Emerging Markets / July 28, 2017

Eurasian Agribusiness and Economics in Armenia

Armenia is a small landlocked country located in the southern Caucasus region, east of Turkey. Formerly a republic of the Soviet Union, Armenia reclaimed its independence in 1991. Even though the country transitioned towards a market economy and democratic rule, it has struggled to maintain good relationships with its neighbors. Currently, Armenia has a total territory of almost 30.000 square kilometers, which is somewhat smaller than Maryland. The country’s landscape is mostly mountainous alongside several main rivers and a central lake. Armenia has a total population of little over 3 million citizens, 63% of which live in an urban setting, notably the capital city of Yerevan with more than 1 million inhabitants. The national annual gross domestic product (GDP) is approximately US$25 billion (PPP) and the country has experienced positive economic growth upwards of 2.0% in recent years. The Armenian economy is divided into 20% agriculture, 29% manufacturing, and 51% services. Similarly, it is estimated that the agricultural industry employs 36% of the national labor force, while manufacturing employs 17% and services employ another 47%. Meanwhile, the agriculture industry utilizes 60% of the national territory, while another 9% is forested.

In terms of natural resources, Armenia has some deposits of gold, copper, molybdenum, zinc, and bauxite. Within manufacturing, the national industry is focused on brandy making, mining, diamond processing, machinery, electric motors, knitted wear, hosiery, shoes, silk fabric, chemicals, trucks, electronics, jewelry, software, and food processing. Simultaneously, the country’s agricultural industry has as main products vegetables, livestock, and fruits, such as grapes and apricots. In terms of trade, during 2015, Armenia imported US$3.3 billion worth of goods and exported US$1.7 billion, resulting in a trade deficit of US$1.6 billion. Furthermore, that same year, Armenia’s main export, representing 20% or US$326 million of the country’s total, consisted of copper ore. On the other hand, the country’s main import, representing 12% or US$386 million of all international purchases, were petroleum gas and natural gas. Likewise, in 2015, Armenia joined the Eurasian economic Union alongside Belarus, Kyrgyzstan, Kazakhstan, and Russia. However, as of today, Armenia’s main trading partners are Russia, China, Germany, Iran, Iraq, Georgia, and Canada.

Eurasian Agribusiness and Economics in Armenia

Unfortunately, in Armenia, about 200.000 people suffer from undernourishment. In recent years, the average per capita protein intake of animal origin amongst the Armenian population has been of 39 grams daily. Meanwhile, cereals, roots, and tubers supply 43% of the average food energy intake in the country. Land distribution and output in Armenia have also evolved throughout the last two decades. Back in 1992, permanent pastures and meadows in the country covered 687.000 hectares, while arable land covered 423.000 hectares and permanent crops accounted for 60.000 hectares. More recently, by 2014, permanent pastures and meadows had increased to almost 1.2 million hectares, while arable land represented close to 450.000 hectares and permanent crops covered approximately 58.000 hectares. In 1992, the cereals market in Armenia utilized almost 163.000 hectares of land and yielded some 300.000 metric tons annually. Finally, in 2014, the country devoted approximately 186.000 hectares of land to cereals production and yielded little over 585.000 metric tons.

(Read more about Agribusiness in Belarus, Russia & Eurasia)