The dissolution of the Soviet Union in December 1991 brought an end to the Cold War and created the opportunity for 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.
Military cooperation with the United States of America began in 2000. When the Soviet Union's breakup-related problems settled down, Armenia developed more and more events with the United States. Armenia started with only one or two annually, but by 2009 had 1,000 professional events. Armenia also has contact with the U.S. European Command, U.S. Air Forces Europe, and NATO and European countries.
The United States has made a concerted effort to help Armenia and 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 $2 billion in humanitarian and technical assistance for Armenia.
On March 27, 2006 Armenia signed a Millennium Challenge Corporation (MCC) Compact with the United States; the agreement entered into force on September 29, 2006. As of May 2008, due to concerns about the status of democratic governance, MCC assistance was on hold for the construction contract for the rehabilitation of rural roads, while continuing to provide assistance for irrigation infrastructure. In June 2009, the MCC announced that it would not resume funding for any further road construction and rehabilitation.
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 at 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 Dell, Microsoft, and IBM. Recent major U.S. investment projects include the Hotel Armenia/Marriott; the Hotel Ani Plaza; Tufenkian Holdings (carpet and furnishing production, hotels, and construction); several subsidiaries of U.S.-based information technology firms, including Viasphere Technopark, an IT incubator; Synopsys; a Greek-owned Coca-Cola bottling plant; jewelry and textile production facilities; several copper and molybdenum mining companies; and the Hovnanian International Construction Company.
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 resulted in double-digit GDP growth for 2002-2007. U.S. economic assistance programs, primarily under the administration of the U.S. Agency for International Development (USAID), have three objectives: to promote sustainable private sector economic growth; to strengthen non-executive governmental systems and civil society to build a more robust democracy; and to ensure a smooth transition toward primary healthcare and the rationalization of social support systems of the government. Other agencies, including the Departments of State, Agriculture, Defense, Commerce, Energy, Justice, 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. The May 2009 meeting was held in Yerevan.
Specific USAID programs focus on private sector competitiveness and workforce development in selected industries, including information technology and tourism; development of the financial sector and fiscal authorities to achieve an enabling environment for businesses; and reforms promoting the efficient and safe use of energy and water; democracy and good governance programs, including the promotion of a well-informed and active civil society, support to decentralization of authority, independent justice sector and the parliament to ensure the separation of power; social sector reform, including benefits and public services administration for vulnerable populations; health sector reform, including improvement of primary healthcare (PHC) services with an emphasis on preventive care; strengthening of reproductive, maternal, and child healthcare countrywide to ensure access to quality PHC services in rural areas; public education programs; and training for PHC providers.
The U.S. Department of Agriculture's (USDA) Caucasus Agricultural Development Initiative provides targeted and sustained technical and marketing assistance to small and medium-sized agribusinesses, farmer-marketing associations, and the Government of Armenia. USDA's goal is to sustain the productivity of the agricultural sector by expanding access to markets and credit, increasing efficiency, and modernizing agriculture systems. USDA's priority assistance areas are: Farm Credit, Food Safety and Animal Health, support to the Armenian private sector through the NGO CARD, Agricultural Statistics and Agricultural Education. Also, as a training component of USDA projects in Armenia, the U.S. Department of Agriculture's Cochran Fellowship Program provides training to Armenian agriculturists in the United States.
Over 16 years, the U.S. provided nearly $2 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 paralysis 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 closure 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 near the capital--U.S. assistance programs have progressed from humanitarian priorities to longer-term development goals.
Technical assistance and training programs have been provided in municipal administration, intergovernmental relations, public affairs, foreign policy, diplomacy, rule of law, and development of a constitution. Specific programs are targeted at promoting elections that meet international standards, 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.
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