Balkans and Italy.

The South Caucasus is situated at thecrossroad of the Russia, Turkey, Iran, Europe, and Central Asia. The gas and oilreserves in the Central Asia and Caspian Sea and the pipelines to Europethrough the South Caucasus make clear the geopolitical importance of theregion. The rotation from the Soviet system to diverse democratic societies andfunctioning market economies have been going through with political and socialdisruption, governance deficits, wars, occupation, and conflicts in differentregions. For the last two decades the three South Caucasus countries has practicedsocial troubles, some armed conflicts, and territorial disputes, namely withregard to Nagorno-Karabakh, Abkhazia and South Ossetia/Tskinvali Region and waragainst Russian Federation. Today there are still around 1.2 million internallydisplaced persons (IDPs) and refugees in the three countries. Despiteinternational mediation, the conflicts are still frozen. Armenia standscompletely isolated mainly because its borders are closed with Turkey andAzerbaijan.

The country has friendly relations with Iran and after joining tothe Eurasian Economic Union, continues to depend economically and politicallyon the Russian Federation. Due to regulatory reforms, an improved businessenvironment and higher exports of commodities, Armenia’s economy is slowlyrecovering. According to World Bank GDP (2015) is 10.561 $billion. However,poverty and unemployment remain high, particularly in rural areas and havefurther increased over the last few years. Remittances from working migrantsand the Armenian diaspora play an important role for family income support andinvestments in the country.

Subsistence agriculture remains the majoremployment sector, accounting for 45% of the working population. Marketliberalization has placed large constraints on the once heavily subsidizedagricultural sector and colluding interests pose threats to fair competition. 

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