Transition in Armenia​

Transition in Armenia was largely shaped by the Karabakh movement and the following war, the Spitak Earthquake, long-term blockade and significant socio-economic downfall. To understand the peculiarities of the transition in Armenia and its impact on vulnerable and marginalized groups, one should closely look at political, social and economic developments that transpired.

Armenia’s road towards independence was paved by the “Karabakh movement”. Launched in 1988 during Gorbachov’s Perestroika, it was a broad-based civic movement in Armenia and consisted of the mostly Armenian-populated Nagorno-Karabakh Autonomous Oblast advocating for the transfer of Karabakh from the neighboring Azerbaijani SSR to the Armenian SSR. Many ideas of the Karabakh movement, including such taboo topics in the USSR like the demand for independence, Armenia’s breaking out from the USSR, unification of Karabakh and Nakhijevan (Armenian-populated regions handed over to Azerbaijani SSR during the very first years of the USSR) with Armenia, were rooted in the dissident movements of Soviet Armenia. Growing into a popular democratic undertaking, the “All Armenian National Movement” (ANM), the movement’s leadership, the “Karabakh Committee”, eventually became a political party that won the majority vote in 1990 parliament (The Supreme Council) elections and declared Armenia’s independence from the USSR on August 23, 1990. These events were followed by a referendum for independence on September 21, 1991, and the consequent election of its leader, Levon Ter-Petrosyan, as the first president of Armenia.

By the end of the USSR, Armenia was a highly industrialized and urbanized country, with over 70% of its population of 3 287 677 (1989 census data) living in cities. Armenia also had one of the most advanced science and technology sectors supporting its industry. While the scientific contribution mostly served the Soviet military-industrial complexes, its developments also resulted in the establishment of a rich tradition in research, particularly in natural sciences such as physics, biology or chemistry, and ensured strong government support to promote education in science and engineering in Armenia. During the Soviet period, Armenia had one of the highest percentages of higher education attendees per capita in comparison to other USSR republics, and science was a particularly popular field of study. The Armenian Academy of Sciences was a major center of science and technology research, providing support services to local industrial complexes, as well as the entire Soviet Union. Just before the fall of the regime, there were about 36 research institutions both within and outside the Academy of Sciences.

However, Armenia’s economy was closely tied with the USSR, with 95% of its external cooperation being with the USSR, the highest among the union republics. Therefore, the industry, as well as the industry-linked science and technology sectors, could not survive without functional ties with other Soviet Republics. Even before independence, Armenian industry had sharply declined and the country experienced a major blow to the economy. First, the Spitak Earthquake of December 7, 1988 not only resulted in a death toll of 25,000, 530,000 people left homeless and thousands disabled, but it also destroyed a third of the country’s industrial capacity. Then political tension, war and blockade resulted in the shutting down of most industries, which led to rising unemployment and economic paralysis. Armenia’s GDP contracted by about half in 1992, resulting in a significant fall in GDP per capita, and, by 1996, 55% of the population were living below the poverty line, and more than a quarter of the population had an income so low that they were unable to satisfy the minimum need for food (extreme poverty). Armenia also had one of the highest unemployment rates in the former USSR during the transition. A comprehensive study on Armenia by UNDP estimates that about 50% of all working age adults (25-49 years of age) were out of formal employment by 1998. Unemployment in Armenia is mainly concentrated in urban areas and was a more or less direct result of the collapse of state-owned industries following the breakdown of Soviet-era trade relations, as well as the imposition of shock therapy measures.

Right after independence, the ANM embarked on speedy political, legal and economic reforms, aimed at transitioning from a one-party political system and centrally-planned economy to a liberal democracy and market economy. First, on August 22, 1992, the Law on Privatization and Denationalization of State Enterprises and Unfinished Construction Objects was adopted and from 1994 to 1999 around 1000 enterprises were privatized, and around 500,000 families became apartment owners of previously state-owned apartments. The second major reform was the redistributive land reform, where most of the agricultural sector in Armenia shifted to individual production in 1992 and the large collective and state farms ceased to exist. Some of the required institutional framework for Armenia’s land reform was already in place in early 1991, before the Soviet Union fell apart. Soon after independence, the land reform started, and 70 percent of arable land came into the hands of individual peasant farms. At the end of 1995 almost all agricultural produce (95-98%) came from the private sector. The re-distributive land reform in Armenia created a large number of peasant farms with an average size of 1.3–1.4 hectares (and less than 0.5 ha per rural capita), divided into several parcels. By the mid-1990s, one third of agricultural land was privatized. According to the official ‘Land Balance’ of 1997 around 330,000 individual peasant farms had been formed. While at the beginning the land reform helped to keep the rural poverty relatively low (as of 1996, 58.8% of population in the cities lived under the poverty line compared to 48% in rural areas) , eventually many small land owners and farmers who did not have the capital and/or the farming knowledge sold out their lands or had moved into off-farm employment or migrated. This resulted in land consolidation/concentration into the hands of large-scale farmers and/or oligarchs. who also largely benefitted from the privatization of factories and other spheres of industry.

