A/HRC/41/41/Add.4 II. Economic, political and social background and legal context A. Background 8. Armenia is a landlocked country in the Caucasus region neighbouring Georgia, to the north and the Islamic Republic of Iran to the south. The borders are closed to the east with Azerbaijan and to the west with Turkey. 9. Following it gaining its independence in 1991 from the former Soviet Union, Armenia had to face numerous issues requiring prompt solutions, such as economic recovery, political stability and swift large-scale emigration from the country. 10. Those factors pushed the authorities to begin significant economic reforms, ranging from land privatization to an expansion of the private sector, which now accounts for more than 80 per cent of gross domestic product (GDP), rating Armenia as having one of the most open economies in the region. 1 11. In 2000, economic growth slowed, partly due to the weaker performance of the country’s main trading partners and because of the slowdown in countries that are sources of remittances.2 12. In addition, during the last decade the Armenian economy and society underwent two economic shocks: the global financial crisis in 2008–2009, and the financial crisis of 2014–2015 in Russia, a major trade and economic partner. The decline in GDP in 2009 was especially severe (14.1 per cent) and was one of the deepest declines in the region. 3 13. The incipient recovery of global commodity prices since 2010 has lifted the extractive industries sector and raised private consumption, which could facilitate the renewed growth of other sectors. Prudent monetary and economic policies have allowed the country to recover in a relatively short period. 14. During the first half of 2017, the Armenian economy showed renewed strength, as real GDP grew by 6 per cent more than in the same period in 2016, driven by industry, services and the retail trade. Growth and poverty reduction prospects over the medium term are positive but are subject to significant uncertainties.4 15. Although poverty reduction has been notable over the past few decades, a large proportion of the population remains vulnerable. Persistent geographic disparities require deep understanding of the root causes of poverty and possible solutions, particularly bearing in mind that the economy is still heavily reliant on mineral resources and the agriculture sector.5 16. In Armenia, there is little or no record of ethnic divisions or discrimination facing non-Armenian minorities such as Yazidi, Russians, Assyrians, Kurds and Jews. However, it should be noted that ethnic minorities have limited representation in the Government. More recently, and following recent constitutional reforms, four representatives of the main ethnic minorities have been elected to the National Assembly under special legal quotas. 17. A semi-presidential system was formally established in 2005, based on an amendment made to the 1995 Constitution, which included the formal strengthening of the rule of law, human rights and institutional oversight. 18. In 2015, a new constitutional referendum was held, marking the country’s transition from a semi-presidential to a parliamentary republic with legislative powers vested in a unicameral parliament. 1 2 3 4 5 See Bertelsmann Stiftung, “BTI 2018 country report: Armenia”. See United Nations Development Programme, “Rapid integrated policy assessment in Armenia” (2017). See “SDG implementation voluntary national review (VNR) Armenia” (2018). See World Bank, Armenia country economic update “A window of opportunity to tackle challenging reforms” (Fall/Winter 2017–2018). Ibid. 3