building, National Assembly professional development, and local and community-level governance.

State Department and USAID educational exchange programs play an important role in supporting democratic and free-market reforms. Assistance in the translation and publication of printed information also has been provided. Exchange programs in the U.S. for Armenian lawyers, judges, political party members, business people, government officials, NGO activists, journalists, and other public figures focus on a range of topics, including the American judicial and political system, privatization, specific business sectors, the media, and civil society. The State Department has funded an ongoing project to provide Internet connectivity to schools at various levels throughout the country; these centers provide both educational and community-building opportunities.

USAID has funded international and domestic groups to monitor national elections. USAID also has funded programs to educate voters and to strengthen the role of an array of civic organizations in the democratic process.

The U.S. Embassy in Yerevan, Armenia is at 18 Marshal Bagramyan; tel: 3741-54-3900 or 3741-52-4661; fax: 3741-52-0800.