A major blow to the Armenian economy were the energy crises resulting mostly from the economic blockade imposed by Azerbaijan and Turkey. The bulk of energy supply in Armenia came from the Metsamor nuclear power plant, which provided roughly one-third of Armenia’s generating capacity. After the Chernobyl disaster there were growing concerns regarding its safety, which grew into panic raised by protests organized by the Green Party of Armenia after the devastating Spitak earthquake (the epicenter of the earthquake was only 100 kilometers away from Metsamor). As a result, the Metsamor power plant was shut down in 1989. After the country’s independence and as soon as the war started, Turkey and Azerbaijan closed their borders with Armenia and put a fuel embargo on the country. At the same time, Azerbaijan blocked the natural gas pipeline from Turkmenistan that passed through its territory, thus cutting off about 90% of the natural gas supply to Armenia, while the supply from a new gas pipeline, built in 1993 through neighboring Georgia, was regularly interrupted by acts of sabotage. The gas pipeline through Georgia was blown up 42 times, and the railroad running through the territory of Georgia was wrecked 21 times. Armenia was left to rely almost entirely on its hydropower resources, at great expense to Lake Sevan, one of the country’s most precious natural resources. Between 1992 and 1996, customers suffered through several of Armenia’s brutal winters with little more than two hours of electricity per day. The energy crisis ended only when Unit 2 of the Metsamor Nuclear power plant Unit 2 was restored in October 1995, making it the only reactor in the world that was restarted after closing.

As a result of the war, blockade, energy crises and the collapse of the Soviet economic network, by 1993, GDP in Armenia had declined to only 47 percent of its level in 1990, and with the exception of neighboring Georgia, where, as the result of civil war GDP had fallen in 1994-95 by an even greater percentage, the output collapse in Armenia was the worst in the entire region. The whole country was short of bread and people had to wait in long queues sometimes for days. Many basic commodities, such as sugar and eggs were also in shortage, and prices for goods were 25-30% higher.

On top of economic collapse and political changes, the transition in Armenia was markedby war and conflict. The Karabakh conflict resulted in war (1991-1994) and human losses (over 5,000 dead and 20,000 wounded), as well as an influx of over 360,000 ethnically Armenian refugees from Azerbaijan and an exodus of over 160,000 ethnic Azerbaijanis to Azerbaijan. Not only had many refugeesbarely escaped pogroms and had not been able to bring any of their belongings, but they were mostly from big industrial cities of Azerbaijan, such as Baku and Kirovabad (currently Ganja). By comparison, the ethnically Azerbaijani population of Armenia were predominantly rural inhabitants. The Government decided to settle the newcomers in the previously Azerbaijani villages of Armenia. This created additional problems as the Armenian refugees from Azerbaijan were in most cases industrial workers, engineers, teachers, service workers etc., and did not know how to cultivate land or handle livestock. Moreover, many were Russian speaking and Russian educated and could not read or write in Armenian, and as according to the Language Law adopted on March 30, 1993, the official language of the newly independent Armenia was Armenian, it proved difficult to find a job or to help a child with schoolwork if one did not know Armenian. These issues, coupled with the overall harsh socio-economic situation in the country, created additional vulnerabilities for the refugees. As a result, a lot of refugees have eventually left the country and many who stayed are still living in hard conditions.


  • Start of Karabakh Movement 20.02.1988
  • Spitak Earthquake 07.12.1988
  • Shutdown of Metsamor Nuclear Power Plant 02-03.1989
  • Last Soviet Elections in Armenia where the representatives of the All-Armenian National Movement were elected to the Supreme Council 20.05.1990
  • Declaration of Independence 23.08.1990
  • Referendum for Armenia’s Independence 21.09.1990
  • First Karabakh War 1991-1994
  • Economic blockade emposed by Azerbaijan and Turkey 1992-1995
  • Signing of Karabakh Ceasefire 12.05.1994
  • Resignation of Levon Ter-Petrosyan, first president of Armenia 03.02.1998
  • Armenian parliament shooting, a terrorist attack on the National Assembly that among others killed the then Prime-Minster Vazgen Sargsyan and Parliament Speaker Karen Demirchyan 27.10.1999